Author | Aram Anthony
Understanding how your personality affects your financial behavior is a key part of achieving financial success. Does saving come easier to you than spending? Or does money burn a hole in your pocket the moment you get it? We’ve outlined some patterns and behaviors that may help you identify your financial personality, along with suggestions on some action steps you can take. If you’re looking for insights into how you can better manage your money, recognizing your financial personality is a great place to start.
The compulsive saver
Key traits: Individuals in this group are highly motivated to save. They only spend money when absolutely necessary.
Pros and/or cons: While compulsive savers often accumulate large cash reserves, they can also miss out on opportunities to invest in themselves and their future.
If this sounds like you: Speak with a money manager for sound financial advice. Create a plan that allows you to save while staying open to key opportunities. If your situation warrants it, you may want to engage with professional wealth management services.
The constant spender
Key traits: From Black Friday to end-of-season clearances, the compulsive spender never misses an opportunity to spend money, even borrowing against future earnings. As a result, they often struggle with high credit card balances.
Pros and/or Cons: The compulsive spender often find themself saddled with high long-term debt as well as high monthly payments.
If this sounds like you: Seek the help of a financial planner and create a monthly budget that helps you lower your overall debt.
The driven money maker
Key traits: For these individuals, it’s all about generating income. They’re always on the lookout for ways to make more money.
Pros and/or cons: Their focus on generating income can distract them from managing their finances effectively.
If this sounds like you: Work with a money management professional to make sure you’re making the most of your personal finance situation.
The saver/splurger
Key traits: This group is comprised of individuals who can swing between frugality and overspending.
Pros and/or cons: Without a consistent approach to managing their finances, these individuals often find themselves in an unstable financial situation.
If this sounds like you: A professional experienced in financial planning can help you set up a budget with defined priorities and financial goals to help you achieve sound financial health.
The worrier
Key traits: Managing their money is a constant source of concern for worriers who fret over almost every aspect of their personal finances. They often feel like a deer caught in headlights when it comes to making key monetary decisions.
Pros and/or cons: Worriers often lack sound personal financial education gained from credible sources.
If this sounds like you: Seek out trusted financial professionals for advice and education. The more you know about personal finance, the more confident you’ll become when it comes to making important financial decisions.
The free spirit
Key traits: For some individuals, money and personal finances are not a concern or priority. They rarely pay any attention to their finances and, as a result, can find themselves with an unpredictable financial situation.
Pros and/or cons: With frequent fluctuations in their financial situation, free spirits may find themselves making financial decisions that can negatively impact their financial health over the long-term in order to take care of pressing short-term needs.
If this sounds like you: Consulting with a finance professional can help you identify and acknowledge the role that money plays in your life. They can also help you define an approach to personal finance that helps you achieve your goals without requiring your constant attention and involvement.
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