We are all individual with different personalities and habits that influence how we live our lives, including the way that we handle money.
Understanding the traits of your ‘money personality’ could help you manage your finances by recognising your strengths and weaknesses.
There’s been many an article on the subject with different categories and descriptions but here are a few of the most common money personalities with a few tips to help you get started.
The plastic-lover is passionate about the many cards filed away in their wallet! Whilst it’s perfectly reasonable to want to spend hard-earned money, the plastic-lover often lacks restraint with purchases and loses sight of the bigger financial picture.
One might take bigger financial risks with less regard for the potential repercussions and might often get a thrill or an emotional boost from spending.
To help manage this, start to consider the bigger financial picture when spending. Think about whether you really need to buy something or if you are just spending out of habit.
Consider limiting your spending to items that will have repeated use. If you can’t see yourself getting any value from the purchase in the future, hold off on splurging for something you will not get value from.
Try a smart phone app to keep track of spending habits. Also, try to make it harder to spend money by limiting the amount of money on your cards or change a credit card to a debit card.
The Compulsive Saver
Saving money is in the compulsive saver’s blood! It gives them a sense of security but they might sometimes go overboard.
The compulsive saver finds it thrilling to see the bank balance grow even if they have no goal in mind.
If you’re saving for a deposit, perhaps adopting some of this personality will help you save sooner!
The chameleon is somewhere in between the previous two personalities, neither being afraid to spend their money but also not being a risk taker.
A chameleon effectively switches between being a saver or a spender.
Whilst they don’t feel like they have to micromanage every transaction, the chameleon can often spend too much one month and then lock down finances the next.
They go with the flow and consider saving in relation to bouncing back from a period of spending, rather than achieving financial security.
If that sounds like you, consider implementing a constant savings plan, such as taking a percentage of each pay and putting it aside in a separate savings account.
This will help to avoid dramatic saving periods by providing some financial security.
Also, similar to the compulsive saver, question the reasons for purchasing (or not purchasing) something. Try limiting purchases to things with lasting value to prevent getting into a situation where you need to lock down your spending.
The Unfazed Spender
The unfazed spender takes little notice of their finances. They’re not necessarily rushing out and buying everything in sight but they’re also not concentrating on building financial security.
The unfazed spender might not consider money to be that important at all, is generally satisfied so long as the bills are paid and avoids thinking about finances.
Whilst this might be fine in the short term, it could cause problems if unexpected costs appear and there are no savings to help.
It is a good idea for unfazed spenders to start looking into creating a savings plan or seeking advice from a professional.
With minimal effort, some basic savings can be accumulated for any financial emergencies that pop up.
So, what’s your personality? Perhaps you see a little bit of each in yourself.
For more savings tips, view:
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The information provided is for general information only and should not be taken as constituting professional advice from HomeStart Finance. You should consult a financial advisor for advice that is specific to your circumstances.