Becoming aware of how our personality influences our approach to money can help us change for the better.
Perhaps your father pins his financial dreams on a lottery ticket. Or your mother only buys home-brand products.
As we grow up our personalities are shaped by our role models and their ways of thinking. And the same is true of our money personalities. Becoming aware of how our personality influences our approach to money can help us change for the better.
See if you recognise yourself in one of these five money personalities. Or maybe these could apply to family or friends who could benefit from understanding their money personality a little more.
Lennie loves nothing better than to shout everyone a round or two at the pub. Come payday he splurges on gifts for family and friends. He’s most likely to be spotted driving a nice car and having a flutter at the TAB. Generosity is admirable. But Lennie is spending beyond what he can actually afford. Learning to distinguish between needs and wants could make a big difference to him.
To begin taking responsibility for his money he could set himself a splurge budget.
There was a lot of financial drama in Chris’s family and now he’s in the same boat. He’s avoiding calls from debt collectors, juggling multiple credit cards, and thinking about bankruptcy. Ashamed of his situation he’s withdrawn from friends and family.
Reaching out would help Chris plot a course for managing the unpaid bills and credit card debts and set a goal of building an emergency fund.
It’s past midnight and Fiona is scrolling through online marketplaces. She hadn’t planned to buy new makeup or a rug, but she didn’t want to miss out on a bargain. “I work hard. I deserve it,” she says to herself as she pounces on her latest purchase. But in the cold light of day she wonders why money slips through her fingers.
To truly treat herself Fiona could focus on what she would love in the medium- to long-term. Her own home? An extended holiday? Or retiring at 40?
By clarifying her deeper aspirations she will find it easier to resist the short-term spending hit.
Freebies are guaranteed to make Polly’s eyes light up. Cheapest is best. But her price consciousness could cost her in the long run. She’s racking up big mobile bills because she opted for the $35 plan instead of the $50 one. She’s had a series of $50 vacuum-cleaners that conked out within a year. Plus, her cut-price home insurance policy didn’t cover accommodation after a fire.
To improve her financial outlook Polly needs to think about value when she spends. Will the item break easily? Is it covering all her needs?
Belinda has a spending plan and sticks with it. Each payday she allocates some money to expenses and some to savings. She also sets aside an amount to treat herself. But leaving her savings in a low-interest account is letting her down. She’s thought about investing but she doesn’t know enough and is scared to take a risk.
Getting some financial education would help to get her savings working harder.