Like almost everything else in life, your response to money is dictated by your personality. But have you thought about how your behavior affects your bottom line? Understanding your money personality will help you shape your spending, saving, and investing.
Key Takeaways
- Understanding the various money personalities helps with investing, spending, saving, and finances.
- Five common money personalitiesare investors, savers, big spenders, debtors, and shoppers.
- Debtors and shoppers may tend to spend more money than is advisable.
- Investors and savers may overlap in personality traits when it comes to managing household money.
1. Big Spenders
Big spenders love nice cars, new gadgets, and brand-name clothing. People with a "spending" personality type aren't typically bargain shoppers. This often means a desire to have the latest and greatesttechnology and a beautiful home. When it comes to keeping up with the Joneses, big spenders are the Joneses. They are comfortable spending money, don't fear debt, and often take risks when investing.
2. Savers
Savers are the opposite of big spenders. They turn off the lights when leaving the room, close the refrigerator door quickly to keep in the cold, shop only when necessary, and rarely make purchases with credit cards. They generally have no debt and may be viewed as frugal. Savers are conservative and don't take risks with their investments.
3. Shoppers
Shoppers often developgreat emotional satisfaction from spending money. Theycan't resist spending, even if it's tobuy items they don't need.They may be aware of their urge and concerned about the debt that it creates. They look for bargains and are happy when they find them. Shoppers are varied in terms of investing. Some save regularly through 401(k) plans and may even invest a portion of any sudden windfalls to make a purchase.
4. Debtors
Debtors aren't trying to make a statement with their expenditures. They commonly don't spend much time thinking about their money or tracking what they spend and where they spend it. Debtors generally spend more than they earn and are deeply in debt.
The Fair Credit Reporting Act (FCRA) requires that credit bureaus ensure that the information they collect about you is accurate and provide a free copy of your report once every twelve months.
5. Investors
Investors are consciously aware of money. They understand their financial situations and try to put their money to work. Regardless of their financial standing, investors tend to seek a day when passive investments will provide sufficient income to cover their bills. Their actions are driven by careful decision-making, and their investments reflect the need to take a certain amount of risk.
Making Changes
Many spenders and savers share parts of all five personality types. After evaluating your habits, here are some tips to help tweak your dominating trait:
- Spenders: Shop a little less and save a little more
- Savers: Use moderation. Sometimes, a saver who is too conservative may be missing out on high-return investments
- Shoppers: Establish a weekly or monthly budget, and don't spend money that you don't have
- Debtors: Evaluate your debt and credit limits and start a saving plan
- Investors: Keep up the good work and stay mindful of long-term goals and opportunities
How Can Spenders Cut Back on Purchases?
Spenders can limit spending to only things they will use and save more. This provides spenders the opportunity to think long-term and look for slow and steady gains as opposed to high-risk, quick-win scenarios.
What Is a Risk for the Debtor Personality?
Credit scores and credit reports are a concern for this type of spender. Relying on credit or debt can affect long-term goals, such as obtaining a car loan or qualifying for a mortgage.
How Can I Start a Budget?
Start by calculating your take-home pay. Know how much money is coming in each week or month. Begin tracking and categorizing your expenses and what is left for saving and investing.
The Bottom Line
While you may not be able to change your money personality, you can acknowledge it and address the financial challenges that it presents. Managing your money involves self-awareness; knowing where you stand will allow you to modify your behavior to achieve financial goals.
FAQs
Five common money personalities are investors, savers, big spenders, debtors, and shoppers. Debtors and shoppers may tend to spend more money than is advisable. Investors and savers may overlap in personality traits when it comes to managing household money.
What personality type has the best money? ›
Commanders (ENTJ)
They make money the foundation of many life decisions, including educational and career choices. They are the personality type most likely to equate money with influence. They reach beyond needs and extend their interest in money to attaining their wants and desires.
What money personality is CeCe most likely to have? ›
Overall, CeCe's behavior aligns with the characteristics of a "balancer" money personality, as they effectively manage their finances by prioritizing saving, investing, and spending in a responsible manner.
What is sanguine money personality? ›
The Sanguine: The Spontaneous Saver
Meet the Sanguine, the outgoing and optimistic financial personality. These individuals have an unparalleled ability to enjoy life to the fullest while still managing to save for their future.
How do you know if you are wealthy? ›
But there is one working definition: "Look at net worth, rather than income," said DJ Hunt, a Florida-based financial adviser. Net worth is calculated by summing up the value of an individual's or family's assets minus their debts or financial liabilities.
What personality type is the richest? ›
The two studies consistently found that rich people are more conscientious, open to experience, and extraverted than the average population. They are also less agreeable (that is, less likely to shy away from conflict) and less neurotic (as in, more psychologically stable).
What personality type has the most millionaires? ›
Traits With the Highest Earning Potential
Based on the above four dimensions, extroverts, sensors, thinkers, and judgers tend to be the most financially successful. Diving into specific personality characteristics, certain traits are more closely correlated with higher income.
What is the rarest personality type? ›
INFJ, also known as the advocate, counselor, or idealist, is the rarest type of personality in the general population. It represents about 1.5% of the general population in the United States. INFJ stands for: introversion.
What is Elon Musk's personality type? ›
As an INTJ, Elon tends to be confident, analytical, and ambitious. Elon is likely an independent thinker focused on solving the world's problems.
Which personality type has the highest IQ? ›
No - INTP has the highest average IQ and yes, INFJs also tend to be incredibly intelligent. The research which has been made over this topic tend to imply INTP has the highest average IQ overall, with both INTJ and INFJ following.
INTJs, often considered as the most successful personality type, go by the names Mastermind or Architect; fitting descriptions for this personality type. They're analytical, observant and open-minded. INTJs balance carefully between the big picture and the little details needed to achieve global goals.
What is a risk taker money personality? ›
Risk Takers are take big chances when It comes to money. They are Intrigued by the possibility to make more money, even though it Is risker. Risk Takers aren't worried about the details. They don't care how an Idea will work out.
Why is it important to know your money personality? ›
Understanding your money personality is the first step toward financial health, helping you uncover your approach to spending, saving, and investing, and where you need to take action.
What do you call a person who saves money? ›
Thrifty, spartan, and prudent are synonyms for frugal, a word that often has positive connotations when used to describe a person who lives a simple life.
What is my money mindset? ›
Your money mindset is your unique set of beliefs and your attitude about money. It drives the decisions you make about saving, spending and handling money. People who have a healthy money mindset believe things like: I have the freedom to spend, but I can also tell myself no to a purchase.
How do I know my worth in money? ›
How to set up a personal net worth statement.
- List your assets (what you own), estimate the value of each, and add up the total. Include items such as: ...
- List your liabilities (what you owe) and add up the outstanding balances. ...
- Subtract your liabilities from your assets to determine your personal net worth.
“They prioritize stability and security, often opting for low-risk investments and maintaining a sizable emergency fund,” said Kovar. “They are cautious spenders, preferring to save rather than spend impulsively, reflecting their desire for financial safety and peace of mind.”
