July 13, 2021
5 Money Personality Types to Better Understand Your Spending Habits
By : Ellie Brown
Your personality is a combination of choices and decisions that defines your lifestyle. You may notice the different approaches of people towards their finances and income. Many people prefer to spend while others live to invest from their limited income.
The reason for this varying strategy to spend money is the different money personalities. Psychologists and financial experts have divided the population into 5 categories based on their spending habits. It helps them understand their decisions while trying to figure the solution for their financial troubles.
What is the Use of Money Personality?
Your money personality can define the approach towards financial management. People can predict your decisions with a purchase based on your personality type. Therefore, it will remain simple enough to create a plan to manage the financial troubles.
You need to analyse the reasons for failure to update the budget with the right strategy. Moreover, it will help you find the strength and weaknesses to better plan your expenses. Many people ignore these special traits only to force some solution from an article for a mass audience.
5 Types of Money Personality
A money personality is easy to determine if you know your spending habits. You don’t have to answer a long list of questions or read a whole book to find the personality type. Here are the 5 common money personalities of the people that shape their financial condition
- Big Spenders
People with a knack for high-end products with a heavy price tag is called big spenders. They don’t live in a materialistic world of frequent visits to the marketplace. They will make a single purchase of high value to add to their list of possessions.
If you are among the people with the latest gadgets, luxurious vehicles, or branded clothing and accessories, call yourself the big spender from now. It is essential to invest the money in assets that bring value to your life, even if it has a heavy price. However, the significant risk on the purchases often lands them in financial trouble.
The savings are not the ideal source for investment in the latest gadgets or expensive artefacts. You need the emergency fund to manage expenses through difficult times. Contact first the direct lenders to get small personal loans to make your next big purchase.
Savers is the personality type that feels uncomfortable while spending money. They find ways to save on regular purchases with negotiations and smart decisions. It is hard to call every saver a cheap person, and you should try the word frugal for some.
You are frugal if you put value over the price tag of an object. It is wise to save money, but it has a cost involved. For them, it makes more sense to spend money on quality or to save a few hours.
Savers don’t need guidance to create an emergency or savings account. However, they should put the money to better use than the savings fund. It is okay to take a risk with an investment if you want to grow, build generational wealth or live a comfortable life.
People with emotional attachment towards materials often end up being shoppers. Their only method to lift the mood is a visit to their favourite stores. You are a shopper if you have a hard time trying to resist the temptation of shopping.
Check the account statement and credit card bills from the previous months. You will find a great number of transactions in the store with unnecessary items in the cart. It will impact your progress towards achieving financial freedom and make smart decisions with the money.
Therefore, it is imperative to find methods to avoid frequent shopping sprees. Do not carry credit cards in your purse while visiting the market for essentials. It will take some time to gain control over your shopping habits.
Debtors and borrowers are two terms with different meanings. You can take a loan to manage the financial troubles as it becomes a necessity. At the same time, the debtors don’t think twice to make financial decisions with thoughtless borrowing habits.
The debtors are known to spend more than their income regularly. Also, they might not track the debts, their overall cost, and their impact on their financial condition. You can always take a debt consolidation loan to reduce the financial stress and start the journey to become debt-free.
Investors use their money to create a stable financial future for themselves. They are willing to take the risk with their savings to build wealth. However, it doesn’t mean reckless investment in the absence of proper consideration.
They measure each investment opportunity with a thorough investigation. If you are an investor, a significant portion of your time and income is spent planning a comfortable future with a return from the investments. However, it is essential to living your life without constant planning to manage stress.
In the end, your money personality type will define the default action while trying to make a financial decision. It is possible to achieve savings goals even if you are a big spender or shopper. It will require discipline and efforts to achieve the goals even if the personality type suggests otherwise.