By Carol Ngura
We all have our distinct way of thinking when it comes to how we interact and deal with money. Our spending and saving is not simply based on logic and rationale as we may want to assume,
it often has a habits, attitudes, emotions and values component. Unfortunately, not understanding our different money personalities often creates tension and unnecessary disagreements among our spheres. A day rarely passes without the need to make a decision about money…. A new watch or money for school fees, lunch out or packed lunch.
Consciously or unconsciously, our money personalities affect each of these decisions. Therefore, understanding our money personality is very important in our day to day living.
It helps us in the following ways:
1) Financial planning and investing
2) Personal money management
3) Budgeting and asset building 4) Interpersonal development
5) Relationships and communications skills
6) Career advancement and workplace dynamics
8) Gives a sense of emotional intelligence
Several money personalities speaking to the psychology of money exist to help one examine and evaluate their habits, understand what their likes or dislikes are, what their characters and challenges are and know
how best to manage their finances. These money personalities are:
1.Risk Takers- They are thrilled by risks. Whether the risk does not yield or costs them everything, they
keep following the rush for a new risk.
Some of the characteristics of risk takers include:
• Conceptual thinker; they are not worried about details, they do not get stuck on the ‘how’ of an idea.
When they get an idea of something whether a business opportunity or an investment option, they go for it fast.
• Listen to their gut feeling; if an idea feels right, they will trust their intuition and go for it. They do not just rely on their intellectual capability or conventional wisdom but more on their gut feeling.
• Decisive; when it comes to money, they do not waste time researching or doing a background check, they decide and decide fast.
• Love finding new adventures; for them, no risk is too big or idea too far out. Their sense of adventure overrides and they want it.
• Easily excited by possibility; For risk takers, the idea of something excites them more than the thing itself. Challenges of risk takers;
• Impatient; their decisiveness leads them to lose patience with people who do not quickly buy in to their big ideas. They make decisions without consulting even those the decision may affect since they have no time to wait for their input.
• Insensitive; When they get an idea, they go ahead irrespective of other people’s feelings or opinions. This may result in relational fallouts with their family, friends or workmates.
• Easily resented; The quick decisions and leveraging of assets can cause a rift and result in resentment from the people involved especially if the idea does not pay off as expected.
• Blinded by possibility; their idea to do something prevails beyond reason, attention to detail or long-term planning. Nothing matters except implementing it.
• Vulnerable; Most end up as victims of cons. The thrill of taking the risk and desire for making money makes them easy targets.
Security Seeker; Security seekers like to know that their money matters are settled and safe. They are more inclined to lowrisk investments, quality purchases, hefty insurance and secure retirement funds.
Characteristics of risk takers;
• They do their background check thoroughly; They will always want to see the property before investing, get a detailed prospectus from the developer and a resume from every other investor involved. They will go the extra mile to check the legality of the property.
• Willing to sacrifice; they will only spend after they have put away some money for retirement, insurance and every necessary investment. They would rather suffer today but secure their future.
• Trustworthy; when it comes to dealing with money, you can trust them. They are careful planners and have a steady approach to money. They will not divert moneys meant for life insurance to any other unnecessary want. They are very strict with how they spend.
• Planners; they are always ready for whatever financial eventuality. They rarely find themselves in a financial crisis because they always have a plan B. Like any other personality, the security seekers also face challenges. Which include;
• Overly negative; They avoid risks and get edgy about any decision involving financial risks. They seek to be sure about every investment they make which is impossible in reality.
• Analysis paralysis; They can spend all their time making sure an opportunity is foolproof while doing little to implement it. They therefore end up losing so many viable opportunities.
• Stifle creativity; over time, the need for security can consume them to an extent that they stop looking at future possibilities and get stuck on the certainties. This can be a hindrance to financial growth. security can consume them to an extent that they stop looking at future possibilities and get stuck on the certainties. This can be a hindrance to financial growth.
Spenders– This personality is characterized by the pure love to spend on self or on others mostly for immediate pleasure. Spenders whether rich or poor, get some satisfaction from spending. This makes it hard for them to save or prioritize the necessary things in their life. It is very hard for them to invest in future oriented purchases or to set and achieve long-term financial goals.
– This personality is characterized by the pure love to spend on self or on others mostly for immediate
pleasure. Spenders whether rich or poor, get some satisfaction from spending. This makes it hard for them to save or prioritize the necessary things in their life. It is very hard for them to invest in future oriented purchases or to set and achieve long-term financial goals.
Characteristics of spenders:
• They live in the moment; For them, what matters most is making now count. They will spend whatever money they have just to make great memories today even when it is at the expense of their future. They
look for immediate satisfaction.
• They are thrilled by making purchases. For them price is not so much a consideration as long as they like the product. They shop at expensive stores, cheap stores……they simply just buy and keep buying.
• They love gifting and spending on others unnecessarily. They will treat their friends and family for Christmas, valentines, Easter, Labor Day, friends’ day and any other day they feel like. They will give money to any acquaintance or friend who requests for some. As you would expect, spenders face
challenges they would face diligently they if they knew better. These include;
• Budget breakers; Even when they put together a budget with great intentions, they rarely stick to it. This often leads to heavy unmanageable debts.
• Impractical/ impulse buyers; They do not differentiate between wants and needs. If they want something, they get it even when it is not a priority. They go shopping without shopping lists, they
never research on the items’ prices to get the most affordable deal and they do not take advantage of available sales offers.
• Filled with regret; in as much as they enjoy making purchases recklessly, they often regret getting carried away after the bills start rolling in. They feel bad about their careless spending but they have a
hard time stopping themselves.
Flyers/ Avoiders – Unlike the other personalities, flyers do not consider money very important. It triggers no emotions in them and they genuinely do not give money issues priority.
Characteristics of flyers/ avoiders;
• Content with life; at whatever level they are in life, they are content. They do not desire to have more money, they are satisfied with what they have.
• Happy to allow someone else take care of their money issues; whether a personal financial professional or a spouse, flyers are always willing to allow someone else to take the lead.
• Not motivated by money; for flyers, the amount of money they will make is not a source of motivation. Their only concern is if they are enjoying what they are doing. In career, their focus is whether they are
interested in the duties/ roles and not the monetary benefit. They would not mind a salary cut just to do what they enjoy. As unusual as they are, flyers still face challenges. They can be;
• Lack financial problem-solving skills; when faced with financial crisis, flyers are prone to make major mistakes since they have no interest in money and do not even understand how it works.
• Disorganized; in dealing with money, they are disorganized. They forget to make a shopping list, their bank account security code or even to pay their bills.
• Reactionary; given that money is a necessary part of life, they are faced with bills to pay and other money decisions that need to be made. This often leads them to debts since they lack financial
plans or budget.
Hoarders/Savers– They love to save and hate spending.
Characteristics of savers;
• They feel proud of themselves when they get something they wanted for less.
• Organized and responsible in money matters; They set their priorities and follow them accordingly. They operate strictly within their budgets and will always carry a shopping list when shopping.
• Not impulse buyers; before they decide to spend on anything, they scout for deals and offers, prepare a detailed plan and ensure they have money before making the purchase.
• Hate paying interest and accruing debt; they will not incur credit card debts at whatever cost. They are keen to settle all their bills in full as soon as they are due.
Challenges faced by hoarders/savers include;
• They are considered cheap and selfish; because they always have a hard time parting with money, they come across as selfish to people. They always go for cheap things in a bid to avoid spending too much.
• Obsessive about money; hoarders/ savers love to talk, think, and worry about money. Their financial conversations are always about saving money.
• Overly focused on financial goals; for them, leisure, entertainment or vacations are unnecessary expenses. Their only focus is saving, saving and more saving.
Amasser– they get satisfaction from having large amounts of money at their disposal to either spend, save or invest.
• They equate money with self-worth and power
• Enjoy managing their own finances and avoid services of financial professionals
Challenges they face are;
• Always find it difficult to give up control to money professionals
• Feel empty and depressed when they are not spending, saving or investing
• Lack of money leads to feelings of failure and frustration
• They worry about their investments’ returns and how much money they have
Money monk– This kind of people subscribe to the belief that money is dirty and is the root of all evil.
They are characterized by;
• Strongly believe that if they have too much money, it will corrupt them.
• Worry about being selfish and greedy; If by any chance through inheritance or any other means they get wealthy, they feel uneasy and anxiously worried not to end up selfish and greedy.
• Fear of investing; unlike the other personalities, they are afraid of investing since the money may grow and make them wealthier.
• Are more inclined to socially responsible investments that reflect on their values and convictions.
• They associate with modest people and avoid those that are wealthy or rich
• Worry about losing sight of their spiritual, positive human or political ideals and values
• Poor financial investors and financial planner
• Poor financial problem-solving skills. When faced by a financial crisis, they do not know how to deal with it.
Having learnt and understood our personality characteristics and how they affect our financial decisions, it is important to note that there is no right or wrong personality. We all have a primary and a secondary personality which impact on each of us differently and make us who we are when it comes to our dealings with money. The more we learn and understand our interaction with money, the sooner we are able to see eye-to-eye with our day to-day spending and learn how to control ourselves financially.
As Natasha Munson said, “Money, like emotions, is something you must control to keep your life on the right track”.