When it comes to money, I think we have a natural tendency to divide people into two groups. Spenders and Savers.
While there is a lot of truth to this simplistic view of how we relate to money, I think there is a bit more to our “money personality profile” worth considering. The more we understand why we make the financial decisions we do, the better decisions, and maybe just as importantly, the better we will work with our spouse or children instead of against them when it comes to our money.
If you research this topic you will discover various forms of these money personalities. I’ve read through quite a few and probably learned something valuable from each. In the end, I think there are four basic money personalities. What’s important to remember is that I think most people can relate to one of these strongly (let’s consider that your primary money personality) and one these a little less strongly (your secondary money personality).
Spender or Saver?
Spenders – Spenders receive joy and satisfaction from buying things. You’ve heard the phrase “keeping up with the Joneses?” Well, these people are the Joneses! They may feel the need to buy the latest gadget or wear the latest trend. But it’s important to also understand that they may be great bargain shoppers and generous gift givers. Whatever the reason or the cause, they truly enjoy spending money.
Savers – Savers receive joy and satisfaction from seeing the size of their bank accounts growing. They spend money reluctantly and avoid debt like the plague. Savers rarely spend impulsively but instead will err on the side of no purchase instead of a bad purchase.
Risk taker or Security Seeker?
Risk takers – Risk takers receive joy and satisfaction from making decisions that have the potential for a big win. Their attitude in life is to just go for it, or just do it. They are not afraid of failure. For the risk taker, just taking the risk is worth it. This may manifest itself in high risk / high return investments or amassing considerable debt to start that new business.
Security Seekers – Security seekers receive joy and satisfaction from knowing their financial future is safe. They can relate to the motto “better safe than sorry.” For the security seeker consistent investment returns over time (singles or doubles to use a baseball term) are better than trying for the big score (home runs or strike outs).
So, what are you? Spender/Risk Taker? Spender/Security Seeker? Saver / Risk Taker? Saver/Security Seeker? Knowing your money personality profile will be helpful in understanding your natural tendencies when it comes to spending, saving and investing money.
If you want to learn more, please reach out to me.