Personality dictates all aspects of your life, so it should be no surprise that personality significantly affects the way you deal with money.
According to Piotr Łabuz, psychologist and expert in financial coaching: “Money personality is the overall set of resources which determine our financial decisions and actions”.
We all have some elements of various money personality types. Usually, one of them is the dominant one and has the greatest impact on our actions and emotions related to money.
What many don’t know is that their money personality comes from six areas:
Your money personality has its origins in six areas:
1. The brain and neurobiology
2. Temperament and personality
4. Values and motivating factors
Below are money personalities that will help you understand why you behave as you do when it comes to finances.
1. The Hoarder/ Worrier
For hoarders, money is a source of security and therefore they try to hold as much as possible and stash it away. Hoarders are risk averse. No matter how much money they may have, hoarders are typically constantly worried that they could lose it at any time.
2. The Compulsive Saver
These are the ones who save and save and save without even a proper end goal in mind. They prioritize saving over everything.
Just like the hoarder, a compulsive saver derives security from the belief that saving money is the only way to feel more secure in life.
3. The Compulsive Spender
This one always spends all his/her money on things that he doesn’t even necessarily want.
A splurger not only views themselves as generous but they also use their money to have others think more highly of them.
This is the money maker and always believes that making money is the reason he was born. When you aren’t spending, saving or investing, you may feel a sense of emptiness.
Having money at your disposal can give you a sense of power and self-worth, which can make it difficult to give someone else the responsibility of handling your finances.
5. Money Monk
He/she avoids the responsibility related to money and any knowledge about money management. They are not concerned with things like the impact of the Swiss frank exchange rate on the amount of the mortgage they will need to repay.
They are generally known as the monks of money because of their disconnection from money.
6. The Gambler
A gambler shares common traits with compulsive moneymakers and spenders.
This personality finds thrill in risking much because of the promise of reward and the pleasure that such a reward could bring. At times, a gambler could risk gambling away their money to escape boredom.
7. The giver: Care for the community first
You’re a giver and a caretaker to those around you. You’re generous to family, friends, and the surrounding community.
You make plans for what you give, often donating through regular monthly withdrawals or your estate. Though you share with the people in your life, you also avoid substantial long-term debt.