Since April is Financial Literacy Month, the team at Peoples Bank wants to help you improve your financial know how. A big part of being financially literate is knowing your financial personality. Identifying your personality can help you develop strong financial habits and avoid pitfalls that can land you in financial trouble.
Today we’re going to outline five financial personalities, based on this article from Investopedia, and provide money management tips for each type.
The Five Financial Personalities
As you read through the different financial personalities below, you may find that you identify with more than one description. That’s common. The key is to find the one that best matches yourself and tune into our tips at the end of this article.
People with the Big Spender financial personality love to have the latest and greatest of everything—the flashier, the better. They have little issue spending money, especially if it means they get to be the first of their friends to have something, whether it’s new kicks or a new car. Big Spenders don’t mind taking on debt and when it comes to investing, they are risk takers.
On the opposite end of the spectrum, you’ll find the Saver. Savers make it their mission to save money on everyday costs, like utility bills and groceries. You’ll likely never find a Saver sporting the latest trends in fashion or technology or purchasing a brand new car. To their Big Spender friends, the Savers are “cheap.”
The Shopper’s financial personality is a bit impulsive. Shoppers often make purchases based on emotion over logic. Shoppers get a rush when they purchase a new item and can’t resist a good sale, even if they know they should avoid spending. Most Shoppers are fully aware of their purchasing behavior and they may struggle to avoid shopping.
For Debtors, managing money, saving, and investing is simply not a top priority. They don’t have the urges to spend like Shoppers or the need to impress like the Big Spenders, they just don’t spend much time thinking about money. They don’t keep a budget, and likely don’t know where their money goes each month. As a result, they usually carry a large amount of debt.
The Investor financial personality places a high value on research. Investors may not have a large disposable income, but they focus on putting that money to work for them with smart investments. Before shopping or spending money on large purchases, the Investor will consider how that purchase will impact them in the long term.
Managing Your Financial Personality
If you identify with one or more of the five financial personalities, use these actionable tips to help you develop healthy money management habits.
As a Big Spender, it’s important to focus on your long term goals. Trade status for stability in the longer term by developing a money management plan that prioritizes savings.
If you’re a Saver, know that there’s more to good financial health than trimming the costs of your everyday expenses. When it comes to your savings accounts, there are many options available. Do your research and find ways to put your savings to work for you.
As a Shopper, you are likely aware that impulse buying can negatively impact your financial health. To keep these tendencies in check, establish SMART goals for managing your money.
For Debtors, it’s important to take action now. The old saying “Ignorance is bliss” does not apply to your financial health. Start tracking your finances today and take steps to become financially sound.
If you’re an Investor, never stop learning. Investors are often the most stable of the financial personalities because they take smart and deliberate action when managing their money.
Now that you have identified your financial personality, you can take action to keep your finances on track. Breaking negative money habits and sticking to goals takes an incredible amount of discipline, but a personal budget can help. Download our Monthly Budgeting Sheet to improve your financial literacy today.