How Your Money Personality Affects Your Financial Health



What is your personality type? Are you the life of the party, or do you tend to be more of a homebody? Are you a free spirit, or would you describe yourself as more of the cautious type? Although you may have a pretty good understanding of your personality, do you know how that translates to managing your finances? Well, it turns out that the way we approach money can also be directly correlated to our temperament and emotions. Now, like most things in life, your money personality is not necessarily black and white. You probably will have certain habits that fall into more than one category. But if you directionally understand how these traits affect your money-saving and spending habits, you can also identify areas for improvement. And that can make all the difference in getting on the right path to financial wellness.

So, what are the main types of money personalities? There are various expert opinions, but they can be broken down into five to seven main categories. The key is to identify the type that most closely matches your behavior. Our Money Matters, a free financial wellness platform, describes some key traits below. Do you recognize yourself in any of the descriptions?

The Big Spender or Enthusiast

Big spenders appreciate the finer things in life and can be somewhat free-spirited. They like to spend their money on luxury items and have no second thoughts about lavish vacations. Their attitude is "you earned it, and you only live once." They tend to be generous with others, spending freely on friends and family or supporting causes they believe in. And they are not afraid of taking investment risks. The downside is that enthusiasts may buy things based on impulse for immediate gratification, which they may regret later.

The Compulsive Saver

If you’re the type that checks your savings account every day, knows the amount you spend down to the penny, and will drive ten miles out of your way to save a few cents on gas, you may fall into this category. For you, money represents security, and you hold onto most of it so that you are covered for that rainy day. You probably don't splurge on the latest trendy restaurant. And you aren't going to book that boutique hotel when you could stay somewhere else and use points. While you are most likely financially stable, your conservative approach can make you risk-averse to investment opportunities that could be economically beneficial. You also may be denying yourself things that would ultimately give you pleasure.

The Debtor and/or Obsessive Shopper

Debtors and overzealous shoppers buy things without contemplating the results of spending more money than they earn. They often don't stop to think about whether they can afford to buy something because the thrill of the purchase is greater than the thought of the consequences. They just can't resist the temptation, even if it's to buy items they don't need. So, they put off budgeting or saving because they assume they will figure it out later. Unfortunately, this personality type can get in a lot of financial trouble before they even realize it, resulting in expenditures that cost many times the actual purchase price because of the interest accrued. This can lead to living hand to mouth, creating significant stress with very little to show for their money.

The Investor or Money Maker

This personality type derives a great deal of pleasure from pursuing wealth and believes money is the secret to happiness. Money Makers bask in the approval and recognition of others and love being asked for investment advice. Investors understand how money works and are thoughtful and prudent about their investment strategies. And while they often prosper, they are never truly satisfied no matter how much wealth they accumulate. Since the hunt for the dollar is all-consuming, they often neglect relationships and can often forget that there is more to life than making money.


So, now that you have identified yourself in at least one or two of the categories, you can begin to address the challenges they may present.

Big Spenders: Indulge a Little Less, Save a Little More

Before you splurge on something expensive or trendy, ask yourself if that purchase will make a difference in your life. If you can live without it, then skip it. Try to limit your spending to things you'll actually use.

Compulsive Savers: Use Moderation

Don't let all the enjoyable parts of life pass you just to save a few pennies. And while minimizing risk is an investor's prime goal, you can't be completely risk-averse, or you will never achieve real investing success.

Debtors and Obsessive Shoppers: Don't Spend Money That You Don't Have

Put yourself on a budget and take control of the credit cards. Try to consolidate your debt and limit yourself to one card. Unchecked credit card interest can put you in debt for a long time and ruin your credit. If you need to buy something, save for it rather than buy on impulse. Getting the proper financial guidance can also help you get on the right track.

Investors and Money-Makers: Determine when enough is enough

Continue investing and making smart financial choices. However, don't let the pursuit of money be so consuming that you end up very rich but very alone.

The bottom line is that earning and keeping your money requires knowledge, awareness, and sometimes tough choices. But the path to financial wellness is worth it. Our Money Matters has tools that can help you get on the right track, like the budget calculator and student loan snapshot. You can even get an in-depth analysis of your specific money personality. So, what are you waiting for? Get started today!


To read more Our Money Matters blogs, click here.

Our Money Matters is supported by a generous grant from the Wells Fargo Foundation.



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