Can Knowing Your Money Personality Be Helpful?

It’s probably helpful for you to understand that I am a big fan of the fields of Behavioral Finance and Financial Psychology. Both attempt to understand and identify why people make certain financial choices.

Did you grow up in a household where money was openly discussed? Did your parents fight about it? What are your earliest memories of money?

Whether we would like to admit or not, our experiences as children shape the way we feel, think, and make decisions about money. That’s our money personality.

4 Money Personality Types

Dr. Brad Klontz from Kansas State University puts people into 4 different categories. I’ve provided a quick overview of the four categories. It’s important to note there are positives and negatives to each. Although the category title may sound negative, not all traits are bad! Please see Dr. Klontz’s study for a detailed overview.

Money Avoidance

Money is bad, you don’t deserve it and wealthy people are greedy and corrupt. Money Avoiders may self-sabotage by avoiding budgeting and ignoring financial statements.

Money Worship

Money is the solution to all problems, but there is never enough. Money Worshipers believe buying things will equate to their happiness.

Money Status

Self-worth is equal to net worth. Money Status seekers may prioritize outward displays of wealth. They also tend to be workaholics.

Money Vigilance

You are concerned about your financial health and can sometimes be anxious about money-related issues and frugal. The Money Vigilant believe it’s important to work for and save your money.

Take the test to find your personality type.

Most likely, you are a combination of all four categories, with a stronger tendency towards one or two of the categories.

I took the test, and I got my results and some helpful action items.

In case you are wondering, I showed tendencies in all four categories with my results heavily weighted towards Money Vigilant and Money Status. Money Vigilant definitely makes sense, I am a Financial Planner after all! My tendencies toward Money Status make me more likely to be a workaholic-CHECK! That’s definitely accurate (small business owner and part-time adjunct professor).

Self-Introspection is key.

The way we think and feel about money isn’t always rational and it doesn’t always make sense from a math perspective. Owning your experiences and becoming aware of how they impact your decision making capability is key to achieving your financial goals.

The more I thought about my results, the more it made sense. There are definitely reasons why I stress about making big purchases or feel the need to pay off my credit card every week. I need to slow down and remember that I can’t take it all with me! I also need someone I can confide in and discuss my money apprehensions with.

For me, it was key to look at the pros and cons of each category and spend some time thinking about how my own tendencies might impact my ability to accomplish my goals.

I tend to be concerned about my finances, this comes with both positives and negatives. I’m good at saving, but am I too good? I sometimes let my anxiety get in the way of enjoying the benefits of saving. In my case, it means balancing out the saving with splurging on travel. Travel lets me take a break, spend time with family and recharge.

What to do after learning your Money Personality

So what can YOU do with this new-found knowledge?

My advice, spend the time to understand your Money Personality and be aware of how it is impacting your financial decisions. It will provide incredible insight into your own decision making.

Once you’ve done this develop an action plan that takes advantage of your strengths and combats your weaknesses. Hold yourself accountable when working toward achieving your financial goals.

If you’re not quite sure how to develop an action plan, enlist the help of technology or guidance of others. Whether that’s using budgeting software, talking with a significant other, or hiring a financial planner. Find what works best for you.

Interested in learning more? Read more about my firm, and check out my service options.

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