There are seven distinct money personality types. Identifying which types you fall under, and understanding the pitfalls of each, can significantly improve your relationship with money. It can help you do things like spend less on impulse purchases, be better about budgeting, invest wisely and ensure a nice nest egg for retirement
The Compulsive Saver
You put away money endlessly, sometimes with no end goal in mind
- Believe saving money is the only way to feel more secure in life
- Frugal
- Some Compulsive Savers are so afraid of losing money that they go their entire lives without spending any of what they worked so hard to save
- Money advice: It’s all about moderation; learn to find a balance between saving money and enjoying life
The Compulsive Spender
You tend to spend money on things you don’t necessarily need.
- In extreme cases, they can be at risk of going bankrupt if they consistently spend more than they earn. Money advice: Creating a budget plan will help you see things from a different perspective.
Gambler
Gamblers are likely to be introspective and strict with financial risks they take
- Balance and security are essential to have, so start setting aside monthly savings before making any big financial decisions
- Avoid sudden windfalls or devastating losses
- Try to avoid borrowing against retirement money or children’s college fund to make up for losses
The Compulsive Moneymaker
Believe that earning more money is the secret to happiness
- Spend most of your energy on trying to make as much money as possible
- Get pleasure from the approval and recognition from other people for your financial success
- Pitfalls
- Neglecting important relationships to prioritize growing their wealth
- Money advice
- Recognize that there’s more to life than money
The Worrier
You are constantly worried that you will lose your money
- Lack confidence in your ability to achieve financial freedom
- Obsess over the worst-case scenario of what will happen if you run out of money.
- Seek positivity around money conversations
- Talk to a financial advisor or a therapist
Indifferent-to-Money
You believe that money should not influence important decisions in life
- Many people who are indifferent to money feel they only need a modest amount of money to be happy
- Money advice: Know where your money is going, what your monthly expenses are, and where you stand on debt
The Saver-Splurger
You start out saving a lot of money, but then give into spending impulses out of nowhere.
- Common pitfalls: It can be emotionally exhausting when the pendulum swings from compulsive saving to compulsive splurging, and you often end up stressed and disappointed in yourself for working so hard to save money, only to lose it so quickly
- Money advice: Before making a big purchase, imagine how you might feel the next week or two.
