Your money personality describes the way you approach and manage your money, but how many of us understand how our behaviours affect our wider financial picture?
We all know that managing money is rarely straightforward, and while we might not like to admit it, our emotions are often more involved in our financial decisions than rational thinking.
While we’re all different, there are some traits that unite us, so here we reveal five of the most common money personalities to help you shed light on why you make decisions the way you do, what your strengths are and areas you might be able to improve on.
What is a money personality?
Your money personality is how you think, feel and behave when it comes to money, and anyone who has ever tried splitting the bill with a group of friends is likely to know first hand how different money personalities can be.
Your money personality develops over your lifetime, and you’ll have taken elements from every experience you’ve had. One of the biggest influences on your money personality is likely to be how money was talked about and used around you in your early years.
We typically start to develop an understanding of money at around the age of three or four, so what was happening around you in these formative years is likely to have shaped how you use money today. Similarly, if you’ve had any particularly positive or negative experiences with money, it’s likely to have had an impact.
While your money personality is unique to you, there are some key personality types that you might see some similarities with, which we’ve grouped together here. No one personality is better than another, and all have their strengths and weaknesses. Although one particular personality might resonate with you more, it’s likely that you may have some traits from two or more other personalities, depending on your individual experiences.
A really useful exercise can be to have a look at the following personalities to see if any of them fit, and use them to explore why you hold these views. Maybe your family didn’t have much money when you were younger, so now you like to save more for a rainy day, or perhaps you enjoy spending the money you didn’t have in your childhood? Understanding the factors which have shaped your money personality may help you to navigate the impulses and thoughts you have around money and build a stronger financial future.
1. The banker
Your money personality might be a banker if saving and frugality are two of the most important things to you or if you feel a sense of relief and security knowing that you have savings tucked away.
While some people might struggle to save without a goal, such as buying a house or saving for a holiday, for bankers, saving is often the goal and the reward in itself. They’re likely to prioritise saving over anything else and aren’t likely to be big spenders. If they do make any significant purchase, it’s likely they’ll have carefully considered it before they commit.
Bankers will often play it safe when it comes to saving and investing and don’t usually have a high tolerance for risk.
Strengths
Bankers might have high levels of financial resilience as they dedicate energy to building up savings in reliable and stable savings accounts, or low risk investments.
Bankers are often thrifty so they are likely to know how to find the best deals for everything, from getting the best price for your home insurance to the best time for supermarket reductions.
Points for improvement
Some bankers may find that their urge to save and protect their money means that they avoid moving money around and are reluctant to take any risks, even if that means missing out on potentially higher returns.
Soaring inflation means that the purchasing power of your cash is being steadily eroded if you leave it languishing in a low-interest paying account, so it’s worth making sure you’re earning the best possible returns – and that can mean regularly moving to accounts paying higher interest. Read our article Five ways to boost your savings returns to find out how to make sure your money is working as hard as it possibly can for you
Other bankers might find it very hard to part with their money, meaning that they can spend a lifetime building up savings that are never actually used or enjoyed, or may continue saving past a point that is necessary. If this sounds like you, remember that although saving is an excellent financial practice, it’s not a bad thing to treat yourself once in a while.
An issue some people might face if they’ve been diligent savers and have never had to borrow money is that they might have a low credit score. Of course if you have no intention of borrowing money in the future, this won’t be a problem, but if you think you’re likely to need a credit card or mortgage at some point down the line, it’s worth thinking about. Have a look at our article Seven steps to improve your credit score to find out how you might be able to boost your score.
2. The spender
If a shopping spree, buying the latest gadgets or getting gifts for loved ones ‘just because’ brings you a sense of satisfaction, then your money personality might be the spender.
The spender’s motivation can vary from person to person, but one thing is consistent, spending money brings them joy. This isn’t to say that spenders are frivolous and always end up in debt, but rather that once all their financial admin is done – savings tucked away and bills paid – they enjoy using their money to buy the things they want.
Spenders are usually pretty comfortable with some element of risk when it comes to their money, more so than other money personality types such as the banker or money avoider.
Strengths
Spenders are often willing to take risks when it comes to investing, which could result in bigger returns – but also could result in them losing money. You can find out more about the pros and cons of investing in our guide Is investing right for you?
Points for improvement
While many spenders are able to keep on top of their purchases, for some, spending can be a slippery slope that can get out of control if it’s not carefully monitored. A good option for spenders who think this could happen is to create a robust budget, and set a ‘spending allowance’. This means you can scratch that spending itch while making sure you don’t get too carried away.
Another thing that could be useful for spenders is to identify when you’re making an impulse purchase versus something you actually want. A handy way to try and curb this is if you see something that you like in a shop, don’t buy it there and then, instead take a few days or even weeks to think about it. If you still want it after this time, then go for it, but often you’ll find that you’ve moved on, and have saved yourself some money in the process.
3. The planner
If you enjoy organising your money down to the last penny and like to stay on top of your finances at all times, you might be a planner.
Some planners might have a budget that they broadly work to, but others might have a much more detailed budget that they use and review regularly to make sure they’re on track, with these plans sometimes extending for months, if not years. Planners generally enjoy controlling their finances and get satisfaction from seeing their plans turn into reality.
Planners can have complex financial arrangements but will often actively monitor their investments and savings to check they are performing as they hoped. Depending on where they sit on the planner spectrum, and on the goals they’ve set themselves, they may be more or less comfortable with taking risks when it comes to their money.
Strengths
Planners will often have clear financial goals and will work steadily towards them. They are likely to have a firm idea of where their money is currently going, and will usually aim to repay debts as soon as they can.
Points for improvement
While for the most part, planners will reap the rewards of being financially organised, as we’ve seen recently, you never know what life has in store for you. Like all best-made plans, no one can see into the future, so building in a degree of flexibility to your planning, and not overcommitting yourself are both important things to consider. Have a look at our article How to build an emergency fund for ways to build this flexibility.
4. The worrier
Most of us worry about money from time to time, especially now when so many of us are feeling financially stretched, but if you have a worrier money personality, it’s likely that you’ll feel concerned about your finances pretty much all the time.
Worriers might feel that they’ll never have enough money or be constantly fearful that their money might run out. Often this feeling isn’t eased by earning more money, and in some cases might make worriers think about a bigger fall if they hit hard times.
Some really difficult emotions are often at play for worriers, with feelings like anxiety, or shame often overriding other more positive emotions. It’s important to understand that being a worrier isn’t necessarily a negative thing, however, and that awareness of what could happen if things go wrong can be a powerful tool when shoring up your finances.
Strengths
Worriers usually have an excellent sense of what their current money situation is and in a lot of cases give a lot of thought to what they might be able to do to improve things.
Points for improvement
As humans, we’re designed to prioritise negative emotions over positive ones. It’s something that was useful when we lived in caves and anticipating dangerous situations was a survival skill. But in modern life, this can prove counterproductive. So while having a realistic view of your finances is great, it’s important to try to find the balance between positive and negative.
One thing that can help worriers is finding concrete information that boosts their positive thinking, for example, looking at bank statements to see how much they’ve managed to save, or how much they’ve reduced their mortgage by over the past year.
Some banks and savings apps provide you with handy tables that show how you’ve developed your finances over time. This can also help you highlight some areas that you can improve. Having specific things to work on can make money worries seem much more manageable, and help you feel in control. Find out more about money-saving apps and how they can help you monitor your finances in our guide 17 top money-saving apps.
If however, you’re struggling with overwhelming anxiety around your money, don’t suffer in silence, and there are charities and organisations out there that can help you. Our article, Are money worries affecting your mental health? provides sources of help. Remember that there’s absolutely no shame in reaching out for help and taking the brave step to talk about it can be the start of a whole new outlook on life.
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5. The avoider
If you’re an avoider, talking or thinking about money is something you simply don’t like doing, particularly in front of other people. It’s safe to say that you’re not alone in this, as many of us prefer to bury our heads in the sand, rather than confront or share any money issues we might be having.
It might be easy to assume that avoiders manage their finances badly, but they often have a robust financial set up that means they don’t have to think about money matters very often.
However, avoiders who don’t stay on top of things, for example, by not reading bank statements or checking how much they owe on their credit card, could be storing up trouble for the future.
Strengths
Money avoiders will often prefer to hand control of their money over to a financial advisor, so that they don’t need to interfere with anything, but rather can let their advisor do the hard work on their behalf. This can often prove a very sensible strategy, which you can read more about in our article The value of financial advice.
Points for improvement
For some avoiders, although by no means all, anxiety can rule a lot of your financial decision-making, and often making no decision may feel like the best option. This could mean that avoiders miss out on some great opportunities to improve their financial picture.
If you feel you are an avoider, breaking decisions down into manageable chunks and tackling things one step at a time can make things feel a lot less daunting. If there are any financial areas you’re feeling a bit lost on, our money guides may help.
Another option for money avoiders to consider exploring, if they don’t already, is automating their banking. If you want to tidy up your finances and start saving, setting up standing orders to savings accounts can be a great way to do this. If you use mobile banking, a huge number of banks and building societies allow you to easily open accounts through their apps and set up standing orders in a matter of minutes, and once it’s done you don’t have to think about it again.
Finally….
Whichever money personality you are, identifying the things you do well – and not so well – can be a really important first step to improving the way you manage your finances.
If it all feels beyond you, don’t be afraid to seek help, as there are all sorts of organisations that can provide free help and guidance. For example, if you don’t know where to begin sorting out your financial issues, contact Citizens Advice to help you find a way forward. You can speak to an adviser through its national phone service Adviceline on 0800 144 8848 if you’re in England, 0800 702 2020 if you’re in Wales, 0800 028 1456 if you’re in Scotland and 0808 223 1133 if you’re in Northern Ireland.
If you’re considering getting financial advice and want some recommendations tailored to your individual circumstance, our article Should I get a financial advisor? can give you some pointers on where to go for help.