It Takes All Sorts: Knowing Your Money Personality Can Help You Enjoy Better Fortune
Selection boards for big organisations often use a personality assessment, like the Myers-Briggs Type Indicator. The results can also be very useful for the candidate—knowing what type of person you are will help you to decide what sort of activities will reward you. The same goes for how you manage your money: knowing what sort of financial personality you have will help you to understand what is going on when you make financial decisions…and to make the right ones.
Spend or Economize?
Spenders love the things that money can buy, and they don’t necessarily worry about whether they are getting the best value. If the purchase brings pleasure, well that it is what money is for. They can be very good at enjoying life but don’t always make the best decisions.
Economisers are always on the look-out for the best deals. They will hang onto their money until they find the best offer. If they end up not spending it at all, that is a good outcome for them, because then the money is available to spend on something that might turn out to be a better bargain—but they can miss some boats completely.
Gamble or Play Safe?
Gamblers love the thrill of putting their money somewhere risky. They can get depressed if they lose, but they quickly recover and are up for new risks. Sometimes they can win big, and this will encourage them to gamble more. They tend to make over-optimistic assumptions and to fly by the seat of their pants rather than to analyse the facts.
Safety players are averse to risk and want to know that tomorrow their money is going to be worth as much as it is today. They are liable to miss out on the better deals that have an element of risk, preferring a savings account to the stock market, but they are less likely to put those around them at risk of financial problems.
Long-Term or Short-Term?
Long-termers are always looking over the next horizon. They expect to live long enough to draw a pension and have the imagination to picture what the future will be like. On the other hand, they run the risk of becoming bogged down in the huge range of possibilities that unfolds the further you look into the future.
Short-termers think about what they want today. If they want a major purchase like a Chrysler 300 or a Yamaha XSR900, they will borrow the money to get it now. They enjoy life to the full while they can but can easily find that debt catches up with them.
Finding a Balance
Managing money is a matter that affects the whole of our lives, and the lives of others around us. Wherever we fall in any of the above spectrums, there are advantages and disadvantages. Knowing ourselves is the start of wisdom, and by recognising both the advantages and disadvantages of our own natural disposition we can hopefully learn to manage our money wisely.