Time to read : 3 Minutes
There’s a lot of noise in the world of personal finance. Some experts swear by a set of rigid rules, others spruik a specific blueprint for the perfect budget. But cracking the code to your own finances comes down to unpacking the personal part of personal finance.
When we focus too much on the ‘finance’, and not enough on the ‘personal’, we end up with cookie-cutter solutions that don’t work with who we are. Instead, we need to get to know our money personality so we can find solutions and strategies that work best for us.
As a financial behaviour expert, I’m all about getting to the core of why we do what we do with money – and understanding your money personality is so important.
Which of these money personalities sound like you?
Is saving super easy, but you struggle to spend money on things you want and need?
Does spending come much easier than saving?
Do you love to track every dollar and know the ins and outs of their numbers?
Is it challenging for you to keep to a strict budget and you prefer financial freedom?
Interested to know more? Based on my interactions with people, I’ve categorised a few common traits into six money personalities. I’ve also suggested action points so you can dive deeper into your habits.
The hoarder
Often celebrated as your typical ‘saver’, hoarders hold their money very tightly and often struggle to spend on things that aren’t essential. On paper, this looks great. Hoarders often have a healthy savings balance. But in reality, hoarders can experience a lot of anxiety around money, and find it difficult to use it as a resource to live their lives better.
Action point: you will benefit from untangling why you feel the need to hold your money so tightly. Try to build up a wider window of tolerance for spending money safely.
Be aware: it’s quite possible you might identify with different parts of multiple money personalities.
The tinkerer
Tinkerers love to feel in control. They might follow a rigid budget, track every dollar, and love nothing more than spending the afternoon updating their spreadsheet. Tinkerers tend to have a more positive relationship with money than a hoarder.
Action point: make sure your tinkering has a purpose – don’t micro manage your money!
The avoider
The avoider doesn’t like to face up to their finances, and gets psychological relief from avoiding opening their bank account or checking in with their budget or savings account. Avoiders might feel shameful or unsafe around dealing with their money, or feel overwhelmed at the prospect of talking about money, or making money moves.
Action point: explore where your avoidance is coming from, and work on taking baby steps to get more comfortable dealing with financial matters. It’s important to take it slow!
The flip-flopper
The flip-flopper tends to go between a feast and famine mindset when it comes to money. They may spend money as soon as they have it, and then suffer the consequences and struggle to get to the next payday without relying on debt. This may trace back to their early experiences of money, perhaps if they experienced financial instability in their home growing up.
Action point: prioritise spreading your money out across your pay cycle, and create stability in your financial routine to minimise the highs and lows you experience.
The spender
The spender finds it much easier to spend money than save money. This can cause significant distress due to their underlying desire to be more in control of their behavior. Spending can often act as an emotional soothing behaviour – either to compensate for low self esteem, or if holding onto money feels unfamiliar or psychologically unsafe.
Action point: take a look at your bank transactions and pull out patterns between what you’re spending, where you’re spending it, and what led to that behaviour. There are often commonalities that can paint an important picture about what’s going on behind the numbers.
The dopamine hunter
The dopamine hunter associates spending, bargain hunting or shopping with positive emotions. This can sometimes be linked to neurodivergence causing an imbalance of dopamine in the brain. Spending money delivers a hit of dopamine in response to a need, which can create a pattern of behaviour as the need for another hit gets louder and louder.
Action point: identify your spending cycles and the areas where you find yourself spending for the thrill. These cycles can become repetitive, so intercepting them can help disrupt the momentum and give you back your control. Replacing habitual behaviours with other things, and creating distance between you and the spending behaviour can help.
Bottom line
Ultimately, there’s no one specific diagnostic for your money personality. Just like our actual personality, we’re all uniquely different.
But, it pays to get to know yourself in the context of money. When you understand your natural tendencies, you can take steps to optimise your behaviour and set up your finances in a way that works for you.
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Financial disclaimer
The information contained on this web page is of general nature only and has been prepared without taking into consideration your objectives, needs and financial situation. You should check with a financial professional before making any decisions. Any opinions expressed within an article are those of the author and do not specifically reflect the views of Compare Club Australia Pty Ltd.
