We all have a certain way of behaving around money and understanding our money personalities - our behaviours, habits and feelings around our finances - can be very useful. “Money is a great magnifier” says Olivia Stefanino, coach, speaker and author of The Money Types Guidebook. “It’s a great tool for reflecting back to us what our fears, hopes and aspirations are.”
For Stefanino this is particularly true right now. ”Events such as the coronavirus pandemic can actually be useful to help us understand, reset, and get the most out of our money personalities. Instead of skating along as normal, we’re forced to start delving into what’s going on internally, what patterns of behaviour are serving us and which ones are holding us back.”
In order to understand your money personality says Catherine Morgan, a financial planner and behavioural money coach, start by being curious. “Ask yourself some questions. Do you feel guilty when you spend? Does money make you nervous? Do you compare yourself to others? How does money make you feel?”
Next, she says, scrutinise your answers. A lot of our money behaviours are learned from our parents, either from what they told us, or by watching their habits, and as a result some behaviours are subsconscious. Both Morgan and Stefanino note that over time we can reinforce this messaging to ourselves, until it becomes a self-fulfilling prophecy.
Your money personality has no correlation to how much you earn. Someone with very little can be perfectly adjusted and positive, another person with huge wealth could be trapped in unhelpful habits. And although deciphering your personality won’t change your habits overnight - whatever your bank balance - it could help kickstart some useful thinking.
We try to understand our money personality in order to help us have a happier relationship with money, not to generate shame about current and past behaviours. Indeed, just as with our actual personalities, there will be sides that are positive and valuable. Which money personality are you?
Super savers and patient planners
Saving makes you feel calm and in control. Each month you put a percentage of your income away. Perhaps you save in an ISA or for various saving goals - a deposit, a holiday, a creative writing course. You have a pension and a cushion of money should a rainy day arrive.
Saving and planning go hand-in-hand. Saving helps you map out the future, from a daily budget to a grander five year plan. You know when you can afford to splurge and when you can’t, and denying yourself something in the short term feels fine because that money is working towards a bigger goal.
Very occasionally, I’ve met a super saver who wonders if all their saving means they miss out. If this sounds like you, Morgan suggests finding examples in the world - friends, relatives or even high profile individuals - who are cash responsible but still enjoy the fruits of their labour. These real world examples can hopefully remove some of that anxiety.
I spend, therefore I am
You like to spend your hard earned cash, enjoy rewarding yourself and get a satisfying buzz from a new purchase. When retail spaces were all closed in April, overall sales decreased about 19% (year on year) but online retail sales grew about 24%.
Even though life isn’t quite the same as before, some habits hold fast, and a good week of Zoom meetings is still enough of an excuse to treat yourself. An admirable subcategory of this personality is the bargain chaser: for these people, shopping is even sweeter when they know they’re getting bang for their buck.
When considering the spend personality it might be sensible, Morgan suggests, to ask if the love of shopping is about a straightforward good time, or if there is any deeper emotional reliance.
My money works for me
You like to be savvy about your money. You look for good deals, happy to move your money around if you think there’s something better out there. You invest smartly and always do your research. You like to see your money work hard, even if that involves a well thought out risk.
The uncertainty of the current economic landscape suggests now is time for caution. But eventually, when things return to some semblance of normality, we will need our money to work as hard as possible for us.
The selfless spender
Stefanino calls these people “Angels”. “They love to help others and constantly give,” he says. The selfless spender enjoys spending money on others, more than on themselves, always offering to pay for a round or treating their family or friends, or giving to charity. They take a profound pleasure in giving to others and now, more than ever, in seeing their money do good in the world by helping others.
Head in the sand
For these people, if money is out of sight, it’s out of mind. And that works pretty well - until a nasty shock means they’re forced to confront their bank account, be it a large tax bill, a rent hike, an unexpected change to employment or perhaps a tough business challenge. Hand up: this was me for a long time. I know first hand facing your finances head on can be painful, which is precisely why we put it off.
The shift came for me when I changed how I perceived money, replacing it from headache to a feminist issue of independence. This positive reframing is crucial, says Morgan. “Psychologically, we feel pain more than we feel pleasure, so negative goals are harder to keep.” When you pull your head out of the sand, don’t beat yourself up; cushion the blow with positive goals and positive messages about yourself. It will make the path forward much easier
My friend Molly takes the time to gather and digest all the knowledge she can about products, ensuring she’s made the best decision for herself. She invests the savings she has. She enjoys spending the money she’s earned. But Molly also has bad days too, where she blows the budget and feels guilty. She worries about the virus. In other words, even those who are competent with money, have doubts and darker days. If you’re a Molly, and things are harder than usual, don’t be too tough on yourself.
Did you spot yourself? Perhaps you saw different aspects of your habits in different personalities. Identifying your money personality is an important first step to self-help. Once you can recognise your behaviour, you can start to understand how it makes you feel and if those habits are making life better. You can begin to consider if you want or need to change a few things. When we think of money, it’s easy to assume it is just a catalogue of apps, statements and spreadsheets. But our money habits are like any habit - a creation of a human emotional response to the world. Understanding ourselves is the route to taking control of our money.