April being the financial literacy month financial wellness takes centre stage. Though it could not have come at a worse time when the world is struggling with the Coronavirus pandemic, it might be the perfect time to reflect on your finances. Financial wellness as we know it is basically the process of successfully managing your finances. A crucial determinant of how you spend your money is your money personality. 

But what is your money personality and how does it affect you?

Well, money personality is basically your approach to handling your finances, spending habits, saving, investments, and financial opinion. In this sense, your money personality greatly determines your bottom line. 

Now you see why it is important to know your money personality type. You can take this free online quiz or this money personality test and get to know your money values.

Experts say that there are four main money personality types.

Spender/Cash Splurger 

Do you find yourself frequently buying gifts for your friends or loved ones? Are you always picking up the tab when you go out with your friends? Even though you have a budget do you blow over the stipulated amounts?

If this is you then you are definitely a spender. You derive satisfaction from the act of purchasing services and gifts for yourself, family or friends. In truth, sometimes your spending might go over and above your earnings but you would still dip into your credit card to fulfil the craving for shopping.

The cash splurger is closely related to the spender. The difference is the motive behind his or her spending habits. For the splurger, your primary objective is to gain admiration from your friends or elevate your status. In an actual sense, overspending does not make you happy instead you seek approval and recognition. 

The best advice for both the spender is to create limits, devise a budget, and keep a record of your purchases to determine areas where you need to cut back. For cash splurges, it is prudent to remember that true happiness is not based on false perceptions. There’s a common phrase that goes like, “those who really care about you do not care.” it simply means those who truly care for you are not swayed by your financial status or what you can do for them.

Saver/ Amasser/ Fitbit financier

These three terms basically mean the same thing. But different personality tests will you use different terms hence the need to present the three as one and the same thing.

As a saver, you are happiest when you know your money is sound and safe in your piggy bank or any other savings account for that matter. More than the other personality types, you are addicted to tracking your finances and you can only rest easy when you have checked your bank balance. You find security and power in your money. As such, you have firm control over your finances and are not easily swayed to make unnecessary purchases or investments that are too risky. 

The Fitbit financier is the extreme version of a saver. Their money-saving habits are propelled by the anxiety over unpredictable life circumstances like a sudden layoff or other big life changes.

The best advice for this personality is to seek financial advice particularly on investments from a financial advisor or investment portfolio manager. Equally, you need to learn not to worry too much over unpredictable life changes that you have little or no control over.  Dip your toes one at a time in investments. Begin with what makes you comfortable now and gradually venture into bigger investments.

Hoarder/ Controller  

The hoarder is a close cousin of the amasser. They are risk-averse and prefer to stick to a budget. They are loyal to their finances and will do a regular review of their budget to ensure that everything is as it should be. The greatest fear for a controller is making a poor money decision that could make them poor so they are keen on saving to the extent of overlooking their well-being just to save that extra. Most of the time, as a controller your money decisions are based on past encounters where you might have experienced financial hardships. To avoid finding yourself in a similar situation you opt to take charge of financial matters in your family. Also, you do not shy away from money conversations and pride yourself in the ability to set long-term goals and invest in big ventures for the future.

The best advice for the hoarder is to learn to strike a balance between making investments and long term goals and learning to enjoy some of your money now. Besides, you can seek psychological counselling to help you cope with the financial anxiety that you are experiencing. Even as you work to secure your family’s financial future, put in place measures such as securing a medical cover, investing in life insurance, long-term investments with consistent income, etc.

Avoider/ Ostrich 

Like an ostrich, the avoider would rather bury their head in the sand and all together forego the responsibility to organize his or her finances.

As an avoider, you are best suited not to know your bank balance. Your motto is to leave things to chance. The idea of planning for retirement seems far-fetched to you and you think that there is still time. You avoid money conversations at most and are passive about your finances.

This behaviour is mainly fuelled by the fear of failure, hence, your passive state.

The best advice for the avoider is a change in mindset. Get to the root cause of your anxiety and work your way from there. You can begin by taking a look at your bank balance and appraise your financial obligations. It’s okay not to have it all in control and we all cannot be financial wizards. But start by engaging in simple money tasks for yourself. Example look for a bank with better saving rates or save your extra change in a money jar for use at the end of the year. Such tasks will inspire your confidence in money matters and soon you might find yourself contributing to money discussions.

There you go! The four money personality types. As I mentioned earlier, April is financial literacy month. Your contribution to financial literacy can be as simple as undertaking a personality test and begin your journey to financial wellness.

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