Everyone has a different approach to their financial health, and while some of us may be more likely to cling to our funds and worry, others are more likely to spend. There are 7 distinct personalities – which one do you fall under?
Many of us will stress about our financial situation at least once in our life. And while the goal is to find financial freedom and health, most don’t realize they have a distinct money mindset. Understanding your money mindset is vital to improving your financial status and moving towards abundance.
Ken Honda, who is an expert with 10 + years of experience under his belt researches the psychology of money and happiness. According to him, there are 7 money personality types.
Once you have identified your mindset, you open yourself up to the potential to improve your relationship with finances and wealth. Here are the 7 personality types, and the pitfalls of each.
1. The compulsive saver.
Compulsive savers are always setting money aside, and oftentimes, without any specific goal in mind. Their sense of security is tied to their financial health, and they are usually pretty frugal. Honda says their pitfall can be that they save everything and never truly enjoy their money. He advises moderation to help and to find a balance between spending and saving.
2. The compulsive spender.
Compulsive spenders may find that they spend money on things they have no use for, and love treating themselves and others, even if they don’t have the means for it. Compulsive spenders are also likely to be emotional spenders. Unfortunately, compulsive spenders often end up in massive amounts of debt. And despite that, they will likely continue their bad habits. He suggests creating a budget and reminding yourself of your responsibilities before spending on excess.
3. The compulsive moneymaker.
Compulsive moneymakers often tie their happiness in with their financial status. They may spend most of their time trying to find ways to make more money, and gain a sense of validation and pleasure through recognition. The downfall is that compulsive moneymakers may put their personal needs on the backburner to make more money. In turn, they may not spend quality time doing things they love with the people they love. He says it helps to understand that money isn’t everything and that “there’s more to life than money.”
4. The indifferent to money.
Those who fall under this mindset may not think much about money. They may even believe money is the root of all evil and despise the notion that money could influence the most important aspects of their life. He warns that money, in a modest way, is necessary. He also warns about becoming too nonchalant with your finances. His suggestion is to stay aware of your financial situation, including expenses, debts, savings, etc. While money isn’t everything, you should still use it wisely.
5. The Saver-Splurger
If you are a saver-splurger you may go between being a compulsive saver and a compulsive spender. When you do start saving, you may find it hard to stay consistent because you may impulsively decide to spend your savings. This inconsistency can be quite exhausting and not very fruitful. His suggestion is to think about how the expense will make you feel in the long run and to stay goal-oriented.
6. The gambler.
Gamblers are a mix of a moneymaker and a spender. The idea of turning money into more money is quite tempting to them and unfortunately, they may gamble their money away before they even realize it. Unfortunately, this can lead to loss. He advises maintaining awareness and tightening up on financial risks.
7. The worrier. (I feel attacked.)
Regardless of the money, you may have, you are always afraid of losing it. You may find it difficult to believe in your ability to achieve financial abundance and in turn, you likely obsess about your finances. Because of this, you may become too worried and anxious to enjoy yourself or live in the present. He says to try to maintain a positive financial outlook and also says it could be helpful to talk to a financial advisor to ease your mind.