6 Financial Personality Types and Their Spending

Not one person is the same; everyone is unique in their own way. Interestingly, the same can be said about one’s financial personality. Each person has their own way of managing their money, and there are many possible reasons as to how or why they have developed the kind of management habits they practice.

  • People seem to adopt the spending habits of their parents, relatives, and other people in their lives, even if it’s not always necessary or appropriate. For instance, people who grew up with parents who always give expensive gifts to birthday celebrants would likely do so, too. 
  • Cultural, religious, and societal norms may dictate what should be spent on and what shouldn’t, like in the case of weddings.
  • Your unique personality, characteristics or demographics, and experiences influence your financial habits. For instance, some people spend small bills only on small purchases, while there are people who prefer large bills so they can save or use it for a more considerable expense 
  • The internet and mainstream media can sway people into buying specific items through ads or the social media posts of celebrities or influencers. According to a survey about US spending habits, 90% of millennial respondents say that seeing social media posts “creates a tendency to compare their own wealth or lifestyle to that of their peers.”

Considering these factors, can you now figure out the financial personality you have? Do you let your upbringing or your personality dictate how you should be spending your money, or are traditional and digital media doing an excellent job of persuading you? 

Which type do you fall into?

Learn more about these different types of financial personalities, as well as some money management tips to correct the wrongs that you may have been doing with your money all along.

  • The Risk-Taker

You know you’re a risk-taker if the first thing you do with your money is to put it somewhere it will grow. Risk takers know the value of money and try to put it in to work for the long run. That’s because they want to someday use their passive investments as a means to sustain their lifestyle and every expense.

Because they are into trade, risk-takers need to be careful in their decision-making. Greg Davies, a specialist in studying trading patterns and former head of a specialist behavioral finance unit at Barclays, says that this type “… often buy high and sell low, as they are more comfortable with risk when things are good, and remove risk when times feel bad.”

However, according to a study by the academics of the University of California, 82% of investors underperform because they were “trading instinctively rather than strategically.” Therefore, for risk-takers who want to improve on money management, they need to continue learning and set rules before trading and stick to them; for instance, limiting trades to only what they can afford to lose. 

  • The Avoider/Ostrich

Do you make purchases out of needs and despise buying unnecessary things? While this does sound like a smart choice, an Avoider or Ostrich also tends to have no drive to organize their finances or develop money management skills, that’s why they just don’t make purchases that they deem bothersome. 

In addition, the danger is that they have no idea how much is left in their bank account. Along with that, they also don’t make long-term investments. Claudia Hammond, a psychology lecturer, said that this type believes that “Making no decision always feels easier than the possibility of making the wrong decision.”

Avoiders should stop being oblivious about their financial standings. They can start by examining their finances, looking at their income and expenses, and looking for ways to save money. From there, they can make small goals that can be further empowered by looking into better financial education. Once they’re comfortable enough, they can also ask for financial tips from a financial planner. 

  • The Unnecessary Spender

If you’re someone who’s easily swayed by ads or social media posts when it comes to the latest trends you should be spending on, then you may fall into this category. The Unnecessary Spenders’ fear of missing out (FOMO) makes them willing to spend on expensive things to follow the trend. 

They don’t just spend on themselves; they are also generous to their family and friends. They tend to value quality over price and are willing to pay more for convenience. However, it sometimes leads to impulsive buying. 

Be smarter with your expenses; buy what you need and leave the wants for next time so you can save more. If you have incurred any debt, determine the interest, get a zero-rate deal, find out how much you need to pay monthly to complete the balance within the offer period, and stick to a budget. 

The good news is that The Unnecessary Spenders may have a high-risk appetite and are confident in their investment abilities. With the right knowledge and keen business sense, they can make high-yielding investments. They just have to avoid unnecessary gambles that may lead to significant losses.

  • The Promo Hoarder 

Are you the type of shopper who makes large purchases when the price is discounted, even though you don’t need really need the item yet or even if the quality is quite uncertain? The Promo Hoarders keep a tight rein on their finances, so they tend to buy in bulk so that it can last them for months. Even though they are quite the penny-pinchers, this makes them prone to impulsive buying, too. 

Undoubtedly, The Promo Hoarders have saved up thanks to their resourceful nature. If you haven’t already, put your savings into good use by making investments. A financial advisor could help determine your risk level so you can make worthwhile ventures. 

  • The Street-smart Spender 

The Street-smart Spenders are financially disciplined consumers who know how to balance their spending and savings. They utilize different methods of payment outside of cash like a credit card, mobile wallet, or rewards app, but only because they are practical. 

It’s smart to continue using cards and apps, especially when necessary. A credit app like Cashalo may even be helpful when you need to make installment purchases and something to opt to instead of borrowing money. Go cashless as much as possible to gain rewards or something similar, which can go a long way when saving up. 

  • The Financially Conservative

If you have prepared well for the future by acquiring insurance and health card and making investments, you are a Financially Conservative type. These people are cautious with their finances and ventures, and know basic money management but are willing to improve. 

The Financially Conservative works to minimize the risks by having a clear budget and goals. They still buy what they want, but would carefully weigh options to avoid debt, or save up and pay cash, except of course in the case of large purchases. Therefore, impulse buying is rarely an issue.

Being financially conservative can lead to wealth building. They are prepared for any financial emergencies, including retirement. Savings and investments and a well-organized plan help The Financially Conservative meet their financial milestones. Do not overextend yourself when investing, and ask a financial adviser to make investing easier for you.


Build a better relationship with your finances!

From the information, you may find that you fall into one type, or you may think of yourself as a combination of two or more kinds. Whatever category you belong to, understanding your spending habits and pattern is vital in taking a step toward saving for the future. 

For any financial type, creating and sticking to a budget, filtering the wants from the needs, and getting over the FOMO to focus on what you need for the long term are all necessary steps in realizing your financial future. 

Being aware of your financial options is also necessary to utilize the best and most convenient mode of payment suitable to your needs.

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