We all spend money. It’s a fact of life. Our spending habits though? That’s a different story, because we all spend our money differently. And whether’s that’s due to how you grew up watching your family handle their money, or based on your own personal experiences since you started making your own, we’ve found that all money spending habits can be compiled into four main financial personas. Can you spot yourself, or your friends, among them?
1. The Spender If you’re a spender, then your motto is: “Enjoy the best that life has to offer”. Typically, The Spender persona is more attracted to the appeal of a new purchase, and rarely feels buyer’s remorse. They like to live well and enjoy life’s pleasures, which generally makes them early adopters as they don’t mind paying the extra cost it takes to be the first to get something. They’re very comfortable with the idea of spending money, especially if they can brush it off as “treating myself.” Are you always chasing the next iPhone release, or just have to have a new bag every month, purchase a last minute plane ticket to a vacation destination for every long weekend or even just order everything on the menu when going out even if you don’t feel like eating that much? Some of the main characteristics of Spenders is that they always convince themselves that they can earn this money back, they spend more to treat themselves or on vacations than they earn, and they usually have things like credit cards as backup plans. In their more extreme cases, they can be comfortable with the idea of debts, so long as they’re willingly spending on things that make them happy in the moment; they’re all about instant gratification.
Advantages to maintain: You see money as the means and not the end, which makes you more focused on living in the present moment rather than worrying too much about the future. This means you rarely find yourself stressing about money.
Opportunities for improvement: You may want to keep track of your spending to avoid accumulating high debts that could be harder to pay off down the line, and could hinder your ability to live the life you want if things get tough.
2. The compulsive money maker Compulsive money makers live by the phrase: “The more money I make, the happier I’ll be” They believe that the secret to happiness is to make more money, which is what makes them very innovative and creative in the various ways they choose to grow their wealth. Do you have a full-time job, freelance on the side, while also taking on any odd job that comes your way even if you rarely have time to breathe? They get pleasure and validation when they see the numbers in their bank account grow, and most of their energy is spent on thinking up ways for how they can grow it even further. You might also find them acquiring new skills all the time, skills they can use start a new side project that they can make money out of.
Advantages to maintain: You’re on the right path to achieving financial freedom, and could have enough resources down the line to make your dreams come true.
Opportunities for improvement: When you only prioritize making money, you might unknowingly find yourself neglecting other important aspects of your life, like your important relationships. To break this cycle, make sure you do something spontaneous every once in a while, like taking that family vacation you’re always talking about.
3. The hoarder If you find yourself thinking: “Save today to enjoy tomorrow”, then you fall under The Hoarder persona. A hoarder is someone whose sole purpose in making money is to save it. They’re generally risk averse, and only feel stability and security when they know they’re growing their savings account, and when they’re being very conservative with their spending. Do you aggressively budget for every new expense that comes your way, have a strict savings policy with your stable income and don’t buy anything unless you really have to? The main characteristics of hoarders is that they don’t buy unnecessary items, and only live within their budget. Typically, the are great budgeteers and planners, and are always trying to learn more about money in order to find new ways to save.
Advantages to maintain: similar to Compulsive Money Makers, The Hoarders’ skill of effective saving will generally pave the way for them to achieve their desired financial health.
Opportunities for improvement: while money is definitely a means for security, you should consider a few ways to enjoy the money you’re making to avoid general burn out.
4. The investor “Make the most out of your money” is how the investor views their financial life. The Investor persona is one that wants to build a great professional legacy for themselves. They enjoy building their personal wealth, along with the influence that comes with it. They are inherent risk takers, and find themselves concerned with the log term more than the instant gratification that comes from short term planning. Are you always putting money in your friends’ and acquaintances’ new projects, are always on the lookout for the next idea that you think could blow up, and think stagnant money is wasted money so you save only to invest again? You will most likely find the Investor persona always educating themselves in different markets, which accumulates into them having immense knowledge in various industries, as well as the workings of the financial benefits and pitfalls of each. While their day-to-day views of money makes them seem more interested in the machinations that come with being a successful investor, you might find that, in the end, they’re working towards the day when their passive investments yield enough returns to cover all their bills, and they can start focusing on ways to enjoy their success.
Advantages to maintain: your discipline in long terms planning increases your chances of making your financial dreams come true, and your level of comfort with high risk situations will likely lead you to reap high rewards.
Opportunities for improvement: careful planning and deliberation is needed, especially in high risk investments. Try not to fall into the mistake of viewing it all as a game or being over-confident in your abilities. Do your due diligence with every decision, and make time to celebrate all your little wins along the way.
In the end, Regardless of which persona you fall under, it’s important to know that there is no right or wrong way to spend or handle your money; there is only what works for you, your mentality and your lifestyle. Try to find out more about the pros and cons about which persona you fall under, because at the end of the day, the one common goal between all these types of spenders is to enjoy a life of financial freedom.
