Getting to know your money personality can help you rein in your spending habits and take back control of your personal finances
According to Google trend data, the search term "money personality" received a 335 per cent uplift in the last month alone. Such an uplift reflects the nation's desire to learn how personality impacts a person’s spending habits.
Here, finance saving money expert Pete Ridley at CarFinanceSaver reveals the UK's core money personalities, along with actions to adopt that remedy the negative consequences of each personality type.
The Spontaneous Spender
Spontaneous spenders often make expensive impulse buys with little to no pre-planning
A spontaneous spender refers to a person that exhibits a "spend now, think later" attitude. They can find it tricky to differentiate between "need to haves" and "nice to haves", and often feel "spender’s guilt".
"A spontaneous spender refers to a person that exhibits a "'pend now, think later' attitude"
"The spontaneous spender should focus on regulating their spending," says Ridley. "If you recognise yourself as a spontaneous spender, in the future before you make a purchase, take time to decide whether the item is a ‘need to have’ or a ‘nice to have’.
"If it’s a nice to have, assess how much you love it. This will aid in avoiding splurges that provide short-term satisfaction and post-spenders’ guilt."
The Determined Saver
A determined saver's diligence may actually mask a fear of spending money
From the outside, a person that demonstrates a determined saver approach to their finances is all positive however, this may not be the case.
An underlying sense of worry and fear can be at the root of a persistent saver, and their determination to save disguises an overwhelming fear of money.
"Saving is great," says Ridley, "but it's important to regard money as a friend and not a foe. Always be sure to make non-essential purchases. These items don’t have to be a major expense, but just enough that you acknowledge that money can be there to be enjoyed and not just put away."
It's easier than ever to look at our bank balance with digital banking, but the avoider still struggles to check their finances
Four per cent of the UK admit to never checking their bank balance, while only one in five claims to check it every day.
In a cost of living crisis, checking your bank balance can feel intimidating. Keeping the same spending habits that were well and good in previous years may lead the spender to live beyond their means throughout 2023.
"Four per cent of the UK admit to never checking their bank balance"
Avoiding checking your bank balance can increase the fear and anxiety that surrounds your personal finances. Taking hold of your finances can not only be liberating but remove any fear. Knowing the facts allows you to reclaim your finances.
If needed, make a financial plan of action and segment your finances into the following:
The Money = Status
A money equals status personality type spends money beyond their means to keep up appearances
The money equals status money personality type tends to get a buzz from what other people think. They can be generous and will never voice any money concerns.
This personality type can live beyond their means by making purchases that they don’t need, striving to keep up with the Joneses and saying yes to friendship plans that they cannot afford, to keep up the appearance of financial well-being.
According to Ridley, the money equals status personality type can be the most detrimental to both personal finances and mental health.
Now more than ever, it’s important to understand that everyone is reassessing their finances to align with an increase in the cost of living.
"Money doesn’t necessarily equal status or even impress those around you"
To stay within your financial means, it’s vital that you reapproach what your finances mean to you and why showcasing them ignites a sense of self-worth. Attempt to avoid purchases that you have previously considered status worthy for a month. Assess how you feel and whether your relationships with people have changed. It's unlikely that they have.
It's here that you can adopt the 50/20/30 rule: 50 per cent essential living expenses, 30 per cent disposable income and 20 per cent saving and paying debts.
This will maintain financial well-being while helping to acknowledge that money doesn’t necessarily equal status or even impress those around you.
Read more: Shape up your financial relationship
Read more: How to talk about money productively
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