What’s Your Money Personality?

Are you a spender, or a saver? Do you budget every nickel and dime, or do you take a more relaxed attitude when it comes to managing your incoming funds and outgoing expenses? Understanding your money personality is the first step to taking control of your finances. With a bit more insight into how you save and spend, and what kind of past experiences have shaped your financial attitude, you’ll be more equipped to meet your financial goals – whether that’s buying a house, starting a college fund for the kids, or simply feeling at-ease with your financial wellbeing. 

The Journal of Financial Therapy has published an excellent study by doctorate professors at Kansas State University, into the psychological behaviors and issues related to money. Through their research, the scientists found that there are four distinct money belief patterns: money avoidance, money worship, money status and money vigilance. Which personality do you fit under and what does it mean for how you should manage your money? Read on for an overview of the study and the four money personalities.

Money Avoidance

If “fear” is the primary emotion you associate with money, or if the thought of dealing with money in any context stirs up feelings of anxiety, then you might be a money avoider.

Money avoiders typically worry that they’re spending too much and are reluctant to take any kind of financial risk. They might be concerned about credit card abuse or bank account overdrafts, and they’ll be disinclined to spend money, even for necessary purchases. The researchers found that money avoiders are likely to fall into younger age ranges, and to have lower levels of income and net worth.

While there’s nothing wrong with being cautious where money is concerned, the Kansas State study reveals the potential downsides of letting fear around money dominate our financial planning. Money avoiders might put off checking their balances or not take the time to fully understand their current financial situation – which will only lead to more concerns in the future.

When it comes to money, knowledge is power. If you think you’re a money avoider, challenge yourself to fully understand your current financial situation and to take a more active role in financial planning.

Money Worship

Do you strongly believe that having more money will solve all your problems? That if you could just win the lottery, everything would work itself out? If so, you may fall into the money worship personality type.

Similar to money avoiders, many people within the money worship category have lower than average income levels and net worth. However, the money worshippers are much more likely to carry revolving debt as they tend to spend money beyond their means. The Kansas State researchers also hypothesize that money-worshipping habits may be associated with hoarding, gambling and overspending.

The mindset behind money worship is extremely common. After all, who doesn’t want an extra $100 in the bank? However, as the Kansas State study points out, there is much scientific research that says financial windfalls have no significant effect on our mental state; and that beyond a certain number, more money doesn’t make much of a difference in our happiness.

If you fall toward the money worship personality, spend some time considering what truly makes you happy and ask the important questions about debt – how much do you owe, and do you have a plan to pay it off?

Money Status

To what extent is your self-worth determined by your net-worth? If you’re a person who feels incomplete without a certain amount of money in the bank, or who sees financial status as a competitive sport, money status might represent your money personality.

Money status describes people who view money as a symbol of worth and achievement. Interestingly, many people who fall into this category come from a lower socioeconomic home and tend to have fewer years of education under their belts. Similar to the money worship category, money status is associated with overspending and taking excessive risks.

While there’s no doubt that having more money will afford a person greater opportunities, it’s equally true that being over-concerned with financial success leads to lower levels of wellbeing, as pointed out by the Kansas State researchers. This is doubly so if risky financial behaviors are being practiced.

If money status describes you, a good strategy is to focus on budgeting to pay off debt and build your bank account, rather than turning to “get rich quick” methods which are usually much more risk than reward.

Money Vigilance

Would you tell a friend how much you get paid, or how much money you have in your bank account? Do you secretly suspect that saving your money under a mattress might be safer than leaving it with a bank? If this sounds familiar, money vigilance might describe your money personality.

Money vigilance refers to people who are secretive about their money and distrustful when it comes to common methods of financial management. People within this category might be reluctant to share financial information with friends or even their spouse, and vigilant about overspending or turning to mainstream systems of credit if they need to borrow funds.

Being wary about spending and focused on saving is not necessarily a bad thing, but too much money vigilance can lead to challenges. Saving money at home rather than at a bank can produce a significantly lower rate of return due to inflation, and some debt can be useful to build up your credit score.

If you feel you’re too vigilant about money, start by simply learning more about mainstream financial systems so that you can feel more comfortable about making the right choices.

Final Thoughts: How to Take Action  

Everyone has good habits and bad habits when it comes to money. These four money personality types are just one way of understanding what makes us tick. If you’d like to learn more about your own financial style and how you can improve your financial wellbeing, check out GreenPath Financial Wellness. Credit Union members get free access to GreenPath counselors, who use behavioral science to help members. You can watch a GreenPath webinar or call for free budget, credit and/or COVID-19 financial counseling. Get in touch at: www.huecu.org/GreenPath.