Have you ever wondered why you handle money a certain way? Several factors contribute to the way you approach money management. Part of your approach is rooted in upbringing and the way you think about money (known as a money script). But did you know that you also have a money personality? You may be more familiar with personality typing as it relates to the Myers-Briggs Type Indicator personality inventory (for example, extroversion versus introversion or feelers versus thinkers), but there are also types when it comes to money.
Experts differ when it comes to agreeing on how many money personality types there are, but according to psychotherapist Olivia Mellan, there are five money personalities. Learning more about how you operate when it comes to your cash can improve not only the way you manage money but also the way you interact with others — especially your partner.
Once you learn what prompts you to buy, spend, or do nothing, you have access to the keys to building financial health, wealth, and more satisfying interactions with others. The only way you can stop bad money habits or improve good ones is to get to the root of your money motivations. Your money personality has a bigger impact on the way you handle finances than you may realize. Here’s a quiz to help you figure out your money personality.
1. You’re at the mall and you see a shirt that you like. What do you do?
A. Pull out your wallet and buy it immediately. If you don’t buy it now, it will be gone.
B. Wait until the shirt is on sale.
C. You decide not to buy the shirt. You have enough clothes.
If you answered A, you’re most likely a spender (or just really impatient). Spenders tend to focus on the here and now, and seek immediate pleasure. Chances are you don’t have an emergency savings fund, and if you do, it won’t adequately meet your needs. Spenders tend to have difficulty saving money and prioritizing financial obligations. Mellan says spenders may be reckless, spending most of the money they earn, and have a propensity to be in debt.
If you have a tendency to overspend, your first step should be to work on a budget. This will help you see how much money is coming into and going out of your household. Also take a list with you when you go shopping so that you’re not tempted to purchase things you don’t need.
2. You get an inheritance from a family member. How do you spend the money?
A. You invest some of the money, spend some, and then save the rest for a rainy day.
B. You spend it all in three months.
C. You cash the check and hide it in your house.
If you answered C, you may be a hoarder. Hoarders like to save money. The only problem is you take your saving to the extreme. You tend to have difficulty spending on yourself and even those close to you. Entertainment, vacations, and even clothing seem like unnecessary expenses. On the bright side, you manage your money well and plan ahead for unexpected emergencies. You also stick to a budget. However, the bad side of hoarding tends to outweigh the good. Mellan says extreme hoarders feel a compulsion to keep their money close, so they may shy away from investing or may hide money under a mattress instead of depositing it in a bank.
3. Your boss rewards you with a significant bonus for a job well done. How do you respond?
A. Thank your boss and put the money toward paying down some debt.
B. Tell your boss thanks, but no thanks. You’re satisfied with your base salary.
C. Buy a new tech toy.
If you answered B, you are what Mellan describes as a Money Monk. Having extra money makes you anxious, so you do whatever it takes to avoid becoming too wealthy. In your mind, money is the root of all evil (yes, we know the original scripture says the love of money is the root of all evil, not money, but Money Monks actually think money is evil and should be avoided at all costs). If you lean toward being a Money Monk, you also fear that having too much money will make you greedy and selfish and that it will cause you to lose your positive human, political, or spiritual ideals and values.
4. A friend asks to borrow money, what do you do?
A. Say “no” before he can even get the entire question out.
B. Agree to lend the money, but set up a payment plan so that you can be repaid in a timely manner.
C. Lie and say you don’t have any money to lend. You actually have more than enough, but only you know this.
If you answered A or C, you may be an Amasser. If you’re an Amassser, you’re very happy when you have a lot of money. If you don’t have money to spend, save, or invest, you feel unfulfilled. Money and self-worth go hand-in-hand for you, so you feel unworthy and powerless when there isn’t enough money to go around. Amassers may also feel depressed when funds are low.
5. You just received your third overdue notice from a creditor. How do you handle the situation?
A. You never get overdue notices in the mail. You pay your bills immediately.
B. Ignore it.
C. Call and ask for a payment plan.
If you’re an Avoider, as in Answer B, you tend to ignore financial responsibilities. You let your bills pile up, you have trouble balancing your checkbook, and your finances are generally a mess. Avoiders tend to ignore their finances because they feel overwhelmed. Those with extreme financial avoidance issues may also have anxiety when faced with tasks surrounding money management. Mellan says this is similar to the panic some people experience with math anxiety. If this describes you, it may be helpful to begin working with a certified financial planner and/or a certified credit counselor so that you can get back on track.
Identifying your money personality
If you’re having trouble spotting your money personality, it may be helpful to take the quiz with your partner or friend. If you’re really troubled by the way you manage finances, you may even want to speak with a financial therapist. He or she can help you gain a deeper understanding of why you handle money a certain way and teach you how to lessen or eliminate bad financial habits.
More from Money & Career Cheat Sheet:
- 3 Signs You Have a Bad Relationship with Money
- Which Personality Type Make the Most Money?
- Debt-Related Depression is Real: Are You in Over Your Head?