What’s your money personality?
We all have our own personality when it comes to managing money, but there are some broader characteristics that define our ms money Spenders, Debtors, Optimists and Savers.
ms money Saver
Savers think thrice before spending. They buy what's on special or in season, never buy what they don't need and can usually extract $1.50 of value from every dollar. Budgeting and keeping track of their spending is a breeze. They hate debt, so their credit card gets paid off in full each month and they're years ahead on their mortgage repayments.
Ask a Saver how much something cost and they will usually be able to tell you to the exact cent. They have a nest egg and a robust retirement, but hate handing over control of their money to anyone, so often leave it in a term deposit rather than growth investments, which they see as too risky. They also find the thought of borrowing to invest far too stressful.
Personality clash
When a Saver pairs up with a Spender, the fur can fly.
Change tips
It's important for Savers to balance saving and spending because money is also meant to be enjoyed. Savers need to develop a diversified approach to their investments and seek appropriate advice from someone who will talk things through, as opposed to telling them what to do.
ms money Debtor
Debtors are comfortable being in debt. Buy now, pay later is their motto. Why wait to save up the money when they have so many credit cards? Debtors are often generous and anxious to win approval, which contributes to their spending habits.
Debtors view credit cards as a necessary accessory and are usually the first to sign up for the latest card, rewards system or mobile phone contract. They use debt to fund things such as holidays, lifestyle expenses and consumer goods, convincing themselves that these things are absolutely necessary.
They totally ignore the interest charges and the fact that these items have no future value. They tend to have only a vague notion of how much they owe and often juggle debt from one credit facility to another.
Personality clash
If partnered with someone who is debt averse, Debtors often try to hide the true extent of their debt, or have additional credit facilities their partner is unaware of.
Change tips
Debtors need to have a serious look at their spending habits and find ways to use debt to their advantage, such as having a mortgage or investment loan, using debt tolerance to help build assets for the future. They should streamline their credit facilities as that makes them more likely to keep on top of what they owe.
ms money Optimist
Optimists have no cares and truly believe that it will all work out somehow. It's amazing how often a tax refund or unexpected windfall arrives just in time, reinforcing their belief that all will be okay. Optimists enjoy treating themselves and their friends. They don't plan for the future, so are unlikely to have money put away for emergencies. Planning for retirement doesn't even enter their thinking.
Juggling their finances is just part of the Optimist's everyday life and they often incur overdrawn fees and late payment charges due to a lack of focus on the detail around their money.
While maintaining a positive attitude to money is a good thing and successfully juggling the finances might be okay now, the Optimist's lack of attention to detail could be their undoing down the track.
Personality clash
Their laissez-faire attitude to money can drive a more conservative partner to distraction.
Change tips
Being more involved with their money doesn't mean an Optimist has to plan every step for the rest of their life. Setting some clear financial goals and putting simple strategies in place ensures they have a Plan B should things not work out.
ms money Spender
Spender love to shop. Whether it's the latest designer handbag or a regular small item, spending is part of their daily routine and they love the thrill of the purchase.
This type of spending is usually emotionally linked, but can often be followed by a sense of panic. The Spender spends money because it makes them feel good and they often use spending as a reward or compensation.
Most spenders don't have a clue about their bank balance or their overall financial situation. They hate budgets and detail, but will spend hours sourcing their next purchase. Forget about putting money aside for the future - a Spender may find themselves heavily in debt and struggling to make ends meet.
Personality clash
When partnered with a Saver, it is likely to be a stormy ride as the Spender tries to get the Saver to spend and visa-versa.
Change tips
Spenders need to understand that finding the balance between spending and saving doesn't necessarily mean rigid budgets and penny-pinching. By using a structure in which to set aside money for bills and some regular savings, it's fine to spend what's left.
Limiting spending to what's in their everyday bank account or swapping the credit card for a debit card can also help.
