What Is Your Money Personality Type?

When the topic of personality type comes up, the first thing that comes to mind is probably the 16 personality types – INFP or ESFJ. But how many of us have actually heard of  a money personality type? Let’s dive right in and explore the history behind the money personality concept.

What is Money Personality Type

The concept of money personality type is derived from money psychology. Money psychology refers to the study of human behaviour with money. Our money personality types are closely related to our emotions when associating with money. If you want to get to the root of why you behave the way you do – why you spend, save, use debt, put off investing and so on, you have to dig deeper into how the psychology of money affects you. This is how the concept of money personality type came about.

Different Money Personality Types

Your character traits in regards to money matters can be classified into specific groups. The key is to find out which type matches closest with your money spending behaviour. There are seven money personality types as mentioned in Ken Honda’s book ‘Happy Money: The Japanese Art of Making Peace with Your Money’.

The Compulsive Saver

This group of people view money as a source of security and they often fear irrational spending. They have a mindset that saving money is the only way to feel secure in life. They are also the person their friends often go to for the cheapest deal in town. Any saving is never too small.

The Compulsive Spender

A compulsive spender is someone who tends to spend money on things they don’t need. When they experience emotional distress, they turn to making purchases for immediate satisfaction. Among your friends, there may be someone who frequently treats people to something special, even for no particular reason – there is a possibility that they are a compulsive spender.

The Compulsive Moneymaker

Compulsive money makers are a group of people who are fixated on earning as much money as possible. They believe that money is the key to happiness. Money makers gain a sense of accomplishment when they receive recognition for their financial success.

The Indifferent-to-money

As the name suggests, people who are indifferent to money don’t see money as an important part of their lives. They feel strongly that money should not influence important decisions in their life and the topic of money is rarely weighing on their minds.

The Saver-Splurger

Someone who falls under the saver-splurger category shares common traits between a saver and spender. They usually start out with saving tons of money but end up giving into spending impulses suddenly.

The Gambler

Similar to the saver-splurger, the gambler shares common traits between moneymakers and spenders. They can quickly get lost in the thrill of risk and the promise of rewards. Gamblers may gamble away their money for the purpose of escaping boredom.

The Worrier

A worrier is someone who is constantly concerned about losing their money – regardless of how much money they have. They tend to lack confidence in their ability to achieve financial freedom. They place their focus on the worst that could happen if they run out of money.

What you should look out for according to your money personality type

Once you determine which of the seven money personality types you belong to and have thought about how you usually approach money, it is time to see what you can do to make the most of what you have. Making small changes can often yield big results. Slowly but surely, you will eventually get there.

The Compulsive Saver: It’s time to enjoy life

One of the greatest pitfalls for a compulsive saver is missing out on enjoying life. Some compulsive savers may be too focused on saving money that they choose to skip out on activities that bring them happiness and purpose in life.

Money advice: It is all about moderation. Strike a balance between enjoying life and saving money.

The Compulsive Spender

Compulsive spenders need to be extremely cautious about making big purchases beyond their means. Having a huge debt often doesn’t stop a compulsive spender from going on a shopping spree. In extreme cases, compulsive spenders run a risk of going bankrupt if they consistently spend more than they earn.

Money advice: Create a budget plan to help you see things from a different perspective. Spend more time on considering the trade-off before purchasing something you already have. For example, you are sacrificing money for paying off your debt or saving for retirement when you splurge on the latest technology in town.

The Compulsive Moneymaker

A compulsive money maker can fall into a dangerous territory if they focus too much on making money and neglect their other aspects of life. For instance, they may choose to work on weekends over spending time with family and friends.

Money advice: Recognise that there is more to life than money. Instead of burning your weekends on earning money, you can choose to build on relationships or pursue your hobby.

The Indifferent-to-money

People who fall under the category of being indifferent to money may be content with a modest amount of money. However, things can get ugly if they are not responsible with their finances.

Money advice: Make it a point to be more aware of your financial standing in terms of monthly expenses and any debts you may have.

The Saver-Splurger

Someone who is a saver-splurger may experience emotional stress when the pendulum swings from being a compulsive saver to a compulsive splurger. A saver-splurger may often be disappointed in themselves for working hard to save money only to lose it quickly.

Money advice: Like their compulsive spender counterpart, a saver-splurger rarely puts thought into their purchases when they are on a splurge. Before making big purchases, imagine your future self and how you might feel post-purchase. It is also important to not lose sight of your financial goals.

The Gambler

A gambler may experience sudden winnings or losses. And things can quickly go out of hand when they start to borrow money from other sources such as their retirement fund or loans to make up for their losses.

Money advice: A gambler should aim to be more cautious in terms of financial risks. Set aside monthly savings before making any big purchases.

The Worrier

While it is a good thing to be aware of what could happen when you are unprepared for the future, you should not dwell in anxiety at the present moment.

Money advice: Try to look at the bright side in terms of money matters. Try to understand the underlying root cause of your financial worries by speaking to a financial advisor.

One of the simplest ways to start financial planning is using financial applications such as Planner Bee. Planner Bee acts as your personal financial advisor that is easily accessible through your mobile phone.

Available for iOS and Android users.

Tips for couples with differing money personality types

Most of us probably don’t have the privilege of sharing the same money personality types as our partner. Different money personality types can pose a potential problem and the trigger points for conflicts on money-related matters. However, don’t worry too much as we are here to help by sharing 4 tips on how couples can overcome their differing money personality types.

Tip 1: Understand and embrace the differences

The first step to solving any problem is to first identify and understand the root cause. In this case, it would be to identify yours and your partner’s money spending habits. Understanding your money spending habits can help to narrow down which money personality type you most likely belong to.

This tip involves a mindset shift where you see the differing money personality types as a new opportunity rather than a challenge. When you embrace each other’s differences, it is easier to work together towards a better financial future. The key to good financial health and a healthy relationship is understanding each other’s views and behaviour towards money.

Tip 2: Set financial goals together

Setting financial goals together is arguably one of the most important financial tips for couples. As a couple, find time to sit down and discuss what you want to achieve together and how you can get there. Some of the considerations include but are not limited to:

    • Budgeting daily household expenses
  • Allocation of responsibility for living expenses and bills
  • Ways to pay off existing debts, either together or individually
  • Handling financial emergencies
  • Saving plans and investment strategies

Tip 3: Experiment with different money management strategies

As the cliché saying goes, “you never know until you try”. That is exactly what the third tip is about – explore different money management strategies and find out what works for you and your partner. However, this tip is dependent on the previous tip on setting financial goals. Only with a goal in mind, then you are able to brainstorm and decide on which money management strategies to experiment on. To keep things simple for you, we have come up with the following money management strategies to get you started:

  • Separate your finances
  • Combine all your finances
  • Manage joint and individual bank accounts
  • Living off one partner’s income and saving the other partner’s income

This is a trial and test period where you and your partner are encouraged to try out as many money management strategies as possible and find one that suits best. 

Tip 4: Review finances regularly 

Similarly to performance appraisal conducted at the workplace, regular reviews should also be done for financial plans. As a couple, discuss your budget, income, and spending at least once a month. Talk about how your budget looks and whether the money management strategy is helping to achieve your financial goals. These scheduled check-ins can help you identify what you can do to improve your finances. It can also help strengthen your communication and trust level as a couple.

As a couple with differing money personality types, it can be difficult to work together. However, don’t let this difference cause a strain on your relationship. Effectively communicating your needs and thoughts with your partner can help in customising the right money management strategy that works for both of you.

The Bottom Line

While you may not be able to change your money personality type completely, you can acknowledge it and address the financial challenges that it presents. Managing your money involves self-awareness; knowing where you stand will allow you to modify your money spending behaviour to better achieve your financial and life goals.

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