Do You Have A "Financial Personality"?

Do you have a “financial personality” and is it important that you know? According to some financial planners, credit counselors, and psychologists it is your first step to improve financial well-being. Understanding your financial personality will assist you in goal planning.

What is Financial Personality?

Your financial personality is the internal belief system which was formed by your experiences, and the habits of your parents and others around you. It has evolved over time. Everyone has their own perspective about money and if you are in a relationship, remember that opposites typically attract. Does this mean that one personality is right and the other wrong? Maybe not. However; it is important to identify and discuss each other’s feelings in order to make progress.

How do you determine your Financial Personality?

Financial planners have tools that can help you identify your traits. One is risk analysis, which is a series of questions that ranks your tendencies for risk. Risk analysis is also used when designing your investment portfolio. The most important way to discover your financial personality is to talk it out. I spend a good deal of time discussing your feelings towards money. I don’t judge but I do listen.

Have you ever found yourself anxious over your money? Do you know why? Sometimes it is simply that you don’t have enough money or that you have made a bad choice. Focusing on money can lead to anxiety, depression, greed, or envy. Just like you work on your emotional development, your relationship with money is an ongoing process. It is important to understand how money can help or hinder your emotional well-being. It is important to reflect on how your work or pursuit of money may positively or negatively affect your relationships.

Everyone needs to reflect on their financial personality in order to define why they want money and how much is enough. The goal is, (1) to understand what happiness is and how it can be achieved, (2) to pursue the goals that are most likely to lead to emotional well-being and, (3) to make money your tool in pursuing happiness.

What are the different types of Financial Personalities?

Let’s discuss several groups, each with a distinct financial personality. Perhaps you see traits of one or more of these groups in your financial personality?

Entrepreneurs believe their career achievements are their top priority, even over their financial matters. They may earn a good salary but are not content with their financial position. They believe that luck is on their side and that their hard work can bring them financial success. They like financial status and like to participate in financial decisions.

Seekers discover it is more comfortable to make financial decisions if they can rely on another’s advice. They may experience self-doubt and incompetence in dealing with their money. Seekers spend their money on impulse and tend to buy status symbols to reward themselves for their hard work. Seekers don’t put their money to work, they spend it.

Worshipers enjoy the thrill of taking a financial risk, believe more money will solve their problems and that they can never have enough. Discontented and frustrated, they let their emotions guide their financial choices. They carry credit card debt and enjoy spending more than saving.

Avoiders think their financial future is controlled by outside forces and tend to shy away from taking charge of their money. They might believe money is bad and that they don’t deserve it. They might ignore their finances and avoid thinking about it. They do not worry about their financial security because they do not feel in control of it.

Do-it-yourselfers want and need thorough involvement in their financial affairs. DIY’s are analytical and reflective in their financial decisions. They are practical consumers.

Obsessives are usually too critical of their money management. They allow their skeptical nature to block financial progress. Think analysis paralysis.

Producers dislike that hard work has failed to bring them greater financial success. They feel valued when they accommodate others but have difficulty asserting themselves.

Optimists are happy with their financial position. They experience little stress or anxiety when making financial decisions and don’t rely on money for prestige.

It is important to have a healthy relationship with your money. People have and will do unreasonable things with their money. Don’t be one of them. Be smart.

The hardest client conversations I have are at the beginning of our relationship. It is hard to discuss one’s feelings about money. I understand but remember that I have had many of these conversations and it is an important component in the client/advisor engagement.

Philip‌ ‌Swann‌ ‌is‌ ‌the‌ ‌Principal‌ ‌and‌ ‌Founder‌ ‌of‌ ‌Well-Planned‌ ‌Financial,‌ ‌LLC,‌ ‌a‌ ‌fee-only‌ ‌financial‌ ‌advisory‌ ‌firm.‌ ‌Philip‌ ‌provides‌ ‌services‌ ‌to‌ ‌young‌ ‌professionals‌ ‌to‌ ‌plan‌ ‌their‌ ‌financial‌ ‌future‌ ‌taking‌ ‌on‌ ‌the‌ ‌role‌ ‌of‌ ‌their‌ ‌financial‌ ‌ally‌ ‌by‌ ‌being‌ ‌an‌ ‌educator,‌ ‌coach,‌ ‌advocate,‌ ‌and‌ ‌accountability‌ ‌partner.‌ ‌Philip‌ ‌has‌ ‌over‌ ‌three‌ ‌decades‌ ‌of‌ ‌small‌ ‌business‌ ‌experience.‌ ‌ ‌

This material was prepared by Crystal Marketing Solutions, LLC, and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate and is intended merely for educational purposes, not as advice.