Home Personal Finance which of the 5 money personalities are you?

which of the 5 money personalities are you?

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Are you a spendthrift or a super saver when it comes to money? Do you donate all your money or ignore financial requests until it’s urgent?

Decades of focus on financial literacy have made it clear that how we manage our money is more than just access to information. A new study identifies five different money personalities that influence how we spend our money.

Commissioned by Te Ara Ahunga Ora (Retirement Board) to operate a free independent personal finance site Sorted, our research Includes an extensive review of research on personality traits, values, and attitudes. We then created an online survey to find out how people relate to money, and about 500 New Zealanders responded.

The research results are new online money personality quiz It is designed to help people understand their money personality and inform their financial decisions and actions.

New Zealand and Officially in recession, understanding money management is more important than ever. Despite our best intentions, we struggle to consistently make the “right” financial decisions, such as saving enough, using debt wisely, managing insurance policies and KiwiSaver often

spend money better

According to Te Ara Ahunga Ora, New Zealanders Good basic financial skills – Budget and track your money. However, it scores lower than comparable countries such as Canada, Norway, Australia and Ireland when it comes to higher financial proficiency, such as long-term savings. I’m not even sure about cash.

There is growing evidence that personality traits, monetary values, and attitudes each play important roles in helping or hindering us from making “smart” financial decisions.

READ MORE: Storm hits future New Zealand retirees: Still have rent, not enough savings to avoid poverty

Attitudes toward saving, how much we value material possessions, and how much we are willing to take risks all influence the financial decisions we make and, consequently, our financial well-being.

5 money personalities

We identified five different money personalities: Entrepreneur, Socialist, Minimalist, Modernist, and Realist, each with their own strengths and weaknesses.

entrepreneur He is a financially confident, forward-looking planner who enjoys managing his household finances and prides himself on being financially savvy. Their strengths include self-control, financial savvy, and making money work for them.

Entrepreneurs are less likely to make impulsive or emotional purchases. However, their ambitious approach, which sees money as a priority and symbol of success, is incompatible with materialism and may lead them to spend money to gain status rather than value or utility. I have. Businesses benefit from learning about investments and planning for the future.

minimalist You are frugal, confident in your ability to save, and your finances are good. Minimalists value a simpler life, score lower on materialism, and are less prone to impulsive or emotional purchases.

Their weakness is that they are less likely to take financial risks, even if they have the potential for higher investment returns, so they don’t always make their money work for them. Low-cost passive investment strategies may appeal to minimalists.

A new study identified five different money personalities that help explain how different people manage their money.
Jordi Salas/Getty Images

socialite Fun risk-taker, sociable and confident in handling money. Generous and extroverted, they tend to be more materialistic than other personality types and tend to live for today rather than making plans for tomorrow.

Their high risk tolerance suggests that some socialites may take unwise levels of financial risk. People in this group tend to make impulsive and emotional purchases, which can make them prone to overspending and carrying too much consumer debt.

However, socialites may want to explore active investment strategies and riskier investment classes. Taking calculated risks and building financial resilience is a key focus for them.

contemporary You don’t enjoy managing money, and you lack confidence when it comes to financial matters. They may say they are spendthrifts, even though they are less materialistic than others. Living today, they tend to waste their emotions impulsively and are generous with their shortcomings.

For modern people, the emphasis is on increasing their economic resilience by paying off debt and building an emergency savings fund so they can share their wealth with others without affecting their own financial well-being. It is written. By working on your money mindset and general financial knowledge, you may build confidence and savings and take a passive, or “set and forget” approach to your financial life.

Read more: $400 a week shortfall: KiwiSaver’s current trajectory means people in their 40s will have a bleak old age

realist You are future-oriented, very conservative with risks, and appreciate money. However, despite being meticulous about their financial situation, they lack confidence in their handling of money.

The most introverted personality type, the more ambitious realist may be materialistic, but less likely to make impulsive or emotional purchases a habit. This suggests the importance of building confidence and encouraging appropriate investment risk taking. Given that they don’t like making money decisions, automating bill payments and savings may be appealing.

know your money

Each money personality presents different challenges in making financial decisions.

Answering Sorted’s money personality quiz is fun, but it can also help you make financial decisions right now.

It’s not just about labels. Knowing your money personality helps you understand your strengths and weaknesses when it comes to making financial decisions, and gives you tools to improve your financial resilience and security.

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