What is your financial personality?

The first things usually sought by those who come to financial education courses are the methods of multiplying their money – investments. But in the game of money, this stage comes a little later. I have built a 7-step personal finance system that puts your own person in the center – you or your family, where appropriate. Here is the natural path to financial organization and prosperity:

  1. Who are you? If you do not really know your financial personality, you will try methods that do not work or, worse, cause you considerable losses.
  2. Control your expenses! Make a budget to help you properly manage the money you have right now, whether there are many or few. Anyone who does not know how to administer 1,000 lei will not know how to administer 10,000.
  3. Get rid of debt! This ballast gets to control your decisions and brings a lot of stress, especially in a relationship. There is always a solution for debt elimination.
  4. Save! Count how much money you need to protect yourself from life’s problems, big and small. Here we talk about the emergency fund and the security fund, as well as the major acquisitions. Learn how to put yourself first on your list of providers and pay yourself first.
  5. Increase your income! Starting with the skills, knowledge and resources you have right now, you can find ways to add new sources of income. With expenses under control and no debt, additional income will be a real blessing.
  6. Invest! Whoever makes the mistake of burning the steps in his haste after profit will taste the bitter aroma of financial losses. Instead, a long-term strategy to put your money to work will bring you stability, growth and freedom.
  7. Prosperity! It is that balance zone where things are under control and your money is working for you. Here we set up a new mindset, in which generosity plays an important role.

So let’s start with the beginning: WHO ARE YOU? Have you ever wondered what your financial personality is? This is the first step in building a good relationship with your money, even with your partner and children. Here are the 4 types of financial personality defined by Olivia Mellan, psychologist and author of the book Money Harmony. See which of them suits you best, because each profile requires different methods of financial organization. Especially since these profiles are native and can be extremely difficult to change over time.

SPENDER – For you, the world is a colorful and attractive place. You are the kind who enters a hypermarket to take a loaf and leave 300 lei. Instantly notice what the walkers are wearing, what blouses they have, what accessories … The lights and colors in the mall are like the red light for a playful cat. Your favorite expression is: “What a sweet thing!” Each purchase is a reason for joy, a short-lived ecstasy that must be repeated as often as possible. In fact, your body is controlled by 3 hormones, which take control and dictate your actions. This is why you sometimes wake up the next day asking yourself, “What was in my head when I bought this ?!” The first hormone is serotonin – the search for pleasure (craving for “something good”). The second is dopamine – the reward hormone (“I deserve it after a week / month / year of work”). And the third is oxytocin – the social hormone (the desire to belong to a group that pushes you to do things similar to those made by your friends). Unexpectedly, you will start to dress the same, spend your evenings and weekends in the same places, use the same gadgets and applications … as your friends.

I’m SPENDER myself, so here’s what I recommend:

• Use CASH money more often, to feel better how and when to go. When you pay with the card, you have no emotion and, statistically, you will end up spending 20-30% more than you planned or allowed.

• It’s time to make a personal or family budget. You can download it for free from financial-minimalist.com . My wife and I have been using an envelope system for 4 years, which helps us decide from the beginning of the month where our money goes. The first envelope (account) fed is the one of savings. Then there are the vital expenses, the housing, the transport, the emergency fund … It is much better to tell the money where to go, at the beginning of the month, instead of wondering where they went. Later it is too late.

• Avoid stimuli of colored advertisements and display cases, reducing the time spent on TV and shopping trips. Your mind is a hormonal roller-coaster that can’t resist them.

• Look for a balance partner (you may have it handy: husband, wife, parents, friends) that will temper your shopping enthusiasm a little.

SAVER (Tight-to-bag) – your vision is long-term, your priorities are safety and major goals over the years (as opposed to Spender, who lives the moment). You can go to the supermarket with a shopping list and in the end you only buy half of the products, because the rest are stuff you can miss. You are very aware of the effort to get your money and treat it properly, with great respect. Your energy comes from the feeling of progress and security and that is why you are immune to the temptations of the moment. Your mind, free from hormonal vapors, sees the long-term goals more easily: pensions, children’s studies, major acquisitions, plans for the future.

Here are some recommendations for you, dear SAVER:

Set a sum of money from the budget allocated for entertainment (5-10%), so as not to accumulate in time those frustrations like: “All my life, I have sacrificed for you …”, “I have never been or not -I had…”

• Allocate small amounts for donations – you can start with 20–50 $ . Generosity is a muscle to be exercised.

• Adds little flexibility to your financial rigor. Look for a balance partner that adds little color to your universe

AVOIDER (Innocent) – Your relationship with money is of “let me leave you” type. The problem is that they really leave you … for everything! You just don’t want to know how you’re feeling. You probably do not have a personal budget, you do not look at bank statements, you do not read credit agreements (except when it is too late) … However, instead of getting surprised at a moment’s notice, it would be nice to get in touch with the reality. I know the truth can be painful, but it’s preferable to chaos. This, so that you do not have in front of the ATMs such revelations: “In my word that there had to be more!” Do not deceive yourself that you can spread the fog by analyzing an account statement – this is a story about the past, which can no longer be. be changed.

Instead, dear AVOIDER, the future can be changed. Here’s how:

• Make a personal budget, however simple it may seem, to understand what income you have, ie how much financial standing you are in and how solid they are. You will understand on this occasion what the money is going for, especially if you calculate annually, multiplying the amounts by 12 months.

• Seek a balance partner, but do not delegate this activity completely, because it is important for your long-term peace of mind to understand how you are staying.

• Automates saving, through a monthly transfer banking service into a savings account. Because you alone will not come to take care of it monthly, but you will be surprised at the end of the year how much money you can collect on the unexpected. If you have no idea what 3,000 $ a month goes, then it is better not to know what only 2,800 lei goes, after automatically saving 200 $ a month.

MONK (Monk) – The beliefs of a financial “monk” are so profound that they can almost never be changed. When you think that “money is the eye of the devil” or “the root of all evil”, it is hard for you to accept the principles of this tool (which, in fact, people – either good or bad – use). If the “rich are greedy and heartless,” your subconscious is careful not to become greedy and heartless. But not all prosperous people are evil, just as not all poor people are holy.

I propose a different perspective, dear MONK:

• Money is, in fact, a reward for the value you give to others. Your work, energy, passion and knowledge are clean, so the reward doesn’t have to be dirty.

• Prosperity comes when you help as many people get what they want. If we are still dealing with ideas of a spiritual nature, we can relate to the parable of the talents or talents to be multiplied, right?

• If generosity is an important part of your vision, then you can certainly do more for others in a prosperous position.

• Look for examples of prosperous, spiritual, and generous people around you. They are, in fact, the majority involved and active, but discreet.

Once you become aware of your financial personality, you will be more efficient in managing your personal money. It will be easier for you to look for and appreciate a balance partner, who will show you things from a different perspective. It will be easier for you to understand your child or life partner.

I sincerely believe that prosperity is not given a certain amount, but it means a state of equilibrium – which can be found at 2,000 $ per month, just as it can be lost at 20,000 $ per month.

And I also believe that financial education is about life, not about money.



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David Mead 

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