Your personality attribute will influence how you view and allocate your budget, regardless of whether you are very aware of it or have a careless attitude toward it. Which of the five financial personality types do you fit into? Learn about these well-researched personalities, and you might find yourself in common with one or more.
- The Investor
The type name says it all: They are individuals who enjoy taking risks and engage in frequent trading, mostly because they are confident that they will outperform the market. These people are the most aware of their financial situation and enjoy investing their money. Most of the time, they make thoughtful decisions. In accordance with the adage “Buy high and Sell low,” they are more tolerant of risk while things are going well and less tolerant of risk when things are rough.
You’re doing well, but there’s always space for development if this describes you. Keep learning, only trade with money you can afford to lose, and attempt to make decisions that will enhance your long-term financial situation.
- The Baller
These folks enjoy making social statements by driving the newest car, wearing designer clothing, or using the most recent phone model. They are the leading representatives of materialism and use money to buy love and attention.
If this describes you, try to save a little more and shop a little less. It can be difficult to break the habit of constantly buying things, but you should always consider your options carefully before making a purchase. Try to separate the items you actually need from those you just bought out of habit.
- The Ostrich
The Ostrich is a person who chooses to pretend they are blind to something in order to avoid facing it rather than setting up their finances. They don’t want to make a long-term investment; instead, they only want to rely on faith and good fortune.
If this describes you, you should try to gradually confront your money by looking at them, paying closer attention to a better saving rate, and thinking about developing your free financial plan at Nudge.
- The Saver
Risk-aversion makes the Saver reluctant to invest or even spend money. I knew a 94-year-old man who was saving half of his pension. According to research, these individuals were typically raised in low-income households.
Saving is a good thing, but I think it has its limits. Cash is not a good long-term investment, as you may know. You might locate the ideal investment strategy and the acceptable amount of risk with the aid of Nudge.
- The Debtor
Finally, there is the Debtor. Almost everyone knows a friend who will run out of money before the next pay period. They are similar to the large spender who indulges in luxury purchases to lift their spirits. They simply spend too much money and don’t make an effort to manage their budget.
Whether you are the most aware, most clueless, highly active, or very passive with your finances, it’s crucial to have a plan. Having a roadmap for your finances will help you focus on what’s important, rather than hoping your personality pre-dispositions will get you to financial success. A Nudge financial plan only takes 3 minutes to set up: HERE.