Sense & Centsibility Blog

Which of the Five Money Personalities Do You Identify With?

My 10th anniversary with LSS Financial counseling is this month. Over these last 10 years I've provided counseling, supervised and observed counselors, and learned so much about personal finance. I've also come to realize that people have different money personalities. Below are 5 common money you identify with any or do you recognize someone that fits a certain category?

The Saver

The saver typically loves saving money and finding bargains. The saver works hard to spend less; not to mention they want to share their ideas with friends and family so they can save money, too. Often the saver is quite frugal, finding ways to cut costs and will generally avoid spending money. Because of this, some savers can be on the cheap side, waiting for others to pick up the tab first.

  • It's unlikely for savers to have financial problems unless there are extreme circumstances, such as a long-term job/income loss or major medical issues.
  • Savers should be aware of the fact that they may be cheap sometimes. That will help avoid relationship issues or awkwardness with friends and family. I look at it this way: when hanging out with friends and someone else always pays the bill or brings the food/beverages, just make sure you take your turn, too.

The Spender

Then there’s the spender. This type of money personality enjoys the act of spending money – either for her/himself or buying for others. The cost of the item doesn’t matter, again it’s just the actual act of spending.It’s not always a bad thing to spend, but spenders need to make sure to live within their means and be extra careful about overspending and opening and using credit cards. Spenders need to find a way to ensure they don’t overspend. Create a budget and set spending limits after paying bills and contributing to savings. For example, if you earn $3,000/month (net) and bills/savings total $2,600 then you have $400 to spend on other things the rest of the month. Once that $400 is gone, you're done spending.

  • Spenders should work to find balance and save money for emergencies and for retirement instead of spending every penny they earn. For instance, take advantage of retirement plans and employer match savings if offered.

The Security Seeker

Security seekers play it safe and are good planners. Like savers, they like saving money and their main goal is to make sure they have a safety net in case of a financial bump in the road. So they won’t touch their savings unless it’s absolutely needed.

  • Security seekers need to find balance only in the opposite way of the spender. It's okay to spend money sometimes and have a little fun.

The Risk Taker

The risk taker does exactly what it sounds like – they'll take investment risks in the hopes of a big payoff in the end. Depending on investments, this type of person can end up either rich or broke.

  • Risk takers need to remember that balance is the key. You can still take risks, but need to play it safe sometimes (like setting aside money monthly into savings)...and don't put all your eggs in one basket (diversify your investments).

The Avoider

Just as you’d expect, the avoider doesn’t think about money or finances. They're not checking bank statements closely and are not thinking about building up savings. Because of this, a financial crisis may happen if an unexpected expense comes up.

  • If the avoider has steady income, they’ll likely be fine for a long time, but need to find easy ways to make dealing with finances easier. For instance, setting up an automatic deposit into savings from every paycheck. That way, it’s easy to save and once it’s set up, there's no effort needed and you'll have money in savings in case of an emergency.

I want to make it clear that NONE of these money personality types are bad. Regardless which category you fall into, be aware of your habits and attitude toward money so you can be financially stable and prepared for the future.

Author Elaina Johannessen is a Program Director with LSS Financial Counseling.