What’s your financial personality?

Are you a budget maker or budget breaker? Do you offer to pay for every round of drinks, or do you skip Friday drinks just to avoid spending a few hundred rand? These habits are what make up your financial personality and they can help you figure out what yours is. Read on to find out which one of these best suits you and your relationship with money.

The Cash Stasher

Your bank balance is high, and this gives you comfort.

Think: money hoarder. You are great at leaving money in the bank once that salary comes in, and you only spend on the essentials. Having savings and emergency funds for that rainy day is important to you. You rarely need financial help from your parents and being a financial liability is not an option for you.

Tip: Don’t save all your eggs in one basket… aka your savings account because the value of your savings is diminished by inflation. Chat to a financial advisor about investing some of your monthly savings in stocks or bonds. Also, treat yourself to a cup of coffee on the way to work once in a while, you deserve it!

The Big Spender

Money comes in, money goes out.

You don’t save money… why would you when there’s that new outfit to buy and that new restaurant to try? Every month there seems to be something you just have to have, even if this means you start swiping your credit card for a few non-emergency purchases.

There are often two types of Big Spenders; one that spends money on themselves or others as a way to boost their self-esteem and one who uses money as a way to feel admired, e.g. will announce at the beginning of dinner that they will be getting the bill. If you recognise these traits in yourself then it is time to stop and realise that spending money (you don’t have) won’t make you feel better in the long run. 

Tip: Take the time to work out to understand how much money you have left after fixed expenses and buying essentials like groceries, petrol and electricity, and try to put a small amount into a separate account once a month. Better yet, set up a fixed debit order so that the money is taken from your account before you even know it’s there. Start saving small and soon you’ll be hooked!

The Investor

There are two types of investor personalities – The Sage Investor and the Erratic Investor.

If you’re the Sage Investor you contribute a large portion of your income to carefully selected, prudent investments and use the remaining income to cover basic living expenses. You keep a balanced portfolio with a mix of equities, bond and cash. You know that when investing in more risky assets such as equities that this is a long-term investment to buy and hold. You’re willing to make sacrifices to build wealth.

The Erratic Investor invests his or her income without a proper structure or strategy and uses the income remaining to cover fixed expenses and day-to-day living costs. You’re curious about the options when it comes to saving your money and you want to test out the options.

Tip: How you respond to losing money can help determine what your investment personality is. For example, if the idea of losing the amount of money you are planning on investing makes you anxious then it may mean you need to find a lower-risk strategy. A financial advisor will be the best person to chat to about your investment plan.

The Ostrich

Hiding under unopened bank statements, final-notice emails and a few credit cards… The Ostrich. You would rather bury your head in the sand than organise your finances.

You prefer not to know the state of your finances and this level of avoidance often means you’re not following any sort of savings strategy or investment plan.

Tip: Living in the moment and not letting life admin get the better of you is important, but it’s time to lift your head out of the sand and face your finances. Chat to a financial advisor, your budget guru friend or do some research online about the many ways you can get your finances in order.

Which one are you?