Episode #42- Your Money Personality and How it Influences Your Decisions

Wealth Decisions Podcast Transcript for Episode #42:Your Money Personality and How it Influences Your Decisions

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Welcome to The Wealth Decisions Podcast, where each week I take 15 minutes or less to discuss Crucial Wealth Decisions and Mindset Hacks to help you live a richer life.

I'm your host, Brian Muller, and I've been in the financial services industry for over 25 years.

I'm also a certified life and health coach.

I have a passion for helping people make better decisions around their money, and their life.

So for the sake of time, let's dive right into it.

Well, hey there, Wealth Builders, this is Brian Muller.

We're going to be diving into a topic that affects every financial decision you make, your money personality.

And understanding your relationship with money is crucial for making sound financial decisions and achieving the goals that are most important to you.

So we're going to explore some of the different money personalities and how they can impact your wealth decisions.

So first of all, what is a money personality?

A money personality is a set of attitudes, beliefs, and behaviors really that about money.

It's shaped by your upbringing, your experiences and your values.

And just like your regular personality influences kind of how you interact with the people you know or the people you don't know, your money personality influences how you interact with your finances.

So understanding your money personality can help you make better financial decisions, can maybe reduce money-related stress, can even improve your relationships, especially when it comes to financial matters.

And it also helps you set realistic goals.

We're going to talk about the five main money personalities.

We're going to talk about the characteristics, maybe some examples, and give some of the strengths and challenges and growth opportunities for each one.

So number one, let's talk about the saver.

The characteristics of a saver is someone who's generally risk-averse and conservative with money.

They find security in having a substantial amount of savings.

They often experience some anxiety about spending, and they tend to research extensively before making purchases.

They also value financial stability above immediate gratification.

Let's just give a kind of a real-world example.

Julie is age 32.

She automatically saves 25% of her income and lives well below her means.

She clips coupons despite making a good income, and she drives a 10-year-old car that's paid off rather than buying new.

She tends to feel anxious when her emergency account fund drops below 12 months of expenses.

She always waits for sales before making purchases, and she tracks every dollar in a detailed spreadsheet.

If this sounds like you, you might be a saver.

The strengths of a saver is they're really good at building emergency funds.

They rarely face debt problems.

They're pretty well prepared for retirement.

They're good at finding deals.

They're a natural budgeter, and they often have really good credit scores.

But the challenges of a saver is they may miss out on life experiences due to the reluctance to spend.

They could lose purchasing power by keeping too much in cash and conservative investments.

They might experience anxiety about normal expenses.

And they can create tension in relationships when they're with someone with a different money personality.

The growth opportunities of a saver, though, is learning to balance saving with enjoying life.

Maybe exploring some controlled risk through a diversified portfolio.

Rather than having so much in conservative investments, they could develop a diversified mix that is right for their risk tolerance.

And also, they could develop some comfort, maybe with necessary expenses that is part of life.

And they could also try to find a way to set up a fund money budget for maybe guilt-free spending.

Now, let's talk about personality number two, and that's the spender.

This is someone that lives in the present moment.

They value experiences and material goods.

They tend to make quick purchasing decisions.

They're emotionally driven with money.

They're sometimes generous with others, and they derive just a lot of joy using money rather than saving it.

And let's just look at a real world example.

Mike, he's 28 years old.

He loves trying new restaurants, and he never misses a concert.

He always buys the latest iPhone on release day.

He's very generous with friends, and often picking up the tab rather than the saver might be the one with alligator arms, and doesn't pick up the tab.

He has a closet full of barely worn designer clothes.

Sounds a little bit like me.

I have one of my things on my agenda is to clean out my closet.

He also kind of books spontaneous things, maybe weekend trips, and sometimes uses shopping as a mood booster.

The strengths of a spender is they're good at using money to create happiness.

They're often have a lot of rich life experiences.

They're skilled really at gift giving, and they create memorable moments.

And they're fairly adaptable with their finances, and are usually the life of the party, and enjoy creating experiences with their good friends.

The challenges of a spender though is they have difficulty saving for long term goals.

They typically carry credit card debt.

They struggle with impulse purchases and often live paycheck to paycheck.

They might not have adequate emergency savings and can face maybe some retirement planning difficulties.

So some growth opportunities for someone that may be as a spender.

If this is a description that you identify to, try to implement some type of 24-hour rule for purchases.

Set up some automated savings.

Create a fund fund with boundaries, and learn to find joy in saving and building your net worth.

And develop some type of delayed gratification skill would be some of the growth opportunities for a spender.

Now let's talk about the third money personality, and that's the risk taker.

This is someone that's comfortable with financial uncertainty.

They get excited about new investment opportunities.

They're willing to take chances.

These risk takers are often entrepreneurial and they value potential returns over security.

And they tend to make quick decisions with their money.

Let's talk about a real world example.

James, he's age 35.

He left his corporate job to start a business.

He has a diverse cryptocurrency portfolio, and he's investing in startup companies.

He takes out loans to invest in real estate.

And he's willing to invest in emerging markets and small caps and more growth opportunities.

Some of the strengths of a risk taker is they can get potentially higher returns.

They're good at spotting opportunities.

They're comfortable with the market's ups and downs.

They often build multiple income streams.

And they're kind of adaptable to changing markets.

But the challenges of a risk taker is they might take unnecessary risks or buy penny stocks or the stock of the day and they can face more significant losses.

And they also might neglect just basic financial security.

They might not have enough in emergency accounts.

And they sometimes become a little overconfident in their abilities when they make a winning investment.

And they can be really impulsive and may not diversify enough or be overweighted in something like technology.

A growth opportunity for a risk taker is just learning to balance risk with some security and develop a stronger foundation of diversified investments before they take on too much risk by investing in the stocks of the day, momentum stocks or storage stocks.

And they could create just some risk management strategies and understand that diversification is truly the most important thing first.

And also, a risk taker could build up an emergency reserve account.

The fourth one is the security seeker.

This is very similar to the saver, but they're very detail-oriented with their finances.

They value stability and predictability.

They prefer guaranteed returns.

They're definitely more of a research-driven decision maker.

They're going to look for all the information available to make a decision.

They take a more conservative investment approach, but they do focus on the long-term and financial planning.

So let's look at a real-world example.

Linda, she's 45.

She works in a stable government job.

She maintains a detailed retirement spreadsheet.

She prefers bonds and CDs over stocks.

She has multiple insurance policies, and she reviews her budget on a monthly basis.

She always has some type of financial backup plan.

And the strengths of a security seeker is they're really good at long-term planning.

They rarely face financial emergencies.

They're good at maintaining their finances, and they're detail-oriented with the budget, and they have consistent savings habits.

But the challenge is they may be too conservative with their investments, and they could miss growth opportunities.

They might over-insure.

They can be inflexible with financial plans, and they may worry excessively about money like a saver does.

Some growth opportunities is just learning to take some calculated risks, explore some growth investments with part of their portfolio, finding balance between security and opportunity, and understand the opportunity costs of being overly cautious in terms of their long-term financial plan.

The fifth money personality is the flyer.

They're very optimistic about their finances.

They're flexible with money situations.

They believe things will just work out.

They take a very casual approach to financial planning.

They value freedom over security, and they're really pretty adaptable when it comes to financial changes.

Let's just look at a real-world example of a flyer.

You know, David is 29.

He's a freelance designer, has very irregular income, but he remains confident.

He doesn't worry much about financial planning.

He takes financial opportunities as they come.

He's very comfortable with debt and spends and saves based on his current situation.

Some of the strengths of this type of money personality is they're very adaptable to financial changes.

They don't have a lot of money stress.

They're good at finding creative solutions and they're flexible.

They're resilient to setbacks and they're very comfortable with uncertainty.

But some of the challenges is they may lack long term financial planning.

They could face some retirement difficulties.

They may not have adequate savings and sometimes miss important deadlines.

They can be way too optimistic about money and may not prepare for emergencies.

So some growth opportunities for this type of money personality, the flyer is develop some type of basic financial plan, create some simple savings habits, learn some different investment strategies, build an emergency fund and set some long term goals.

So when you heard all these money personalities, which one resonated with you the most?

Which one sounded like you?

And what do you do from here?

If you're a certain money personality, maybe you're a risk taker, maybe you're a flyer, maybe you're a security seeker, but identify your dominant money personality.

And you probably have a secondary money personality as well.

You know some of the specific strengths and weaknesses that we went over.

I gave you some examples to help you identify which money personality you are.

But think about some personal growth goals and develop some strategies to maybe overcome some of the challenges.

And track your progress on a regular basis and seek professional guidance.

There's no perfect money personality.

The key is really understanding yourself and make informed decisions that align with your values and goals.

I think the key is to have a blend of these different money personalities for different goals.

We can't necessarily change who we are and who we are is shaped by past circumstances or experiences or even our family.

But have a combination of these money personalities for different goals.

Next week, we're going to be talking about goals-based investing and the bucket approach.

For short-term goals, it's great to be a saver or a security seeker.

You can be conservative with investments for those short-term goals and create some type of emergency account.

For your intermediate goals, it's okay to be maybe a flyer or a spender but not a risk-taker.

When it comes to long-term goals, it's okay to take some risks and live in the moment and be flexible with money, but you need to have a financial plan and have different goals for different periods of time and that requires you to take a different approach with your long-term money than you would with your short-term money.

So it's okay to blend these and it's going to help you become a much savvier wealth builder over time and reach all of your most important goals.

So that's it for today's episode, your money personality and how it affects your financial decisions.

Tune in next week and we're going to be talking about goals-based investing and the bucket approach.

And if you like this episode, please rate the episode, make some comments and hit the notification bell to get updated on future Wealth Decision Podcasts.

And please, if you could, share it with a family member or a friend.

My goal with the Wealth Decisions Podcast is to reach over 100,000 people by the end of the year in the Twin Cities and beyond so that people can make better wealth decisions to live a richer life.

If you like to schedule a discovery call with me, you can go to my website at momentouswealthadvisors.com and I'll spend some time to get to know you a little bit and find out if I might be able to steer you in the right direction or help you with your financial future.

Once again, thanks for listening.

Have a great weekend.


Listen to this episode on Apple Podcasts or Spotify


-Brian D. Muller, AAMS® Founder, Wealth Advisor

Momentous Wealth Advisors in a fee-only fiduciary advisory firm

Disclaimer: This material is for informational purposes only and should not be construed as investment advice. Past performance is not indicative of future results. Investors should make investment decisions based on their unique investment objectives and financial situation. While the information is believed to be accurate, it is not guaranteed and is subject to change without notice.

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