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You Have A Money Personality — Learning Yours May Help Your Spending Habits

Talking about money benefits all of us — and we need to do it more. Join the conversation with Worth More, our 2024 guide to better finances, from navigating savings, debt, and relationships to negotiating pay raises and, above all, investing in yourself.
We all have pain points when it comes to our finances and we all have different ways of dealing with them. But there’s something about knowing where you stand with your money, and why you behave in the way you do, that makes it easier to sort through what you need to do. Believe it or not, we all have our own money personality — and that personality can shift depending on time and circumstance. When spring starts stirring, I can switch from being a careful saver to someone who wants to go outside, see the daffodils, and spend, spend, spend. 
The concept of money personalities was co-developed by financial psychologists Dr. Brad Klontz and Ted Klontz. Ken Honda, author of 2020’s Happy Money: The Japanese Art of Making Peace with Your Money later coined seven personality types. In my opinion, there are five main money personalities (excluding The Saver-Splurger and The Indifferent-to-Money) that many of us fall into. Each of these personalities — The Saver, The Spender, The Investor, The Risk Taker, and The Planner — carries its unique traits, strengths, and challenges. Knowing your money personality allows you to create strategies that resonate with your natural financial inclinations. While it is by no means a substitute for professional financial advice, it will ultimately help you to manage your money in a better way. 
Talking about money is still pretty taboo in most social situations (it’s the reason Refinery29 launched Money Diaries, after all). And yet, how we manage our money day to day can really influence how we interact with others in financial contexts, whether it be with a partner, family, or friends. Imagine a risk-taking partner telling you about a get-rich-quick scheme. If you’re a careful saver you could react with horror. Recognizing your persona, as well as your friends and family's personas, can foster understanding and empathy, leading to healthier financial relationships and decisions made in unison. 
Understanding your money personality can also help your wellbeing by alleviating the stress and anxiety associated with financial decisions. Work with yourself, rather than against yourself. 
Which of the following money personalities resonates with you?

The Saver

Ah, the Saver — the creator of safety nets. If you’re a Saver, you probably check in with your bank account more than your best friend. You’re the one who diligently stashes away a portion of your income, come rain or shine. Your strengths? A robust safety cushion and the ability to resist impulsive purchases. However, your challenge lies in sometimes missing out on potential investment opportunities and you could miss out on experiences that could bring you joy, social connection, and leave you with good memories. Remember, a little adventure can sometimes lead to great rewards.
What are their strengths: Cars, holidays, weddings, and houses are all within the Saver’s reach because of their conservative approach to money. The Saver is likely to have an emergency fund and a retirement plan. Their steady approach leads to financial safety. 
Their challenge: The conservative approach of the Saver can mean that they don’t actually make the most of their money. They can miss out on higher returns from investments due to their risk-averse nature. This cautious approach might mean they miss the opportunities for financial growth that a balanced investment portfolio can offer.

Financial advice they need for 2024: Explore investment options that align with your risk tolerance. Start by thinking about investing in an index or mutual fund (make sure you consult a financial planner and/or do your own research, before investing). Additionally, make sure your savings account is a high-yield savings account so you are getting a higher return on your savings. Popular websites like Ellevest and NerdWallet are great places to find out more information. Find your balance between saving and investing, we don’t want to just put our money away, we want to make sure it grows too.

The Spender

Next up, the Spender: the life of the financial party and often the real-life party too. Everyone wants to be around them. Spenders are all about living in the moment and enjoying the fruits of their labor. After all, you can’t take it with you! Your strength is in celebrating life and not shying away from enjoying your hard-earned money. However, the pitfall here is the risk of financial instability. Often, overspending is triggered by emotions — be it stress, happiness, or even boredom (been there). Understanding these triggers can help with developing healthier spending habits. Try to adopt mindful spending, which involves pausing and thinking about each purchase. Ask yourself, “Do I really need this?” And then push those self-imposed questions further, “Yes, I want it, but do I want it more than an uncluttered house? Do I want it more than I want to stop lying awake at 3 a.m. worrying about my financial future? Do I want it more than I want to live an environmentally conscious life?” This practice can help in differentiating between wants and needs.

The key is balance — enjoy your present but don’t forget to give a nod to your future self.
What are their strengths: The Spender’s primary strength comes in the form of enjoying their hard-earned money. They’re not afraid to indulge in life’s pleasures. They’re also likely to be generous with friends and family and may have created a strong social safety net, if not a financial one. 
Their challenge: They may run the risk of financial instability due to overspending. This can stem from emotional triggers such as stress, happiness, or boredom. Recognizing these triggers can be crucial in helping them develop healthier spending habits. The Spender could start by keeping a money diary, tracking both what they’ve spent and — crucially — how that made them feel both before and after spending. From there, they can look into further actions that cause them to think before spending. Getting rid of services that promise free or instant delivery could be one way to start. Removing card details from websites could be another: There’s more time to consider a purchase if you have to find a credit card and manually type in the details every time. 
Financial advice they need for 2024: The Spender should focus on mindful spending. Asking critical questions like, “Will this bring me long-term satisfaction?” can help them distinguish between wants and needs.

The Investor

The Investor is the financial world’s visionary. If this is you, you’re always on the lookout for growth opportunities. Your money isn’t just sitting; it’s working and you’re proud of that. The Investor’s plan is to build wealth over time. However, the challenge is the inherent risk associated with investments. The mantra for you is “make informed decisions,” and, as the terms and conditions on investment products always say, “know that your capital is at risk,” so research well and diversify your investments.
What are their strengths: The Investor makes money work for them by having a portfolio of different assets: cash in high-interest accounts, bonds, shares in companies that come with dividend payments, property, etc. This proactive approach means that you never depend solely on one source of income. You have a long-term perspective, and you get that true financial growth often requires patience, persistence, and planning.
Their challenge: Investments of any kind always come with some level of risk, but you accept that market volatility happens from time to time but you stay optimistic about early retirement. The Investor in 2024 should review their investments as well as their investment strategy. Wondering where to start? Start by measuring your investments against relevant benchmarks like stock indexes, yields for bonds, and the capital appreciation of the property value since it was purchased. Staying informed about market trends and seeking professional advice when necessary can be pivotal in making wise long-term investment choices.
Their financial plans for 2024: Seizing growth opportunities may include exploring emerging markets and sustainable investments. A quick search on the Financial Times website with “emerging market investing” is a great way to research what countries are showing promise of economic reform. Additionally, don't be afraid to invest in a financial planner to make sure you are making the best decisions for you (make sure you consult a financial planner and/or do your own research). 

The Risk-Taker

You’re not afraid to take the road less traveled in terms of your finances and — probably — the rest of your life. High-risk, high-reward situations are your playground. You have the potential to make significant financial gains. But with great potential comes great risk. The challenge is to ensure that your moves are calculated and not just a financial game of Russian roulette. With new “get rich quick” schemes popping up frequently, ensure you don’t fall prey to them and check that your money is protected in the event of unfortunate circumstances. Check the terms and conditions of any investment you make. It’s always a good sign if they are regulated by the Securities and Exchange Commission (SEC) and look for FDIC coverage which provides investors with a safety net of up to $250,000. 
What are their strengths: Their strength lies in the potential for significant financial gains. The Risk Taker is comfortable living life on the edge and thrives in environments where others see volatility, seeing opportunities for substantial returns where others see risk. Their willingness to venture into less traditional investments can lead to impressive financial outcomes such as investing in Real Estate Investment Trusts (REITs), peer-to-peer lending as well as investing in art and antiques. A peculiar portrait today could turn into great profits tomorrow (well, in 10 or 20 years, but you get my drift).
Their challenge: The main challenge for Risk Takers is ensuring that their risk-taking is calculated and not reckless. The Risk Taker must be vigilant against “get rich quick” schemes such as pyramid and Ponzi schemes. The vibe is, if it’s too good to be true, it probably is. 
Financial advice they need for 2024: Balance bold financial moves with strategic planning. This means doing thorough research, seeking professional advice, having a well-funded emergency fund, and not putting all your eggs in one basket. Diversifying investments can help mitigate risks while still allowing for the pursuit, and the thrill, of high-reward opportunities. Just like spreading your shopping spree across different stores instead of one, you could put your money in various places like stocks, businesses, bonds, and maybe even some property. 
Their financial plans for 2024: The Risk Taker’s financial plan for 2024 should involve a mix of high- and moderate-risk investments. This might include exploring things like innovative tech startups. The key is to manage risk without dampening their adventurous financial spirit.

The Planner

Finally, we have the Planner — the strategist of the financial spectrum. If this personality resonates with you, you’re all about goals, budgets, and forecasts. Your strength lies in meticulous financial planning and preparedness for different scenarios such as getting married, buying a home, having a child, going back to study, or job loss. However, remember that life is unpredictable and that sometimes flexibility can be as important as a well-laid plan.
What are their strengths: Planners, your strength lies in your meticulous financial preparedness. You excel in creating detailed budgets and financial plans that cater to your current needs and future aspirations. Every subscription, food shop, weekend getaway, and home cost stays on your spreadsheet. This thorough approach provides a clear roadmap on how you’ll achieve your financial goals and ensures readiness for various life events.
Their challenge: The Planner’s challenge is the unpredictability of life. While being prepared is a strength, excessive rigidity in financial planning can lead to missed opportunities or difficulties adapting to unexpected changes. Flexibility is sometimes as crucial as a well-laid plan, and Planners might need to embrace flexibility in their financial strategies for 2024. While it’s essential to be disciplined with goals and budgets, being open to adjusting plans as circumstances change can be beneficial. This might involve revisiting financial goals, adapting investment strategies, or reallocating resources in a better place.
Their financial plans for 2024: The Planner’s financial plan for 2024 will likely involve a balanced approach to saving and investing could have a focus on achieving specific life goals. This could include setting up funds for major events, using products like a Roth IRA or 401(k) and adjusting investment strategies to align with changing goals or market conditions (like mortgage rates). Keep an eye on personal finance news so that you get a warning of potential changes and then research to make sure you have the product that best fits your needs. 
Understanding your money personality is more than a fun exercise; it’s a crucial step towards financial empowerment. 
In the end, your money personality isn’t just about managing your finances; it’s about understanding yourself. Embrace your financial identity, and let it guide you towards a future where your wealth isn’t just measured in numbers, but in the richness of your financial wisdom and wellbeing.
Bola Sol is a finance expert and author of How To Save It: Fix Your Finances.

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