When it relates to money, a person’s personality represents an important role in their financial decision-making. Everyone is unique, and that’s what makes us human, so it really shouldn’t come as a revelation that there are particular types of personalities that are more likely to have money issues than others. It’s hard to adjust your personality traits, particularly when you’re older, so simply understanding how your personality affects your financial decisions can help you make better financial decisions down the road. It’s undeniably an important topic to understand, as money troubles can compound rather quickly and you can end up in hot water within the blink of an eye. This blog will explore 4 different personality types whom are more likely to have money issues, in conjunction with some recommended ways to improve your financial situation if you fall into one of these personality groups.
- The Risk-Takers
Financially speaking, the higher the risk the higher the reward, but the likelihood of experiencing high risk success is substantially low. Some people are born as risk-takers, others develop this personality trait with time; but in many cases, it’s the thrill of the risk that these types of folks take pleasure in. Statistically, the probability of financial success for the risk-takers are low, so it is very important for these types of folks to diversify their risks to increase their likelihood of financial success. These individuals can make high-risk investments, but they can’t put all their eggs in one basket. A combination of high-risk and low-risk investments will noticeably improve their financial future.
- The Spenders
Whether they’re wealthy or not, the spenders are the types of folks who live life to the fullest without taking into consideration the financial repercussions of their decision-making. Whether they’re spending money to have a great time, look good, or to simply please others, the spenders are likely to incur significant amounts of debt which can take a long time to repay. As a result, their chances of financial success are significantly hindered. Saving money is the key to financial success, so to avoid overspending, the spenders should consider setting up a budget to track their spending habits and additionally, inspect the triggers that cause them to spend their money in the first place. Addressing the triggers that cause these types of people to overspend is the key to solving the issue.
- The Ignorants
The ignorants are generally the type of people that are financially uneducated and have no interest in improving their financial skills. The ignorants may have a similar mentality to the risk-takers in that they want to ‘live life to the fullest’ and as a result, spend all of their money and wind up in debt. It’s critical that people with this personality trait learn the value of money and how it can be used to provide a better future. Instead of thinking about now, they should aim to think about how spending their money now will impact their future. Take an interest in learning how to budget by reading online weblogs and articles. Who knows, they might actually enjoy it?
- The Pessimists
In stark contrast to the risk-takers, the pessimists often tend to pass up on opportunities to make money purely because they fear they won’t succeed. When it involves large investments like purchasing a house or investing in the stock exchange, the pessimist will avoid taking any risks for fear of losing their hard-earned money. The concern with the pessimists is that by avoiding all risks, they will feel more safe, and this will hinder their likelihood of financial growth and success. An effective solution for the pessimists is to diversify their investments in a wide-range of markets to make certain that they have a well-balanced portfolio that is low-risk and offers an opportunity for a good return.
There are of course many other types of personalities than the ones mentioned above, however these are likely the most common personality traits that restricts financial growth and can lead to money difficulties. In today’s world, money is without question remarkably important not only for survival, but also to be able to enjoy the only life we have. Just because you have specific personality traits doesn’t signify that you can’t alter some of them in time to be more financially responsible. If you need any support with your finances, or you’ve found yourself facing a mountain of debt caused by overspending, talk to Bankruptcy Experts Joondalup on 1300 795 575 for assistance, or visit www.bankruptcyexpertsjoondalup.com.au for additional information.