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Know Your Money Psychology Style


We all make decisions with our money that occasionally don’t work out for the best. It’s just inevitable. But if you find this happening consistently and you’re falling into patterns of financially damaging behavior, it could be time to examine a little more closely how you make these choices.

Experts who study how people make money decisions have identified certain psychological styles for doing so. While no one’s behavior is ever completely encapsulated in a simple description, see if any of these profiles sound closer to you and if so, how that impacts what you do with your money.  Knowing your predispositions in this way can help you better manage your impulses.

The over-giver
Uses monetary gifts to express feelings and connect with people. In some cases, this person may give gifts to others and neglect their own needs.

The soothing spender
Treats money as a tool for self-medicating or the financial version of comfort food through difficult times. May make a lot of rash spending decisions that lead to negative feelings and regret later.

The status seeker
Makes money choices based on how it will appear to others and to boost their own self-esteem. Engages in “keeping up with the Jones” behavior to their own detriment.

The bargain maven
Gets a thrill out of finding discounts, whether the product is needed or not. Derives satisfaction not from having a sound financial plan in place, but the emotional boost they get from landing a deal.

The denier
Tries to avoid difficult money issues in the hope that things will “just sort of work out.”

The risk-taker
Always on the lookout for a get-rich-quick scheme like the lottery or highly speculative investments. Lacks patience and looks for shortcuts at the expense of prolonged security.

The hedonist
Sees money as a way to maximize pleasure right now instead of planning for the future.

The controller
Uses money as a way to gain control over people or their own circumstances. Sees money as a way to gain a feeling of safety.

The striver
Constantly looks for ways to improve financial standing for self and for family. May believe that with money comes power. Goal-oriented.

The victim
Financial problems are always someone else’s fault. The system is “rigged” against them.

The ultra-conservative
Is afraid of losing money and opportunities for growth are sometimes lost because of it. Maybe overly affected by events from their earlier life that cause them to not want any risk in their financial affairs.

The prudent manager
Actively saves money, looks to the future, and avoids emotional money decisions. Seeks out opportunities to expand knowledge and is realistic about strengths and weaknesses.

No one can ever expect you to be perfect, and you can never guarantee that even the most seemingly sensible decision won’t turn out for the worse.  But think about which of these styles your money decisions fall into and which category you would like to be in going forward.

If it helps, the next time you make a purchase or other money decision you end up regretting, ask yourself what emotions fed into that choice. Being able to identify these feelings will help you find better ways to deal with those situations and give you greater power over your financial life.

Another good way to remove the risks of emotional bias from important money decisions is working with your Credit Union. We work for you (not shareholders) so you can be confident our advice is in the best interests of one person only – you.  Our Financial Wellness Check is also a great resource to consider.   This is a relaxed, no-commitment review of your finances, dreams, and ambitions.   An expert can help you find easy ways to save and earn more.  And identify common but costly financial pitfalls. 

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