Would you call yourself a natural saver or a habitual spender? ‘Spend less than you make’ is basic financial advice, but real life is rarely that simple.
The truth is, your emotions play a key role, too. And sometimes, they can get in the way of your financial goals. But here’s the good news: by identifying what drives you to spend or save, you can improve your money habits and feel confident at the helm of your financial ship.
Find your money personality
Who are you? A Money Mentor, an Insightful Investor or an Authentic Dreamer? You can work out your money personality type here.
But Sorted’s Money Personality Quiz is just one of the many online tools available; a quick online search will return countless options. If you’re looking for ways to tame your ‘inner spender’ or give your ‘inner saver’ some slack, why not test different quizzes? It’s a few minutes well-spent.
Can you resist temptation?
Immediate reward or delayed gratification? In 2017, research from Victoria University of Wellington investigated how people deal with self-control conflicts. Participants were asked a simple question: Would you rather have $100 now or $200 in one year?
Many chose $100, even though they stated, on a separate questionnaire, that the bigger amount would make them happier.
“This tells us that we don’t always know how difficult it is to make the self-controlled choice until we’re faced with it,” PhD student Rebecca Olsen explained.
Our subconscious mind ‘talks’ to us
Our subconscious mind remains one of the most mysterious realms of all. But according to science, there are many ways for it to manifest.
Compulsive shopping, for example, has been linked to certain psychological and personality traits, like high levels of anxiety. And according to UK psychologist Dorothy Rowe, introverts and extroverts spend money differently: extroverts tend to overspend on fun activities and themselves, while introverts are more likely to overspend on their homes.
Clearly, money evokes strong emotions, which often stem from childhood. As psychologists Bradley and Ted Klontz put it, the money lessons we’ve learnt growing up form our internal ‘money script’: our core, unconscious beliefs about money.
It’s OK to have emotions: we’re humans
Yes, it’s true: emotions can hinder our long-term goals. But that is not to say that we’d be better off without emotions. We’re emotional beings, not machines. We’re humans.
The flip side is that, once you’ve identified what drives you, you can use that knowledge to get back on the right financial path. So why not let your journey of self-discovery start today?
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