Personal Finance Personality Types

2006-08-17

Psychologists classify people and their personal finance habits into several financial personality types. A personal financial type is the end result of how you apply (or don’t apply) personal finance tools in their lives.

Here are a personal finance personality types:

He Who Owns the Most Toys Wins
This is the person who buys all the latest gadgets, newest fashions, most expensive car, etc. You get the picture. Some people can afford to have these things. There’s nothing wrong with owning them. The problem is that some people can’t afford to live this way but yet they still try to. They end up using credit to maintain their overextended standard of living and end up putting themselves in a situation where they are living paycheck to paycheck and borrowing from Peter to pay Paul. Now don’t get me wrong, I’m not saying it not good to own nice things, but you need to be realistic about your financial situation. It’s ok to buy these items, but do so after your debts are paid off and you can pay cash for the items. Don’t burden yourself with unnecessary debt.

I pay My Bills Once a Month
I hear it ll the time, “I sit down and pay all my bills once a month.” This type is called the Check Writer. These types have a sense of responsibility and do pay there bills on time. They discuss money and their persona finances with their spouse. They are on the right track. But here in lies the problem. They only do it once a month. They write a few checks to pay bills, and then wait for next month to come around. If they end up with too much month and not enough money one month, they simply pay what they can and wait for next month to roll around.

Check writers generally spend everything they have each month and live month to month. They are less prone to excessive spending then the Most Toys type. They have a general knowledge of what things cost, but have no real long-term plan in place. They will likely accumulate high debts an have a negative net worth. The Check Writer will drive all the way across town to save money at the grocery store that has the big sale this week, then blow the savings on magazines or other items at the checkout register.

Continue to Part 2

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» Personal Finance Basics

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