How to Use Your Money Personality With Your Financial Plan
In my last blog, I talked about how to create a financial plan. Once you have a beautifully created, reasonable financial plan (aka budget), you may find that despite your best efforts, it just doesn’t work. Or it works for a while and then stops. Or you simply don’t finish it.
It isn’t the act of crafting the plan that is the problem, you are -- and I mean that in the most loving way possible! To be more accurate, the problem relates to your Money Personality™ and how it shows up when you face a money challenge. (You know... that uncomfortable spot you found yourself in right before the plan stopped being useful 😉).
So while I could absolutely dive into this topic, today’s post is not about adjusting that financial plan or tips on how to save more. Instead, I’m going to ask you to pause and take a moment to look deeper. Every person has their own unique way of thinking about, interacting with, and using money. This is called your Money Personality™ (more on that below).
This is an area I repeatedly see my colleagues in the financial industry get wrong. Business owners simply aren’t hardwired to understand numbers the same way accounting professionals are -- and for some reason, accounting pros seem to forget that! Wait, wait, wait… that’s not the rant I want to dive into today… I digress!
What I am going to share in this post comes from one of my go-to books, The 5 Money Personalities, by Scott and Bethany Palmer. There are other books out there and I have other resources I can recommend, but for today we are going to focus on this one concept.
What is Your Money Personality?
Unless you’ve read the Palmers’ book or done some other money-archetype style work before, you’ve probably never wondered what your Money Personality is. Come to think of it, you probably didn’t even know you have one! Money LOVES to be loved and celebrated, and your Money Personality influences your favorite ways to do exactly that. Once you learn what yours is, it will be that AHA! moment you’ve been looking for when it comes to your financial plan. I know this is true first hand, which is why I wanted to dive a little deeper into this concept today.
First, there is no “right” or “wrong” Money Personality. They simply are what they are. This is not the ammo you need to “blame” someone else, which includes beating yourself up over the way you manage your finances. Learning your Money Personality isn’t so you can identify a flaw... you’re not broken! If you’re like most of my clients, you simply need a little guidance and awareness… and that’s exactly what knowing your Money Personality can give you.
Second, each of the Money Personalities has strengths and challenges. Which means each of them can support us in making great financial decisions and each can potentially lead us down the path of financial trouble. (If your Money Personality were a Dungeons & Dragons character, its alignment would be “true neutral.”)
The authors of The 5 Money Personalities believe that we have a Primary Money Personality, the one that we lean into daily and drive with and make the majority of our decisions with. Read through all five and the first one that you self identify with will be your primary personality.
Our Secondary personality is a little less obvious and only shows up when we are stressed out around money. To identify this one, remember a time when stress kicked in and use the “challenges” listed below to help identify what your normal go-to was during that time.
If you want to take the test, go to themoneycouple.com. Plan on 15 minutes and they will email your results. You don’t have to take their test to know, in fact in the book they encourage you to self identify. To help you do that, I am going to summarize each personality below and then share my opinion on how to address them in your financial plan.
Mentor Moment: Have a business or life partner that is also involved in your money decisions? Ask them to take the test as well, it will help with communication and planning. After you read this you may already identify what your partner may be, but it’s important to the relationship for them to self-identify.
The Saver
Many of us may identify this personality as our grandparents who may have gone through the Great Depression. Some of these items I witnessed my budget-minded single mother do as she raised two kids with no alimony support. To be honest though, this could be any environment friendly Oregonian or cash-strapped college student. The intentionality a Saver has with money also shows up in other areas of their lives. All decisions require a lot of forethought and research. They live to make a plan and have “clear expectations about relationships, work, even their free time.”
Key patterns to look for:
Sense of pride, even a genuine high or rush, to save money on a purchase - “free beats cheap every time” even if it’s “old, broken, or useless”; it could also be the person who wears only designer labels, that they purchased “at a deep discount”
Organized, responsible and trustworthy when it comes to finances - could be a person that lives well (nice cars, homes, vacations) AND they did it all by paying cash; they won’t be the ones buying lottery tickets or tossing money into a football pool
Rarely spends impulsively - researches spending, plans out every detail, and makes sure money is on hand before spending
Avoids debt like the plague - still uses a credit card but will insist it is paid off, in full, right away
Challenges for this personality may include:
Others may say “you suck the fun out” of the spending - A Joy Stealer
Overly focused on achieving your financial goals, to the point of having anxiety around it
You may be accused of being cheap or selfish
Mentor Moment: When crafting a plan for a Saver, I use their super power to achieve their financial goals. In fact it makes them excited to see the progress! That goal then needs to be one of the top items we review. What I mentor Savers on is how to create fun around their spending and then witness their achievement and help to hold the space for celebration. A natural Saver will feel most comfortable with shorter periods of time for their financial plan.
The Natural Spender
This is my Primary Money Personality. If I have a chance to spend money, I will do it. I’ll be the first one to pick-up a check or buy something new because of some event. End caps in grocery stores or the impulse buys at check-out stands, all get my attention. So much so, that I changed my process and only do online shopping now.
A Spender is someone who has all her holiday presents purchased by May. (This could be a Saver as well, just depends on “how” it was purchased.) It’s not necessarily about having more stuff. A Spender is more likely to spend money on anyone or anything other than on herself. One could go as far to say it’s their love language. The spending doesn’t always have to be high ticket items, either. They can do as much damage at the Dollar Store - I’ve done both. Spenders get joy from this activity. They are always ready to help out, to serve others, be that with money or their time and talents.
Key patterns to look for:
Live in the moment, and willing to spend money to create great memories
Love, Love to buy things for others
Spending - regardless of where - is fun
Challenges for this personality may include:
Impulse buyers - no lists, no limits, no research, and no differentiating between a want and a desire
Can be non-communicative with others around spending choices
Unintentional spending, especially around a holiday, leaves them with regret
While they can create a budget and have every intention to follow it, their love of spending gets in the way - Budget Breaker
Mentor Moment: This is the key reason I created the debt situation I found myself in after six years of expanding my business. No plan. Living purely in the moment. A natural Spender can benefit from having accountability and regular meetings with their business advisor to review and help manage the plan. Mentoring a natural Spender can feel a bit like herding cats. Knowing what the Spender’s Secondary Personality is helps me set up the boundaries which normally makes sure they have a “mad money fund” to spend from, and being able to keep the plan fluid that includes debt reduction and increasing savings cushion to shift money habits for the future.
The Risk Taker
In business this is a serial Entrepreneur. There is a sense of adventure in everything they do - from travel plans (cheap tickets to fly tomorrow) and restaurant choices and beyond. They’re always the first to have new tech (yes they probably waited in line for that new iPhone, maybe even camped overnight). Their income is consistent and good, so their mantra becomes “why should it sit wasting away in some savings account when it can get out into the world and do something amazing or intriguing or innovative?”
Risk isn’t all positive though and a financial setback simply comes with the territory for The Risk Taker - their positive attitude knows that one day it will work out. It’s not the possible financial return on the investment that drives The Risk Taker, it is the act of taking a risk in the first place that motivates them.
Key patterns to look for:
Big-picture decision makers - far less about the details, more about the big idea and they will make a choice and take action fast
Love finding the next adventure - nothing is too out there, no risk too big, it’s all about the adventure of it all
Aren’t afraid to make decisions and let’s their gut or intuition lead
Challenges for this personality may include:
Blinded by Possibility - Once an idea takes hold, planning, other people’s feelings, all the details go out the window
Resentment can be crafted when there are other people involved
Risk Takers can lose patience with people who don’t sign on their big ideas
Mentor Moment: Risk Takers need support with keeping their revenue streams clear and a cash handling system helps create intentional use between the entities. The one problem Risk Takers often face is with their accounting team. Bookkeepers and tax pros are number focused and make decisions much slower than our quick-paced Risk Taker does. Working with the finance team on their communication skills is helpful. The Risk Taker loves their numbers but they need to be summarized and without the muck of all the details.
The Security Seeker
Predictability is key for a Security Seeker - eats at the same restaurants, vacations at the same location. Do not confuse that for boring. Nope, a Security Seeker is up for an adventure as long as they can plan for it (as in read all the brochures, get the maps, make the reservations). Security Seekers have no problem spending money, they just want to know that it is being spent or used “wisely.” They are the opposite of the Risk Taker: there is no jeopardizing their future for a single adventure. Rather they will opt to cut back on expenses to fund a splurge and that takes “planning, consistency, and clear expectations.”
Key patterns to look for:
Ultimate investigator before making any type of purchase
Very trustworthy with money, they make sure there is enough to cover their expenses before making any type of spending options which means they are unwilling to sacrifice money
Always has a plan and thus avoid major crisis
Challenges for this personality may include:
Nervous about risk and veto most spending
Get stuck in the researching phase - paralysis by analysis
The need for security can stifle all other possibilities
Mentor Moment: I don’t work with this Money Personality very often, because they already have savings and a plan. When I do, it's to support them with the “analysis paralysis” they tend to experience. Often they benefit by having someone to talk out the process with, bounce their decision off someone that isn’t emotionally attached to the spending.
The Flyer
Last but definitely not least, The Flyer. Also known as the Creative, the Artist, the Musician, and all of those that choose a “fairly unconventional life” and love it! They may move often, change jobs frequently, or gallivant around the world. They are passionate, engaged with their community, and invested in what they are doing in each moment. They go with the flow; they’re easygoing and spontaneous. The “behind the scenes” stuff, like billing their clients, depositing checks, paying bills, etc. are a bit chaotic. They feel they don’t have a “head for business” or numbers and thus, they don’t spend a great deal of time paying attention to it.
Key patterns to look for:
Content with life - as long as they are making their own decisions, it doesn’t matter how money is showing up in their life
Very happy to let someone else manage the money
Choices are not motivated by money
Challenges for this personality may include:
We all know money is an essential part of life, but since Flyers don’t think about money sooner or later it becomes an issue which means they can be reactionary, or make decisions based on fear
Money concepts are not something they have paid attention to, so when problems arise they aren’t sure how to handle them
Disorganization with money is common, so much that they won’t know if they filed their return, know where one is, or lose track of key documents
Others may think Flyers are irresponsible, which suggests they are deliberately choosing to be lazy or immature with money. However, it's simply that money doesn’t show up on their radar making them un-responsible.
Mentor Moment: Many of my early clients were Flyers. I was drawn to working with them because of their passion and ease with life. I brought the organization and the grounding they needed with business finances. Unfortunately, without a constant source of grounding The Flyer will find their way back to being disorganized. Working with Flyers is all about connecting the life they desire to live with the numbers, so you can help them with the structure to keep everything flowing in the right direction.
Did you immediately identify with one personality over another? Notice which one kicks in when you are stressed and lack thinking kicks in? Any problem identifying both? If you had any problems go to the website listed above to take the full Money Personality Profile.
Remember, this is simply the “lens through which you make money decisions” by. It’s what motivates us to wait for something to go on sale. It drives you to save upwards of 30% or more of your income into savings or investments. Ultimately, it’s why I pick up the check when I go out with friends - they all think it’s because I’m a bookkeeper by trade and figuring out the check is easy; nope, it’s because my natural Spender gets her kick when I do it! ☺
Our Money Personality influences our life and decisions. This is one tool to learn more about to help you cultivate a stronger Money Relationship. The authors of the book believe our Money Personality is part of our DNA, we were born with it. It wasn’t something we learned from how we were raised - again, it isn’t a defect, we aren’t broken. The sooner you are able to embrace it and pay attention to how it influences your life, the better equipped to handle any challenges that may arise.
Let me introduce myself - I’m Connie, and I’m a Natural Spender with my Flyer personality making an appearance when challenges arise.
I’d love to hear which Money Personality you most identified with. Let’s schedule a time for us to connect and brainstorm ways to get your Money Personality working with you instead of against you!