We’re heading towards that expensive time of year! Amazing ‘deals’ encouraging us to spend, spend, spend, the rounds of Christmas parties and then Christmas itself, with presents and entertaining. Have you ever wondered why some people always get sucked in to spending a lot at this time of year whilst others manage to keep themselves in check? Why some people aren’t fazed by the excess and for others it causes sleepless nights? A lot of it comes down to our underlying money personality…
How we view money is different for each of us. It’s ability to enhance our lives and feeling of self-worth is something very personal. We all have a certain attitude towards money that affects how we interact with our finances. Everyone’s so-called ‘money personality’ is made up of a combination of eight different money types, some of which will be more dominant than others.
Some people are naturally drawn towards a desire to accumulate money; they enjoy planning and the feelings of security about the future that having savings affords. Some view money as a means to enjoy life in the here and now; they indulge in material things and experiences, often at the expense of their future self. For others, money is a tool to facilitate making connections and building relationships, which are more important than the money itself. Others still value money as a tool to achieve the status, image and recognition they crave.
Money, money, money
Most things in life involve money; the experiences we enjoy, where and how we work, how we interact with friends, our relationships, what we choose to do with our free time, what we buy, what we wear, what we eat, how we travel.
Especially at this time of year, where consumption of experiences and material ‘things’ is higher than normal.
Every single one of these opportunities that come in to our world is being filtered through the lens of our unique money personality. How we maximise those opportunities requires us to draw on our strengths and identify any elements of our personality which could lead to self-sabotage.
Whilst there is no one ‘best’ overall personality, ultimately, it’s a question of whether the mix of your individual traits is making you feel content in life. You might need to step back and look at your bigger picture life goals:
Do you want to be debt-free?
Do you want to stop always trying to ‘keep up with the Joneses’ and the anxiety it causes?
Do you want to stop relying on others for financial support?
Do you aspire to buy a home/ invest/ put your children through university?
Do you want to be able to retire early?
Do you want to stop feeling resentful because your generosity is never reciprocated or acknowledged in the way you would like?
Do you want to stop living above your means and start saving some money?
When you’ve answered those questions, it becomes important to acknowledge where your habits and behaviours, driven by your personality, are incompatible with achieving those goals. With awareness comes the ability to make positive changes…
Surviving the spending season when your dominant money type is out of alignment with your life goals
1. Spontaneous spending
When you have money, is your first thought what you could do with that money right now?
For those who have a tendency to spend spontaneously, and who often overspend as a consequence, frequently there are underlying emotional reasons for their spontaneity. Starting to keep a spending journal is a great way to monitor the feelings and reactions you have around different types of spending, and uncover some of these emotional triggers. As you keep a note of your spending, also ask yourself:
Is there a particular friend or group of friends which you always overspend when you are with?
Do you find that you shop online more when you are home alone and bored?
Can you not resist the sales emails when they hit your inbox?
Do you find it difficult to resist a splurge when your wages just hit your account?
You’ll be able to identify patterns of behaviour and make changes to avoid falling into that instinctive, habitual behaviour. Just the simple act of keeping a written diary of your spending is often sufficient to make you question your actions, and quickly results in a reduction in the amount and frequency of spending.
Top tip: Make a list of alternative activities to shopping and spending which you can enjoy, and do them with other people to keep you accountable.
Does your generosity towards others frequently leave you with feelings of frustration or resentment that your generosity isn’t always reciprocated? Do you find that your generous nature leaves you either with less for yourself, or in debt?
Draw up a list of your own needs and wants for the year ahead and make these a priority before you plan what you’re going to spend on others. Putting pen to paper and giving life to your goals for the short-term shifts your focus and allows you to create positive boundaries and balance; putting yourself first, then treating others.
Top tip: As an alternative to giving financially, look for opportunities to give your time which meet your need for acknowledgement.
3. Carefree about money
Do you not pay enough attention to the money being spent at this time of year…..until the credit card bill hits in January when you get a sudden dose of reality which scares you?
Use a spending plan to give every pound of income a job; allocate all your necessary expenses, wants and needs and be clear how much you have for each. If you become tempted by the ease of spending on your credit card, use the envelope system. This involves dividing your full allowance into various categories, allocating the cash to each category and allowing yourself to only spend the money you’ve allocated for any particular category. Once it’s gone, it’s gone.
Top tip: Make it easier to pay attention to your finances by linking your bank account to a budgeting tool such as the Emma app; you get notifications when you’re spending too much in comparison to previous months and when you’re looking as if you will run out of money before payday.
Do you live below your means? Is it painful to see your bank balance going down instead of up? Do you just see commercialisation and needless spending all around you?
If you live a frugal life, living within your means comes easily. However, ask yourself if saying ‘no’ to things is a habit. What are those habits keeping you from doing or having? What might you be missing out on?
Top tip: Reassess your budget to enable you to react to opportunities; you may miss out on some great deals and savings at this time of year when the retailers are trying their hardest to get us to open our wallets. Allow yourself some flexibility to take advantage of these; ultimately you could benefit in the long run.
5. Look at me
Do you want to stand out from the crowd? Does creating a good impression mean having the latest gadgets and clothes? Do you project an image of wealth which doesn’t necessarily match your bank balance?
Make a gift list and stick to it. If you’re shopping for a gift and find it discounted, acknowledge to yourself that you don’t need to buy something else to bring the amount you’ve spent up to what you had allocated to spend. You’ll be appreciated for the gift you have given, not for the amount you spend.
Top tip: Shopping online can help you to avoid the impulsive spending which can result from being in an environment with sales assistants and others who you are driven to impress.
As with any personality test and assessment tool, the underlying objective of uncovering your money personality is self-awareness, personal understanding and a sense of emotional intelligence. It helps us understand what we like, don’t like, what we are good at and where our challenges lie. To find out more about your own money personality, head here to take the money personality assessment.
Emma Maslin is a certified Financial Coach and Mentor, Financial Wellness Speaker and Founder of multi award-winning personal finance education website The Money Whisperer. A former Chartered Accountant, Emma believes financial health and wellbeing isn’t a luxury just for the wealthy; it’s a basic need for all of us.