Learn About Money Management Personalities & How You Can Improve Yours
Originally posted on 03/18/2013 by Thomas (TJ) Underwood
Over the past 20 plus years in the real estate and personal finance industry we have seen many consumers manage their credit and financial affairs. Although our observations are not scientific we have noticed several personality types over the years that are worth mentioning.
Below we will list 5 of the more common personality types that our office has come across over the years.
1) Strong Money Manager
Some consumers seem to be natural savers and have a keen sense for wise money management.
They pay their credit card debt in
a timely manner and rarely let the balance get to a high level. They normally
have a consistent savings plan in place and have some real sense of their
2) Struggling Money Manager
Other consumers seem to have difficulty saving, have high credit balances and struggle from paycheck to paycheck—and they lack the ability to save in a meaningful way.
They have little concern for their
financial future as they mainly live for the present or near present.
3) Decent Money Manager/Poor Credit User
Still others can save effectively, yet they run up high credit card balances—and have no real understanding of their financial future.
They may invest on a whim—and in many cases have no clue of what comprehensive financial planning is—and how it can help them attain their goals in the future in a more efficient manner.
4) Non-believing Money Manager
Others—think they can’t save, don’t want to save, don’t want to improve their finances and they seem to be willing to take whatever life seems to dish out at them—not looking for—or expecting a better future.
5) Highly Informed Money Manager
Observations of Note:
With all of the above personality types we have found that when they are all pressed to explain their credit and financial approach in detail they all have varying answers—but none seem to hit the mark as far as having a true comprehensive understanding of what they need to do in their credit and financial life.
On many occasions even the high net worth and
highly informed money manager had an inadequate emergency fund—due in large
part to not properly understanding the "purpose" of an emergency fund!
In addition, many high net worth clients did not have an umbrella insurance policy that would have more appropriately protected them and their family—from future financial risks.
If you have a money management personality type of any of those mentioned above—or a totally unique one—it is important that you realize the type of personality that you have!
We have worked with all of the personality types listed above and every type was able to transform their credit and financial situation in an effective manner.
Some who have personality type #3 listed above lack financial understanding in a meaningful way!
When they hear their favorite radio announcer, professional athlete or entertainer pitch a financial product—they jump on board in many cases.
However, in many of those cases they don’t have other areas of their credit and finances addressed appropriately.
They then invest in a stock or other
commodity with no real understanding of how it affects the other areas of their
Before you invest in a stock, mutual fund, gold and other investments—you must make sure that you have addressed your credit, insurance, taxes, emergency fund, education planning, estate planning/wills and retirement planning—in an effective and appropriate manner.
Don’t do like many who invest in a haphazard manner! You must address all areas of your finances in a comprehensive manner—and then you will be in position to invest properly!
Do not do like many and put the cart before the horse—by not understanding the right way to invest!
If you choose to invest without addressing all areas of your finances you may be successful if your investment grows at the right rate.
However, realize that it is a dangerous strategy—even though we have seen it done successfully by many consumers.
If you decide to invest after you hear a convincing sales promotion that really impresses your heart and mind and you truly feel that investment plan is for you—you must stop—pause—and run through your mind—have I really addressed all areas of my finances?
We feel that addressing all areas of your finances in a comprehensive manner and then investing—is a wiser strategy—if you want to achieve financial success at a high level on a consistent basis.
Regardless of your personality type—you can put a plan in place that can lead to a prosperous future for you and your family!
With the right approach and the right systems in place you can improve your and your family’s credit and finances to a high level.
You must "always" remember that many who struggle financially do so because of a poor—or non-existent money management system!
You have the personality to transform your future into a more prosperous and productive one—if you have the desire to make it happen!