William the Worrier

b&b130 How your personality affects your wallet, Part 2

Before you can even get your money stuff together, you need to understand your relationship with money, and to do that, you’ll need to know what your money personality is and how your personality affects every aspect of your finances.

We’ve spent the last two years honing and refining the money personalities we discussed all the way back in Episode 1. The 4 money personalities:
– Worrier
– Avoider
– Amasser
– Money Monk

And how each personality deals with income, budgeting, credit, debt, saving, etc. and what strategies you can use that speak directly to your relationship with money.

Take the quiz at brunchandbudget.com/personality.

Episode Highlights:

Pam: I think the Avoider as a spender is someone who really just spends. Who spends based on whim, who spends based on feelings at the time, who spends based on emotion, and not that we don’t all spend based on emotion but, because it feels so chaotic, Avoiders are kind of just cross your fingers spenders. Will the card go through? Will I be overdrafted?

Pam: With the Avoider that is the most important thing, is take away the chaos, give yourself more awareness. Take away the lack of awareness, ‘cause the thing is: the reason why you feel like it could be gone tomorrow is because you’re not sure what’s coming in, what’s coming out, and when all of those things are happening.

Pam: The Amasser as a spender also spends impulsively and spends on emotion, but they do it with confidence. They’re not like “Oh shit, I just need to do this now or it might never happen.” They’re like, “Eh, I feel like it, so I’m gonna do it and I’m just gonna make more money tomorrow.” And so the Amasser is also a bit of a willy-nilly spender, and spends based on gut and feeling like, “You know, I want this so I’m just gonna have it.” It doesn’t really come from much more than that, often. It’s just this feeling of “Yeah I want it, and I want it now.”

Pam: The main difference [between Avoiders and Amassers] is the Avoider spending because they have this fear of loss. Like, “I need to spend it now or it’s gonna be gone.” And with the Amasser, they’re like, “I’m just gonna make more money. More money’s gonna be coming in.” So they’re more casual about it. It feels less like a missing out on opportunity and more like a “I want it and I can have it ‘cause I have the money and I know more money is gonna be coming in.” There’s that, maybe it’s bravado, but there’s a level of confidence possibly bordering on arrogance that they’ll be able to afford no matter what they want.

Pam: Amassers think in terms of “I’ll just figure it out from here” and Avoiders think in terms of “Oh my god, I have not way to figuring this out, so let me just do it.”

Pam: Investing doesn’t have to mean the stock market. Investing can mean investing in real estate. It can mean investing in a business, and especially for Avoiders who are artists or freelancers or who wanna have their own business, a business is something you have to pay attention to. And the stock market and investments, what’s funny about that is it’s something that you don’t actually have to pay that much attention to.

Pam: Stocks are more risky than bonds, and so when I’m younger I can put more money in stock than bonds, and as I get older more of my money will go into bonds than stock, and that’s mostly all you need to understand to really get started, and then if you’re interested in learning more, there’s lots of ways to do that.

Dyalekt: That’s really helpful, because I think regardless of money personality, all of us have a problem with investing in that we think we don’t know enough to get started.

Pam: Before you start trying to make any changes, or make any habit change, get a clear idea of why. The first way to do that is to really figure out: What you value about money? Why is money important to you? What will having enough money give you the ability to do? and How will it make you feel to feel like, “Yes, I have enough?”

Pam: When you understand your values and why money is important to you, then it’s a matter of making change small. We’ve talked about willpower on this show before, and how much of a finite resource it is, and the thing with change is: don’t do everything at once, and don’t try and overhaul yourself. So, as you listen to this show, think about some of the qualities that you want to highlight, because, with Worriers and Avoiders, what will make you feel more safe? …That’s where you start with change.