When it comes to money, a person’s personality plays a major role in their financial decision-making. Every person is unique, and that’s what makes us human, so it really shouldn’t come as a shock that there are various personality types that are more likely to have money troubles than others. It’s difficult to modify your personality traits, in particular when you’re older, so simply understanding how your personality has an effect on your financial decisions can help you make better financial decisions in the future. It’s definitely an important topic to understand, as money issues can exacerbate rapidly and you can find yourself in deep water within the blink of an eye. This article will explore 4 different personality types whom are more likely to have money troubles, together with some suggested ways to improve your financial situation if you fall under one of these personality categories.
- The Risk-Takers
Economically speaking, the higher the risk the higher the reward, but the probability of experiencing high risk success is significantly low. Some folks are born as risk-takers, others develop this personality trait in time; but most of the time, it’s the thrill of the risk that these types of folks enjoy. Statistically, the odds of financial success for the risk-takers are low, so it is crucial for these types of folks to diversify their risks to increase their chances of financial success. These folks can make high-risk investments, but they can’t put all their eggs in one basket. A blend of high-risk and low-risk investments will dramatically improve their financial future.
- The Spenders
Regardless if they’re wealthy or not, the spenders are the types of people who live life to the fullest without thinking about the financial consequences of their decision-making. Whether they’re spending money to have a good time, look good, or to simply please others, the spenders are more likely to acquire enormous amounts of debt which can take a long period of time to repay. For this reason, their likelihood of financial success are considerably inhibited. Saving money is the key to financial success, so to avoid overspending, the spenders should consider creating a budget to keep track of their spending habits and at the same time, inspect the triggers that cause them to spend their money in the first place. Facing the triggers that cause these types of people to overspend is the key to resolving the issue.
- The Ignorants
The ignorants are commonly the type of individuals that are financially uneducated and have no interest in improving their monetary skills. The ignorants may have a similar way of thinking to the risk-takers in that they want to ‘live life to the fullest’ and because of this, spend all of their money and end up in debt. It’s imperative that folks with this personality trait learn the value of money and how it can be used to provide a better future. As opposed to thinking about now, they should try to think about how spending their money now will affect their future. Take an interest in learning how to budget by reading online blogs and articles. Who knows, they might actually enjoy it?
- The Pessimists
In bleak contrast to the risk-takers, the pessimists generally pass up on opportunities to make money purely because they fear they won’t succeed. When it relates to large investments like buying a house or investing in the stock exchange, the pessimist will avoid taking any risks for fear of losing their hard-earned money. The problem with the pessimists is that by avoiding all risks, they will feel more secure, and this will impede their chances of financial growth and success. An effective solution for the pessimists is to diversify their investments in a wide-range of markets to make sure that they have a well-balanced portfolio that is low-risk and offers an opportunity for a good return.
There are certainly many other types of personalities than the ones detailed above, however these are perhaps the most common personality traits that restricts financial growth and can cause money problems. In today’s world, money is without question extremely important not only for survival, but also to be able to enjoy the only life we have. Just because you have specific personality traits doesn’t suggest that you can’t adjust some of them over time to be more financially responsible. If you need any support with your finances, or you’ve found yourself facing a mountain of debt caused by overspending, contact Bankruptcy Experts Perth on 1300 795 575 for assistance, or visit Bankruptcy Perth for more details.