“Accept your shortcomings, and strive to become more conscious of who you really are.”
– Gary Vaynerchuk
These are wise words spoken by VaynerMedia CEO, Gary V, and a message that we can apply to our own behaviours when it comes to our personal finances and exploring our own money personality.
Each of us thinks and views money in different ways, and by recognizing this we can start to adopt financial strategies that suit our personality types. Outlined below are the common money personality types that I see when working with our clients.
I have included some tips for each personality type to help you ensure that your personal finances remain or get back on track.
An all-too-common money personality among expats is the ‘Spender’. This is the group that no matter how much the household income rises by, there is never any disposable income. This personality type is always concerned about long-term investments, saving for the future and not having immediate access to their capital. ‘You only live once’ is a common expression for this group, as they continue shopping and jetting off on expensive holidays.
Tips: It’s time to rein in the spending and set yourself some limits. A good starting point could be to use an app to start tracking your spending on a daily basis, so that you can see exactly where your income is going. Once you have an idea of your spending, you can start setting a budget and trimming your expenses one step at a time. This might mean reducing credit limits, getting rid of store cards and only going on two vacations each year instead of four.
The expression, ‘ignorance is bliss’ springs to mind when we think of the Avoiders. These are the people who would prefer to take each day as it comes than plan for retirement. After all, retirement is just so far away, and we can worry about that later. The Avoider typically won’t know how much is in their superannuation, their share portfolio or even their bank account in many cases.
Tips: Start focusing on taking small steps to improve your financial education. Set aside an hour or two each week to read and start keeping track of your own finances. Start by setting out your own savings strategies to achieve your financial goals. Retirement and other milestones in life are going to arrive faster than you think, start planning for them today.
The ‘Too Busy’ Type
‘I don’t have time to…’ This is the group that is too busy working to stop and starting mapping out their financial plan or seeking professional advice. They are often unaware of exactly where there money is, and for many expats, this often means a large sum of cash in the bank generating negative real rates of return, and very little else. A common goal is early retirement but too few of this personality type will spend the time to seek the right advice.
Tips: Many time poor individuals have a strong work ethic and have no desire to change this ‘busy’ nature of their working lives. It’s therefore important that you partner with the right financial planner who can design a suitable strategy for you and keep you on the right track to achieve your goals of early retirement, or whatever they may be. A trusted partner can help you continue to live your busy lifestyle, while ensuring that you’re working towards your financial goals.
This is the group that has their finances in order, knows where there funds are invested, how their portfolios are performing and regularly monitors their personal financial situation. They invest time and money in improving their own financial knowledge and literacy, but also value the expertise and experience of trusted advisers. This group is often also time poor, working in senior positions, but wants to be kept informed, in detail, of their financial and investment strategies.
Tips: It’s important for enthusiasts to partner with a trusted adviser that, at the very least, has an equivalent level of skill and expertise when it comes to personal finance. A partnership with a planner that an enthusiast can speak with regularly, review strategies and investments, and be part of the decision making process with, will provide this personality type with the peace of mind and comfort they need.
Which money personality type are you..?
By understanding ourselves, we can start to learn how we make financial decisions and formulate plans to ensure that we can achieve our financial goals.
To Your Financial Success!
Jarrad Brown is an Australian-trained and qualified Independent Fee-Based Financial Adviser with Australian Expatriate Group of Global Financial Consultants Pte Ltd providing specialist financial advice and portfolio management services to international and local professionals in Singapore.
Book a complimentary consultation here.
*Please note that Jarrad Brown is not a tax agent or accountant and none of the content outlined here should be taken as personal advice. You should consult your tax agent and financial adviser to review your current personal finances and financial goals to consider whether this strategy is appropriate for you.