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4 Major Financial Personalities, & How To Use Yours As A Strength

https://thefinancialdiet.com/4-major-financial-personalities-how-to-use-yours-as-a-strength/

thefinancialdiet.com

4 Major Financial Personalities, & How To Use Yours As A Strength
Whether you spend more or save more, you're probably already aware of your tendencies - but you might not have determined your financial personality. The term refers to your attitude toward money management. It's like a Myers-Briggs test for your spending strategy. So, where did these financial personality categories come from?

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“The Freedom Finder”

The freedom finders like to spend on new experiences in the pursuit of “living life to the fullest.” 

Try using a budgeting app or immediately allocating a portion of each paycheck into envelopes with designated purposes. Include a travel fund and emergency fund.

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“The Relationship Protector”

The relationship protector is often family-oriented. If they can support them emotionally and financially, it gives them their sense of achievement at having helped. 

A relationship protector is far less likely to make spontaneous investments when others depend on them, and their conservative approach to saving prepares them for retirement. 

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“The Opportunity Seeker”

They’re always looking to expand their options, and every financial decision is carefully calculated to maximize growth. 

The opportunity seeker has to watch out for taking on more risk with business initiatives or investment opportunities. Spending time with a professional to seek a second opinion can help you assess whether the newest opportunity is the best one for you. 

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“The Security Keeper”

If you track every dollar you spend, are a bit of a perfectionist, and always need to know what the plan is, this might just be your financial personality.

A security keeper focuses more on the day-to-day than future financial freedom. Seek out sound advice to help you step outside of your financial comfort zone.

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SIMILAR ARTICLES & IDEAS:

The Investor

People who invest are those who love the risk, trade frequently and have enough confidence to think they will beat the market.

A 2011 study found out that most investors u...

The Big Spender

The Big Spenders like to make social statements by having the latest car, clothes, or phones. They use the money for love and attention and are the main representatives of consumerism.

Advice: Think twice before making a purchase and try to filter the things that you really need from those bought by reflex.

The Ostrich

The Ostrich is someone who would rather bury their heads in the sand than organize their finances. 

Advice: Ostriches should try to take slowly their heads out of the sand. They should try to examine their finances, take a close look at a better saving rate and consider approaching a financial planner.

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The Golden Rules of Personal Finance

  • Spend less money than you earn
  • Always plan for the future: you should always look forward beyond the current month
  • Make your mon...

A Monthly Budget For Your Money

No matter how little or how much money you earn, creating a monthly budget is one of the most important aspects of managing your finances. What gets measured gets managed.

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The Envelope System

The Envelope system is a way to track your variable expenses like food, entertainment, and drinks.

This method, preferably used weekly, allocates a certain amount in each category in labeled envelopes (food, drinks, movies, etc.). Once the envelope is empty, you are done spending in that category.

How to Create a Good Budget

The principles that make a good budget, something you can stick to:

  • Being Realistic: Being too strict is a recipe for failure.
  • Making Adjustments: A budget is not set in stone, but a fluid thing.
  • A Team Sport: If you live with a partner or spouse, you have to agree mutually on how to budget the financials.
  • Expect the Unexpected: Keep an emergency fund, ideally 3-6 months of necessary expenses.
  • Budgeting the Expected: Certain upcoming expenses need to be budgeted in advance, like property tax, holiday shopping, etc.