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.
We all spend, save, and invest differently. That's because we're all inherently different people with different personalities. Knowing your financial personality can help you make a plan to spend more responsibly and come up with a budget that works for you. Today, we've come up with four different personality types.
Being a Frugal Saver means all your money is going towards saving.
How you can improve:
Oversaving won’t make you happy. Spend responsibly.
If you’re not saving, you may also not be investing. Investing allows you to grow your money over time.
Investing doesn’t have to be all about stocks and bonds, you can invest with just a few cents thanks to apps, or you can invest through Robo-advisors who do nearly all the work for you.
Whether you are highly aware of its influence in your daily activities, or you have a nonchalant attitude towards it, money plays a huge role in our lives. As your personality traits substantially affect how you perceive and allocate your budget, scientists described 5 financial personality types.
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 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.
The Richest Man in Babylon, by George S. Clason. The message of this 1926 book is that rich people are rich because they save their money and don't get into debt.
Your Money or Your Life, by Vicki Robin and Joe Dominguez. This book will change your relationship with money.
The Little Book of Common Sense Investing, by Jack Bogle. This book is about index funds. Jack Bogle founded Vanguard and created index funds.
Consider where you find yourself as each phase requires a different strategy.
From nothing to something. This is where you live from paycheck to paycheck without any savings. Try to build a financial buffer of at least one month of expenses.
Gaining traction. Once you've saved at least one month of expenses, aim for saving six months of expenses.
Peace of mind. Put your money in a savings account and don't touch it. Everything else you save from now on is meant for investing.
Financial freedom. This is the stage where you have enough cash and investments to cover your cost of living.