Love it or hate it, there’s no escaping money.
No matter where we go or what we do, money is often a top priority for ensuring your safety and happiness. It’s easy to think of money as just a piece of paper. But the power that money has rears its head when you start to go hungry, get your power cut, or worse, end up homeless.
Maybe that’s not a problem you think about often because you live frugally, always keeping your expenses below your means. But think about the hours you spend working each day and how many days of your life you end up losing over a lifetime while trying to make money.
The way we live and experience the world around us is closely tied to money, making it crucial for us to develop a healthy relationship with it.
Personal finances come with a slew of taboos and personal hangups. But according to psychologist Olivia Mellan, we can develop healthy relationships with money, and each other, by understanding our money personality.
Learning to Think About Money
Olivia Mellan is a psychotherapist specializing in the field of money psychology. In her years of working with couples in the counseling room, she found that many of the arguments that couples had been either about or related to money. One person in the duo was too stingy for the other while the other person didn’t save enough.
To help her clients and readers address their hangups about money, Mellan came up with five money personalities that give us insight into our beliefs about neurotic behaviors about money.
The first step to finding your money personality is to think about your strengths and weaknesses. Mellan recommends making two lists of specific things about the things you like and dislike about your money life. For the first list, write down what you’re proud of like, “I make sure to save a percentage of my income each month.” The second list is for all the money things you’re ashamed of, for example, “I tend to splurge regularly.”
Writing the lists is supposed to help you find a balanced emotional baseline and make you more clear-sighted about what you’ve been great at as well as your shortcomings. It’s harder to deny that you’re in massive credit card debt if it’s on your list and equally difficult not to acknowledge that you’ve made responsible financial decisions even if everyone around you calls you stingy.
Once you’ve got your list, it’s time to look into each of the five money personalities.
The 5 Money Personality Types
1. The Hoarder
Does this sound like you?
You have a dedicated savings account for every big purchase you can think of. There are no surprises with you. You start saving for a trip to Bali as early as possible. Travel restrictions thanks to COVID-19? That’s fine. You have more time to save way more than you need for your trip. You think that there’s no such thing as enough so you squirrel away every last cent, bracing for the day that something goes wrong. You believe that money is a means to security and safety.
If that sounds like you, your money personality might be the Hoarder.
The Hoarder is a budgeting ace. While a fool and his money are easily parted, the Hoarder guards their money with the vigilance of a dragon. Hoarders rarely, if at all, make impulse purchases which is why it’s uncommon to find them in debt. Even when a Hoarder splurges, they’ll choose items that have practical value. No Gucci belts here, just a garage full of extra supplies from Costco. If a Hoarder invests, it won’t be in risky cryptocurrencies but in more modest mutual funds or bonds.
A sword has two edges and so does the Hoarder’s incessant saving habits. Your lack of appetite for risk might be what’s holding you back from making more money or switching to a more fulfilling career. This lack of flexibility can hurt you in personal ways too. Hoarders tend to forget that money represents more than just security, to people we love, money can mean allegiance or a way to show that you care. Socks for gifts may be practical but nothing about them feels personal which makes the receiver feel as if the Hoarder doesn’t pay attention. Hoarders need to be aware of the social aspects of hoarding money.
2. The Spender
Does this sound like you?
The Hoarder equates money with security. To you, though? Money means happiness. There’s nothing quite like the feeling you get when you buy a new pair of sneakers or book a trip to Cancun. Does it matter that you’re spending all of your money? As long as your bills are paid for, you’re down to spend every last cent. If you’ve had a personal tragedy as of late, like getting passed over for a promotion or a bad breakup, the more you think you deserve to max out your credit card. Who needs real therapy when you have retail therapy?
The best thing about the Spender is they understand that money is a means to an end. To Spenders, it’s not about the money but about how money can make you happy. If that means a new iPhone every year, so be it. After all, why work if you’re not going to enjoy your hard-earned cash? Spenders can also be quite generous. Their money = happiness philosophy is often extended to loved ones who they might treat to a fancy meal just to see them smile.
Spenders can take things a little too far. Remember that scene from Confessions of a Shopaholic where Isla Fisher frantically breaks an ice block with her heels to get her credit card out? Yeah. As fun-loving as the Spender is, it’s not uncommon for them to be in debt. The Spender’s problem is that they have a habit of spending more than they have and that can only be solved if they cut back on their spending habits or make more than they spend.
But just because Spenders’ impulsive financial decisions land them in debt doesn’t mean everyone in debt is a Spender. Mellan reminds us that some people just don’t make enough to live on, making payday loans and massive debt the only options for survival.
3. The Amasser
Does this sound like you?
More, more, more. There’s not enough money in the world that’s enough money to the Amasser. Amassers see money as a symbol of their self-worth, skill, and personal power. They’ve worked hard for their money and they know it. The Amasser takes pride in growing their wealth because it shows that they’re good at what they do, they know how to be functional adults, and the pursuit of money itself fills them with excitement. Amassers can look like Hoarders and Spenders because they love the feeling of power that comes with having money at their disposal. What separates these entrepreneurial go-getters from the other two groups is their core belief that money is symbolic of their self-efficacy.
Amassers are awe-inspiring people. Many of them have a great appetite for calculated risks for the promise of making more money. Unlike the Hoarder, they’re open to riskier investments that can yield massive returns. Amassers are also hard workers. They don’t mind putting themselves through hours of overtime as long as it’s paid.
Amassers can be just as much of a worrywart as their Hoarder counterparts. Their belief that money is equivalent to their skills and abilities follows them especially when there’s little money to go around. Their capacity for risk can turn against them as Amassers may bite off more than they can chew. When Amassers lose money, it’s not uncommon for them to feel like they’re a failure which can lead to feelings of depression. Amassers need to learn to be more careful and to affirm their intrinsic self-worth outside of what they make.
4. The Money Monk
Does this sound like you?
Money is the root of all evil to you. You think that money corrupts people’s morals and that anyone who gets rich is immoral. You believe in sharing money evenly with your community and you only want to support socially responsible businesses. The Money Monk and the Amasser probably hate each other, either personally or on an ideological level.
You’re socially aware and have a genuine sense of goodwill towards your community. You’re conscious of how money affects the people around you so you put your money where your mouth is and shop local to support small businesses. You identify with other people who live modestly and you wouldn’t be caught dead buying bottled water from companies known to drain the natural water supplies, leaving nothing for people who live in the area. As much as possible, you try to separate yourself from money and the pursuit of money as a way of preserving your ideals.
Your belief that money is inherently dirty prevents you from being able to live a financially stable life. It also alienates others. Many people take pride in their work and ability to make money, making them feel like you’re painting them as a one-dimensional bad guy. You also tend to be guilty about money. If you were to come by a massive windfall, like an inheritance or an insurance payout, you’re liable to feel unreasonably guilty about “selling out” to greed. Money Monks tend to forget that money is a tool and that their financial security, plus a little extra, can go a long way to supporting the causes they believe in.
5. The Avoider
Does this sound like you?
The Avoider would rather not think about money. There’s a chance that you had a hard time thinking of anything while you were making your two lists of good and bad money habits. Money just isn’t on your radar. As long as the bills get paid and you eat three square meals a day, you care little for how money can help you. You likely don’t have investments or an emergency fund but this is rarely an issue because you don’t splurge as much as the Spender either.
You are easily contented with life. Your indifference to how much money you have and make often means you are fine with the simpler things in life. You come into work, put in your eight hours, and leave. Rinse and repeat until you get your salary. You don’t over-fixate on making money or hoarding it which takes off a lot of pressure from your day-to-day life.
Your apathy towards money is just as dangerous as the Spender’s money habits. Many Avoiders don’t care to learn the basics of budgeting and as such, end up over-spending due to non-optimal financial decisions. An Avoider might not have insurance, an emergency fund, or a 401k – all essential to helping you get through tough times and enjoy a comfortable retirement.
If you’re an Avoider, it’s time to make more conscious choices about what you do with your money. While you may be comfortable today, it’s best to take some tips from the Hoarder and the Amasser. Managing your financial life isn’t as intimidating as you think it is.
If you’d like to know more about your money personality and how money psychology can help fix your financial problems, check out Money Harmony: A Road Map for Individuals and Couples by Sherry Christie and Olivia Mellan.