Managing your finances is a complicated process, and one that requires a thorough understanding of who you are and how you spend.
These characteristics may not seem as important as the nuts and bolts of basic budgeting, but in reality, play an enormous role in any successful attempt to save money.
So, how can you break down your habits into a more easily digestible definition? One way is by taking a bit of time to work out what type of 'financial personality' you have. This isn't as complex as it sounds, and to help you get started, we've outlined four of the most common categories below.
1. The hoarder.
Hoarders are acutely aware of their financial circumstances and do all they can to ensure not a single dollar goes to waste. Regardless of whether that means obsessively turning off lights and power switches or constantly monitoring their bank accounts, this financial personality type lends itself well to saving.
Even so, there can be a tendency for hoarders to avoid investment opportunities due to their risk-averse and cautious nature.
2. The investor.
On the other side of the coin to the hoarder is the investor. These personality types are always looking for a new way to make their money work for them, which could mean investing in a term deposit or a much more significant outlay, such as purchasing an investment property.
Investors can have varying levels of risk tolerance so it’s important that they invest in a product that is suitable for them.
3. The debtor.
The debtor is an increasingly common financial personality type in Australia, with credit cards and online banking technology making it easier than ever to rack up debt without realising. As a debtor may not even realise how much they owe, or the consequences of not paying off bills in full each and every month.
Aside from getting out of debt, one way for debtors to improve their savings habits is by spending some time working out where their money goes and what can be done to minimise expenses.
4. The spender.
Last but certainly not least we have the spender. This personality type covers a broad spectrum, from shopping addicts who can't afford to spend like they do all the way through to those who can afford to splurge on big ticket items and enjoy doing so.
There's nothing wrong with enjoying a spot of shopping, but what spenders should always be aware of is how it will impact their bank balances.
These broad categories won't apply to everyone, but there may be elements of at least one category that you can identify with. The next step is working out whether those financial habits are helping or hindering your efforts to save money. By being more aware of the impact your decisions are having on your bank accounts, it's that much easier to grow your balance.
For more information on smart saving and all things financial, contact the Beyond Bank team today.
