You probably understand that personality type affects behavior. Know that aggressive driver who tailgates no matter what? Yeah, they probably have an aggressive-angry-impulsive personality type. The same hard wiring can also affect your relationship with money—especially since money matters are so emotional. But these traits aren’t set in stone. With an understanding of how you are wired you can make adjustments to better handle your finances. Indeed understanding your psychological makeup can also help you discover ways to capitalize on your type’s assets, rather than beat yourself up for your internalized traits. Read on to learn more about money personality types and find out more about your inner workings.
There are a number of popular personality profiles out in the world. For the purposes of our discussion, I prefer the Keirsey system of temperaments—which breaks down into four main personality categories: Artisan, Guardian, Idealist, and Rational. Each category then breaks down into subcategories of note: Artisan (composer, crafter, performer, promoter); Guardian (inspector, protector, provider, supervisor); Idealist (champion, counselor, healer, teacher); and Rational (architect, field marshal, inventor, mastermind).
Take a moment to investigate your personality in the profiles links below. Then read on for some tips to improve your financial habits.
Personality types in brief
Artisan – as expected, this type of personality is creative and often pursues an artistic career. They are passionate and spontaneous and fun. They live for the moment. When it comes to money, the artisan attitude is spend it while you got it! Wheeee.
Guardian—natural-born protectors, guardians are drawn to structured careers that involve service and dependability. They yearn for a sense of duty. They are highly risk-averse when it comes to their money. Some might even call them cheap!
Idealist—chief trait is that they yearn for personal growth. Self-improvement drives their career choice and are drawn to teaching, counseling, advocating, social services, etc. They are quite compassionate in all things and prone to charity and volunteer work. May view money as “evil,” and drag their feet when it comes to saving.
Rationalist—as the name implies, these types of people are innovative and entrepreneurial. They are terrific problem solvers, and persistent. They aren’t necessarily focused on saving or spending money, just using it for forward momentum. For this reason, they need a little push to get their savings and investments in order. But once established (and seeing the end purpose), they tend to manage their finances well.
Personality type and money habits
According to the experts at Keirsey Magazine, artisans are impulsive—and enjoy spending rather than saving. They are the worst at saving of all the types and avoid making budgets. Does this sound like you? Take heart, you are also quite adaptable and generous and optimistic about the future. The key here is for artisan-types to rein in their spontaneity when it comes to money and put some effort into saving and budgeting. Perhaps set up an automatic transfer from a paycheck into a savings or investment account. As well, setting up automatic payments would help avoid late fees and such. It would also be wise to be cautious with credit since artisans are so impulsive.
Guardians are natural savers. They budget, comparison shop, clip coupons, and more. The motivation for saving isn’t based on greed; rather, it is a strong need for security. Guardians fear the unknown and can tend to be pessimistic. In order to foster even greater security, guardians may want to put savings into a safe, investment option such as a CD account, and they would do very well to make sure to match to the penny a company 401k match. To help balance their penny pinching ways, they may need to be encouraged to loosen up and spend a little bit on fun.
Ah the idealist—led by romantic notions and a desire to live a meaningful life. They may, or may not, be good at creating and sticking to budgets. But they certainly could use some guidance when it comes to money management, as well as asking for raises and negotiating new job income. Why? Because their work is an outflow of who they are—and putting a number on that somehow degrades what they do. They also may see saving for themselves as somehow selfish. One way to overcome this tendency is to think of it this way – if you are secure in your savings and retirements, then you can better devote yourself to volunteerism and philanthropy. Also, idealists need to make sure to sock money away for an emergency, start or jump up retirement savings. And while you are at it—take stock of your salary and think about what you truly should be earning. Maybe 2020 is the year to put out feelers for a new (higher-paying) job or negotiate for a raise.
Interestingly, rationals are often good at making money and creating multiple channels of income—but not necessarily the best at knowing where their overall personal income statement stands. They are most likely to be entrepreneurial and don’t fear the future. But they also don’t necessarily save for one. Like the idealist, they should be encouraged to set up channels of savings and lines of credit since they may not think about it naturally.
Couples and money
One thing to keep in mind is how personalities affect the life of a couple—and especially their financial life. In order for couples to have a good partnership, they need to be open about money issues and work together for solutions and budgets. Some inherent personality differences could make or break even the most in-love couples. For instance, two guardians would be smooth sailing—both committed to savings and risk-averse investment behavior. A guardian and idealist couple could create a force for doing good in the world and also keep monetary commitments in check. But there is a moderate risk for trouble for the following combinations:
Rational + Idealist
Guardian + Artisan
Artisan + Idealist
Guardian + Rational
Rational + Rational
Too much similarity within a couple can mean a lack of balance in your finances, while differences can lead to conflict in the relationship. Once you understand your individual money personalities, you can use it as a jumping-off point to start an honest conversation about your spending habits, values, and how you’ll share financial responsibilities. With open communication, you can work together to help each other reach your financial goals.