When it comes down to money, a person’s personality plays a significant role in their financial decision-making. Everybody is unique, and that’s what makes us human, so it really shouldn’t come as a surprise that there are particular types of personalities that are more likely to have money problems than others. It’s tough to change your personality traits, particularly when you’re older, so simply having an understanding of how your personality affects your financial decisions can help you make better financial decisions down the road. It’s most certainly an important topic to understand, as money troubles can exacerbate quickly and you can end up in deep water within the blink of an eye. This article will examine 4 different personality types whom are more likely to have money troubles, as well as some suggested ways to improve your financial situation if you fall under one of these personality classifications.
Fiscally speaking, the higher the risk the higher the reward, but the likelihood of experiencing high risk success is substantially low. Some folks are born as risk-takers, others develop this personality trait in time; but the majority of the time, it’s the thrill of the risk that these types of people revel in. Statistically, the chances of financial success for the risk-takers are low, so it is very important for these types of individuals to diversify their risks to increase their probability of financial success. These individuals can make high-risk investments, but they can’t put all their eggs in one basket. A blend of high-risk and low-risk investments will significantly improve their financial future.
- The Spenders
Whether they’re wealthy or not, the spenders are the types of people who live life to the fullest without taking into account the financial consequences of their decision-making. Whether they’re spending money to enjoy themselves, look good, or to simply please others, the spenders are likely to incur substantial amounts of debt which can take a long period of time to repay. For this reason, their opportunity of financial success are considerably impeded. Saving money is the key to financial success, so to prevent overspending, the spenders should consider setting up a budget to monitor their spending habits and additionally, inspect the triggers that cause them to spend their money to begin with. Confronting the triggers that cause these types of people to overspend is the key to resolving the problem.
- The Ignorants
The ignorants are commonly the type of people that are financially uneducated and have no interest in improving their monetary skills. The ignorants may have a similar mentality to the risk-takers in that they want to ‘live life to the fullest’ and as such, spend all of their money and wind up in debt. It’s crucial that people with this personality trait learn the value of money and how it can be used to provide a better future. Rather than thinking about now, they should try to think about how spending their money now will have an effect on their future. Take an interest in learning how to budget by reading online weblogs and articles. Who knows, they might actually enjoy it?
- The Pessimists
In bleak contrast to the risk-takers, the pessimists have the tendency to pass up on opportunities to make money purely because they’re afraid they won’t succeed. When it comes down to large investments like buying a house or investing in the stock market, the pessimist will avoid taking any risks for fear of losing their hard-earned money. The issue with the pessimists is that by avoiding all risks, they will feel more safe, and this will impair their chances of financial growth and success. An effective solution for the pessimists is to diversify their investments in a wide-range of markets to make sure that they have a well-balanced portfolio that is low-risk and offers an opportunity for a good return.
There are obviously many other types of personalities than the ones specified above, however these are probably the most common personality traits that hinders financial growth and can lead to money troubles. In today’s world, money is without question incredibly important not only for survival, but also to be able to enjoy the only life we have. Just because you have specific personality traits doesn’t signify that you can’t change some of them with time to be more financially responsible. If you need any support with your finances, or you’ve found yourself facing a mountain of debt as a result of overspending, speak to Bankruptcy Melbourne on 1300 879 867 for assistance, or visit www.bankruptcymelbourne.com for more information.