Coins being put into a piggy bank

Personal finance coach Mapalo Makhu says that our personalities are unique. We all have strengths and weaknesses that help us navigate life, and those very strengths and weaknesses can determine how well we manage our money. Why is it important to learn about your money personality? Think about it this way: at work, when you attend a training course or one of those sometimes quite dreadful team-building activities, you do a personality test to see what type of leader you are. This test helps you work out your strengths and weaknesses, your leadership style, and whether or not you’re a team player

The same applies to your money personality: when you identify yours, you will become aware of how you handle your finances, and this awareness will help you identify your triggers and the areas that you need to work on. Knowing your money personality allows you to develop self-awareness, which plays a huge role in getting your money right so that you can move from being broke to becoming financially secure.

What is your money personality?

piggy bank being broken open with a hammer1. Are you A Spender?

Spenders love to make money and spend it. They convince themselves that they work very hard and therefore deserve to enjoy their money. They give little or no thought to savings or investments and are all about instant gratification. They tend to assume that ‘something will come up’ as they spend their last couple of rand. They are usually in debt, and even if they do manage to pay that off, they will find themselves in the same situation again a few months down the line, as they’ve never cultivated good money habits.

How Spenders can improve their finances:

The spender’s trigger is having money. If there’s money in their bank account, they are itching to spend it. If they are running low on cash, they still want to spend money, because they are feeling depressed that they don’t have money. The best way for spenders to deal with their shortcomings is to automate their savings and investments. This means that they have to put a debit order in place for those all-important expenses like savings, investments and personal insurance on the day they get paid, so that they can spend whatever is left guilt-free.

Money being put into a piggy bank2. Are you A Saver?

Nothing gives a saver more pleasure than knowing they have money at all times. They live for balancing their numbers and pat themselves on the back for saving more than the previous month – they feel secure only when their savings are at a specific level. They become miserable and a little grumpy if their savings are not at the minimum level they’ve set for themselves. They are often risk averse, and although they save, they do not go further and invest their money. They believe that leaving their money in the bank is more secure. And they certainly do not want to lose any money.

How Savers can improve their finances:

Savers constantly think about their savings, and they set themselves ambitious goals for their savings at any given time. If their savings are below this level, they become frustrated. Savers are risk averse and generally don’t do well as investors. They tend to check on their investments frequently and, if they lose some capital, their immediate reaction is to want to switch funds – in the process forgetting their investment goals. Because they are risk averse, they usually prefer the ‘safe’ option of money-market savings.

The solution for savers is to learn more about how the long-term investment market works, and to remind themselves of their long-term goals instead of focusing on short-term results. Savers need to learn to enjoy life a little. One solution is for them to earmark some money for fun and to call this their ‘fun fund’.

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Ostrich with its head buried in the sand3. Are you An Avoider?

Then there are those whose nature it is to avoid uncomfortable situations at all cost. Those people are avoiders. The sayings, ‘What you don’t know won’t kill you’ and ‘Ignorance is bliss’ are not far from the truth when describing them. Avoiders would rather not engage in the topic of money at all. They can talk about anything and everything money can buy, but will never talk about money itself.

They work, earn an income and spend it, but seldom spend money meaningfully on investments, retirement or insurance. Financial life is foreign to them, and they do not actively seek ways to improve their money management skills. Unfortunately, when it comes to finances, this kind of thinking won’t get you any closer to your goals. In fact, ignorance can cost you dearly in reality.

How Avoiders can improve their finances:

The avoider’s trigger is the topic of money itself. Avoiders will say things like, ‘Things always work themselves out’, bu they won’t have a solid plan for getting their finances in order. Because they prefer sticking their heads in the sand, the best solution for them is to learn one thing about money at a time. If they have never invested before, they should make an effort to choose one topic and month and learn about it – for example, how compound interest works – and build their knowledge over time. Avoiders get overwhelmed easily if they try to learn too much too quickly. And in true avoiders’ style, they then end up avoiding and ignoring their finances again. Their motto should be ‘one step at a time’.

Bag of money4. Are you a Money Master?

As their name indicates, money masters have mastered their finances. They maintain a good balance between saving, investing and spending. They are comfortable talking about their finances. It gives them pleasure to look for new opportunities to make their money work for them. They are prudent, but they also enjoy their money. They are usually focused on increasing their net worth.

How Money Masters can improve their finances:

The money master has found true balance between saving, investing and living their #bestlife! So all they need to do is make sure they continue doing what they are already doing.

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Illustration of a baby girl5. Are you a Cinderella or Ben 10?

Oh, poor Cinderella! Poor Ben 10! Their financial plan consists of getting a sugar daddy or a sugar mama who will pay their bills – they believe there will always be someone to take care of their financial needs. They cannot fathom making a financial decision for themselves, and trust that someone else will do it for them. Psychologists call this condition the ‘Cinderella complex’. Cinderellas and Ben 10s do not concern themselves with budgeting. They do not have the slightest interest in learning about their personal finances or how they can improve themselves financially.

How Cinderellas and Ben 10s can improve their finances:

No matter how happy their current relationship seems to be, Cinderella/Ben 10 must be prompted to start thinking ‘what if’. What if their current relationship does not work out? A Cinderella/Ben 10 will usually have to downgrade their lifestyle if their relationship does not work out. To ensure that they survive the adverse effects of their sponsor no longer being there for them, they should smarten up promptly by saving diligently and making sure that they have their own bank account and continue to upskill themselves in their careers.

Things all women should know about managing money: finance coach Mapalo MakhuMapalo Makhu is the author of You’re Not Broke, You’re Pre-Rich (published by Penguin Random House SA) and is an award-winning personal finance coach and speaker, as well as the founder of Woman & Finance.

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