When it relates to money, a person’s personality represents a meaningful role in their financial decision-making. Everyone is unique, and that’s what makes us human, so it really shouldn’t come as a surprise that there are various types of personalities that are more likely to have money troubles than others. It’s difficult to modify your personality traits, particularly when you’re older, so simply having an understanding of how your personality impacts your financial decisions can help you make better financial decisions down the road. It’s certainly an important topic to understand, as money problems can intensify quickly and you can find yourself in deep water within the blink of an eye. This post will examine four different types of personalities whom are more likely to have money challenges, in addition to some suggested ways to improve your financial situation if you fall into one of these personality types.
Economically speaking, the higher the risk the higher the reward, but the chances of experiencing high risk success is substantially low. Some people 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 odds of financial success for the risk-takers are low, so it is very important for these types of people to diversify their risks to increase their likelihood of financial success. These individuals can make high-risk investments, but they can’t put all their eggs in one basket. A mix of high-risk and low-risk investments will considerably improve their financial future.
2. The Spenders
Regardless of whether they’re wealthy or not, the spenders are the types of individuals who live life to the fullest without taking into consideration the financial repercussions of their decision-making. Whether they’re spending money to enjoy themselves, look good, or to simply please others, the spenders are more likely to accumulate significant amounts of debt which can take a long time to repay. Subsequently, their likelihood of financial success are significantly inhibited. Saving money is the key to financial success, so to avoid overspending, the spenders should consider setting up a budget to observe their spending habits and at the same time, inspect the triggers that cause them to spend their money to begin with. Addressing the triggers that cause these types of people to overspend is the key to resolving the problem.
3. The Ignorants
The ignorants are normally the type of folks that are financially uneducated and have no interest in improving their financial skills. The ignorants may have a similar way of thinking to the risk-takers in that they want to ‘live life to the fullest’ and consequently, spend all of their money and find themselves in debt. It’s crucial that folks with this personality trait learn the value of money and how it can be used to provide a better future. As opposed to thinking about now, they should try to think about how spending their money now will impact their future. Take an interest in learning how to budget by reading online blogs and articles. Who knows, they might actually enjoy it?
4. The Pessimists
In stark contrast to the risk-takers, the pessimists tend to pass up on opportunities to make money purely because they fear they won’t succeed. When it concerns large investments like buying a house or investing in the stock exchange, 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 secure, and this will hinder their likelihood of financial growth and success. An ideal 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 certainly many other personality types than the ones specified above, however these are probably the most common personality traits that impairs financial growth and can cause money concerns. In today’s world, money is without question extremely important not only for survival, but also to be able to enjoy the only life we have. Just because you have certain personality traits doesn’t signify that you can’t modify some of them with time to be more financially responsible. If you need any assistance with your finances, or you’ve ended up facing a mountain of debt due to overspending, talk with Bankruptcy Experts Newcastle on 1300 795 575 for assistance, or visit http://www.bankruptcyexpertsnewcastle.com.au for additional information.