Your Money PersonalitySubmitted by Mission Financial Planning on August 9th, 2013
We all have different intellectual and emotional motivators in money matters. These can range from needing more security to wanting the prestige of wealth. By understanding what drives your decisions, or creates your challenges, you can be more financially aware and healthy, and operate more effectively and in-tune with your money personality.
Susan Zimmerman, LMFT, ChFC has written extensively on discovering the “core drivers” that motivate people financially. Here are just a few of the money motivators that Susan has found to be powerful.
The Motivation of Having Prestige
Those who are motivated by Prestige want a better quality of life. They don’t want to budget or limit where they can spend their money. They perceive budgeting as a sign that they haven’t quite made it yet; the problem with this motivator is that spending for prestige may lead to significant debt. It is important to have other financial motivators to balance this one.
Seeking Security in Life
Those seeking Security want protection and certainty. They want to create enough savings for the future, and are disciplined with their money. The problem comes when they limit themselves to investments that are too conservative; they struggle with the unpredictability of the market.
Wanting to See Future Growth
A related motivator for saving is the pursuit of Growth. Investments are very important to these savers, but this motivator can lead people to take undue risk as they seek the next deal. The motivation of growth can be one of the most beneficial as long as there are some controls in place; this saver, as well as those motivated by Security, would benefit from a written investment policy statement to keep their decisions balanced and appropriate.
Pursuit of Spontaneity
In reality, saving money can provide the funding for freedom and spontaneity. However, those with the Spontaneity motives won’t necessarily save for the long-term; their focus is usually on the shorter term goals which can lead to debt. Balancing Spontaneity with other motives can help impulse purchases from becoming a problem.
Other motivators include Peace, Control, Simplicity and Virtue; a combination of several motivators usually leads to the most successful financial planning.
Spender, know thyself.
Self knowledge will help you make good decisions not just about spending and saving, but in other aspects of your personal and business life. Mission Financial Planning helps clients identify your money personality and improve their relationship with money using an online tool based on Zimmerman’s work. This helps create a plan that keeps clients motivated on the long, and sometimes difficult, journey of financial responsibility.
Clients interested in learning about their “financial personality” can complete a brief exercise online, and will receive a customized report that shows their dominant internal priorities, along with helpful checklists and strategies. Couples enjoy having the language and data to discuss similar and different approaches to money, to better understand how to work together. Contact Mission Financial Planning for details.
Click here for an article about when we attended last year’s annual meeting of the Financial Therapy Association, and the importance of financial health and well being.