Your personality impacts every aspect of your life, from where you live to who you hang out with to what you do for a living. Each and every one of us has a distinct way of doing something and budgeting is no exception.
For better or worse, your personality affects the way you choose to spend money, what you like to spend that money on and how you budget to afford your lifestyle and meet your financial goals. Based on what kind of budgeting personality you have, you need to know how to work with your strengths and weaknesses so you can get the most out of your money management style.
Do you know your budget personality? Let’s go over the 5 common budgeting personalities – which one do you identify with?
The OverachieverCommon traits: goal-oriented, competitive, focused, determined
If you’re a budgeting overachiever, then you like having clear plans written down for everything and love crossing off to-do lists. You’ve done your background reading and know exactly what it is that you want, and you create schedules and set milestones to help you achieve your financial goals.
You’re on track to meet retirement, have your emergency fund ready to go, and you might even be squirreling money away for a large purchase, like a house. You probably also pay your credit card bill in full each month and check your bank account balance on the reg. Not because you’re afraid of overdrawing, but because you like to see just how far you’ve come.
The last thing you’d ever want is to be in debt and you keep your spending in line to make sure that never, ever happens. Planning is great, but not everything is that predictable, so you can get really thrown off when life throws you a curve ball.
Budgeting Tip: It’s awesome you take the time to create a monthly budget and that you have the discipline to stick to it. But don’t forget to create an emergency fund for unpredictable situations and don’t be afraid to use some of it on a whim, like a last-minute weekend trip. Because as much as you may try, you can’t (and shouldn’t!) always plan everything.
The ProcrastinatorCommon traits: free-spirited, big picture over details, easily distracted
The last thing The Procrastinator wants to think about is money. Why worry about it when there are plenty of better things to do? If you’re a Procrastinator, you may prefer to ignore your finances because everything will just eventually work itself out. Except when it doesn’t and then you really start stressing.
Procrastinators tend to put off paying bills until the last minute and have definitely paid their fair share of late fees. Your budget is probably more of an estimation instead of exact match and sometimes this means your account gets overdrawn or you get hit with a surprise bill in the mail.
You’ll handle your finances if you’re really in a pinch, but tracking every dollar that comes in and out isn’t your thing. The thought of building an emergency fund is so overwhelming you simply don’t have one, but you know it’s time to finally get your financial act together.
Budgeting Tip: Since budgeting is such a chore and you probably won’t ever be the type of person who sticks to an exact financial plan, try using a free budgeting app like Mint that will do all the work for you. To ease your financial worries, you can even use the app to set financial goals so things like building that emergency fund will be totally painless.
The SpenderCommon traits: impulsive, nonconformist, spontaneous
Spenders are just what they sound like—as soon as there’s money in their pocket, they feel a burning desire to spend it immediately. If this is your type of budget personality, then you can appreciate how difficult it can be to save money or stick to a budget. In fact, you’ve probably experienced the ways that wasteful spending has led to financial instability.
The Spender tends to learn best from the past and when it comes to budgeting, looking back on what you’ve spent makes more sense than setting a budget before the money comes in. You probably already know what you spend too much on, but you never really feel the sticker shock until your bank balance gets depleted or the bills start rolling in.
Budgeting Tip: Something like a cash envelope system of budgeting works very well for The Spender. You essentially mark different envelopes for each category of spending and put enough cash in each envelope to cover those expenses. When the cash runs out, you’ll either have to wait out the rest of the month or pull cash from another envelope. Stick to this for a while and you’ll get a much better handle on your spending.
The PrioritizerCommon traits: organized, driven, energetic, disciplined
This is the person who knows exactly what they want out of life and how to go about achieving it. They may have an enviable work/life balance, and somehow find a way to juggle all of their commitments seamlessly. When it comes to their finances, Prioritizers keep their finances mostly organized while still enjoying all that life has to offer.
Prioritizers can use their positive energy and sense of balance by putting their savings first, even though that may take away from their time with friends and family. They can do this by putting aside their savings first, and then see how much they have left over for having fun. And don’t forget that dipping into you savings accounts isn’t an option unless you truly have an emergency. And no, a last-minute weekend with your college buddies doesn’t count.
Budgeting Tip: You have a significant head start since you know what makes you happy, but don’t lose sight of the big picture. Make sure you have a financial plan that accounts for 5, 10 or even 20 years in the future. Systems that automatically deduct from your paycheck and go into long-term savings accounts like an IRA or 401(k) will really help you keep your eye on the prize.
The AutomaterCommon traits: multitasker, preoccupied, active
Automaters love to spend their time socializing and working on hobbies, so hands-on money management isn’t their strong suit – they’d much rather being doing something, anything else! That doesn’t necessarily mean their financial lives are a mess – they prefer to automate as much of their finances as possible. This is a “set it and forget it" way of life.
You’re probably always on the go or busy taking care of your family, work and other obligations, so using your phone or another mobile device is your favorite way to manage your finances. You probably use at least a few different financial apps to keep an eye on things, but tasks, like paying bills and saving, are all set on autopilot. Automating sure makes things easier, but you can be so focused on what’s coming next, it can be hard to think about long-term financial planning.
Budgeting tip: Automation is one of the easiest ways to pay your bills on time and maintain regular savings habits. However, you don’t want to completely ignore what’s going on with your money. Make sure you check in with your finances to make sure so you don’t miss out on any financial opportunities and you may even want to meet with a financial planner once a year to make sure you are getting the most bang for your buck.
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