Personal beliefs about money 1

I recently attended a deep dive training over the weekend on financial management and I was asked what my personal beliefs are about money.

This is a question that wouldn’t occur to anyone to ask themselves honestly. I mean, I had to take some time to reflect before I wrote my answers.

As I was pondering the question and it’s implications, I thought back to a conversation I had with a close friend about how the environment we grew up in shapes us in all aspects of life, including our finances; how we spend our money, the kind and quality of things we buy when we go to the market, how we view others and their spending habits and so much more. It was a really eye opening discussion. We will do well to have more of such discussions.

Money beliefs are ideas, thoughts, or opinions that impact your money behaviour. A money belief can either be protective or liberating. Money beliefs are common to all of us – we all have money beliefs – and one person's beliefs can be vastly different from another's.

Before I share with you what my personal beliefs about money are, lemme share with you the seven money personalities and their traits. As you read them, identify which one (or a combination) you are and ask yourself how you came to be that. This is the first step on your journey to financial freedom. We will talk about belief systems that form these personalities in upcoming posts. You can share yours with me in the comment section.

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1. The compulsive saver: Saves money endlessly, views money as a source of security, frugal and financially responsible, bargain shopping expert. Some compulsive savers are so afraid of losing money that they go their entire lives without spending any of what they worked so hard to save. For example, they might choose to skip out on hobbies or activities that could bring them happiness and purpose.

2. The compulsive spender: Often makes unnecessary purchase, spends when in emotional distress or in for immediate gratification and usually feels remorse afterwards. They have an outgoing personality and love treating people to something special, sometimes for no particular reason. Even if they have large amounts of debt, compulsive spenders will often continue going on shopping sprees. They may even try to hide large purchases from friends and family.

3. The compulsive money-maker: Believes life is better when you make more money, top priority is growing wealth and making more money, craves recognition for their financial success. While compulsive moneymakers are usually on a strong path to achieving financial freedom, they can enter dangerous territory if they start neglecting important relationships to prioritize growing their wealth (e.g., choosing to work on weekends over spending time with loved ones).

4. The indifferent-to-money: Tends to be financially well-off, rarely thinks about money, feels money should not influence important decisions in life. Many people who are indifferent to money feel they only need a modest amount of money to be happy, which is a healthy mindset. But things can get ugly if they’re not responsible with their finances (e.g. depending on a partner or spouse to do the work for them).

5. The saver-splurger: Shares a combination of traits between saver and spender, they start out saving a lot of money, but then give into spending impulses out of nowhere. When they do use their savings, they might spend on things they don’t need or will rarely use. Saver-splurger often end up stressed and disappointed in themselves for working so hard to save money, only to lose it so quickly.

6. The gambler: Shares a combination of traits between spenders and money makers, takes big risks with money, happy with financial wins but very depressed with lossess. It’s not unusual for gamblers to encounter sudden windfalls or devastating losses. The most obvious risk is when the gambling gets out of control and they borrow against things like their retirement money or children’s college fund to make up for losses along the way.

7. The worrier: Constantly worried about losing money, lacks confidence in ability to acheive financial freedom, always in preparation mode. They constantly obsess over the worst case scenario of what will happen if you run out of money. It’s smart to be aware of what could happen if you don’t prepare for your future. But letting worry and anxiety eat away at your happiness in the present moment is never a good thing.