Business is Business Personalized Personal Finance: Part II

Money Mindsets: Personalized Personal Finance

I just had the opportunity to visit Israel and sit in on some of the classes at prospective seminaries that my daughter is considering for next year. In one of the seminaries, the class was Character Refinement, and the discussion on the day of our visit was about the nine enneagram personalities. I thought it was such a valuable lesson, teaching children about different personality types to help them understand themselves and others.

Understanding your personality type can be a game-changer in managing your finances effectively. Your unique traits influence how you approach spending, saving, and investing—to name a few. Here’s how different personality types interact with money and ways to optimize financial habits:

The Spender finds joy in instant gratification, often thriving on the excitement of shopping. However, this personality type is at risk of accumulating debt and lacking savings. To stay financially healthy, spenders should establish clear budget boundaries, perhaps using apps or tools to help track their expenditures. Automating savings, where a fixed portion of income is transferred to a savings account before being spent, can help build financial security. Practicing delayed gratification by pausing 24 hours before non-essential purchases can also curb impulsive spending.

The Saver, on the other hand, is cautious and prioritizes financial security, often to the point of discomfort with spending. While this prudence is commendable, it can lead to missed opportunities for enjoying life or growing wealth. Savers can benefit from strategic investments, such as diversified portfolios, that allow their money to work for them. Allocating a small portion of their savings for leisure or hobbies can create a better balance between financial caution and enjoying life. Additionally, learning about safe investment options can help savers embrace some level of calculated risk for higher returns.

The Investor enjoys taking calculated risks and focusing on long-term wealth creation. While their forward-thinking nature is an asset, overconfidence can lead to risky decisions or neglect of short-term needs. Investors should prioritize diversifying their portfolios across industries and asset types to safeguard against market volatility. Balancing liquidity by maintaining an emergency fund is also crucial, ensuring they can handle unforeseen expenses without liquidating investments. Periodically reassessing their strategies is key to staying aligned with evolving financial goals.

The Avoider feels overwhelmed by finances and tends to procrastinate on money-related tasks. This avoidance can lead to financial disorganization, missed opportunities or unaddressed debt. Simplifying financial systems is essential for avoiders; automating bill payments and savings reduces the need for active management. Breaking tasks into smaller, manageable steps, like tracking one month’s expenses, can help build momentum and confidence. Additionally, seeking guidance from a financial planner can provide structure and accountability, making money management more manageable.

Finally, the Giver derives satisfaction from helping others, often placing the needs of friends, family or charities above their own financial stability. While generosity is admirable, it can sometimes lead to neglect of personal financial goals. Givers should set clear limits on their charitable contributions, allocating a fixed percentage of their income to ensure their needs are met first. Exploring other ways to give, such as volunteering time or expertise, can reduce the financial burden. Most importantly, givers should remember that maintaining their own economic well-being allows them to support others more effectively in the long run.

By identifying your personality type and its relationship with money, you can develop tailored strategies to overcome challenges and make the most of your strengths. Whether you’re a spender, saver, investor, avoider or giver, adopting these personalized approaches will help you achieve financial stability and success. I will be doing a free webinar on this topic very soon; please reach out for more information.

Would you rather have the power to relive one day of your life or skip one day of your life? Please let me know if you have a good “would you rather” question, and we will highlight your submission.

Shmuel Shayowitz (NMLS#19871) is President and Chief Lending Officer at Approved Funding, a privately held local mortgage banker and direct lender. Approved Funding is a mortgage company offering competitive rates as well as specialty niche programs on all types of Residential and Commercial properties. Shmuel has over 20 years of industry experience, including licenses and certifications as a certified mortgage underwriter, residential review appraiser, licensed real estate agent, and direct FHA specialized underwriter. He can be reached via email at [email protected].