A couple of years ago I attended the Canadian Institute of Financial Planning’s National Financial Planner conference. Let me tell you that if you thought a bunch of financial planners don’t know how to party at a fancy hotel in Vancouver……you would probably be right.
Aside from discovering that there was no tequila at this conference and that I was the youngest financial planner there by about 15 years, (you think I am joking but a group of ladies I call “the grandma’s” felt sorry for me and adopted me) I did learn some interesting things.
The most interesting was the concept of money personalities. This was being taught so that we could identify the money personalities of our clients and be able to tailor our financial planning advice to suit those personalities.
So why is understanding your money personality important? Well, when we know ourselves and what drives us we can be in better control. This is the same for money. It can also help when you are discussing money with other people, like your spouse or partner. Understanding that you are a Squirrel and your spouse is a Dolphin can help you both to work together without as many fights. I say ‘as many fights’ because it won’t solve them all, just ask my husband.
Now there are 4-5 money personalities depending on what you google, so I am listing the 5 that I have come across within my career; Spender, Saver, Indifferent, Avoider and Attuned. However I find those titles boring and therefore we are going to use animals.
The Dolphin (Spender): Dolphin’s love to live in the moment, they are not as concerned about the future. They also LOVE to give gifts and treat other people. If you have a dolphin in your group they are most likely to grab the tab. The downside is that dolphin’s don’t think or do research before they spend. They will often buy at full price and can’t differentiate between whether it is a want or a need driving the purchase. This can lead to feelings of regret and a hard time sticking to a budget.
The Squirrel (Saver): Squirrels love to save. They will avoid debt at all cost. They know exactly how much money they need for everything and if they can’t save it first they won’t buy it later. Squirrels are deliberate, there is no such thing as impulse buying and often they will research something to the point of talking themselves out of it. The great thing about squirrels is they never worry about the future like retirement. The downside is that they aren’t enjoying life now because they are too busy saving for the future. This can lead to being obsessed with saving and budgeting.
The Sloth (Indifferent): The sloth has no interest in managing their finances. They will often defer to their partner or a professional to handle everything. They could manage it themselves but don’t want to. They are acutely aware of their situation in a broad sense and will only spring to action if forced to. They are content to let the chips fall where they may so to speak. This can lead to resentment from their partner due to their lack of interest, unless of course the partner is a sloth as well.
The Ostrich (Avoider): The ostrich has their head in the sand when it comes to their finances. They will avoid discussing all things money related. Bank statements and bills that come in the mail will sit un-opened and they have no idea how much anything costs. This person is different from the sloth who just doesn’t care. Often the ostrich is afraid to deal with their finances because they have catastrophized them and thus why they are avoiding it all together.
The German Shepherd (Attuned): I picked German Shepherd because I have one and I believe he is the best dog in the world. The German Shepherd is a combination of the spender and the saver. They are hardworking and obedient when it comes to saving and budgeting but they are also fun and adventurous. They enjoy living in the moment as well as saving for the future. They are very aware of their situation and are prepared for the unexpected. They don’t view success as a monetary amount but with living the life they want to live.
You may not fit perfectly into one personality type (I am a German Shepherd the majority of the time but have been known to turn into a dolphin) but understanding where your dominant personality is will help you be more aware of your money habits, here are some tips.
· Make a list: dolphins will get distracted by shiny and fun things. So make a list of what you can buy and stick to it. This isn’t just for grocery shopping, this also works for gifts and travel souvenirs. I admit that I can be a bit of a dolphin when it comes to Christmas, so I make a list of who I am buying for and a budget of what I can spend per person. This keeps me on track and off my husband’s radar (he is a total squirrel).
· Create a “Fun” account: squirrels will save to the point of hoarding. Creating a fun account will satisfy your need to place money in neat and tidy spots while giving you permission to spend money. This fun account could be for anything that you have deemed to be frivolous purchases simply because you want them. For example those RCMP flannel pants your wife bought last weekend…stop judging her.
· Make finances a game: most often the sloth doesn’t care because they aren’t interested. By turning your finances into a game with a reward outcome you may find yourself starting to take an interest in them. You have to make sure that the reward is something you truly want or it won’t work. For example, organizing your statements, bills and financial records in a file for your accountant throughout the year so you aren’t scrambling come tax time to find everything.
· Seek help: ostriches are in denial because of fear. So ask for help and get a partner!! Things are less scary when you aren’t alone. This can be with a professional like a financial planner or someone close to you like your partner or parent. This person can help you take the small steps at first, like opening the bank statement. They can also help you realize that maybe your situation isn’t as bad as you think it is.
The German Shepherd
· Remember to review: German shepherds tend to think they have everything under control due to their routine and therefore will forget to review and assess their situation. This can cause them to think that everything is great, not realizing they are starting to become careless with their spending. So make sure to take a look at your progress at least twice a year so you don’t suddenly shift gears and turn into a dolphin or a squirrel.
So now that you have an idea of what your money personality is, take some time to look on your past money habits. Do your past decisions seem more clear on why you made them? How does knowing your personality help you in the future with those choices.
What is your money personality? Share your story in the comments below or tell me what you would like me to write about next.
This is just the beginning of understanding your money personality or even your partner’s. I will be diving into each personality in more detail in the subscriber’s only section in the upcoming weeks so if you aren’t a subscriber you are going to want to sign up!