How Your Money Personality Type Can Shape Your Financial Planning

  •    A freelance reporter and writer based in Philadelphia, Pa., Dinah previously worked as a staff reporter for The Associated Press and Dow Jones Newswires.

Do you have trouble digging out of debt, no matter how many personal finance articles you've read? Maybe, on the other hand, you have plenty of money but can't stand the thought of spending any of it – even on reasonable purchases for yourself or loved ones.
If finances cause you stress, or are a source of tension in your relationships, you may need to look beyond practical advice on saving and understand how your personality drives your decisions about money.

Authors, therapists, financial planners and researchers have outlined various money personality types to help explain the ways people behave with regard to spending, saving and borrowing, and to help them develop healthier attitudes toward personal finances.

“Personal and family financial decisions are influenced by attitudes, personality types, past experiences, and family dynamics. When you understand yourself and others, you can make financial decisions more effectively," says Focus on Money Personalities, a publication of the Purdue University Cooperative Extension Service.

“Awareness and self-analysis can bring clarity and balance both to your psyche and your financial portfolio. With clarity and balance come a sense of control and well-being," the publication says.

Different experts use different personality names, although the characteristics are similar.

Psychotherapist, author and money coach Olivia Mellan, on her blog, labels the money personalities the amasser, the avoider, the hoarder, the money monk and the spender.

  • The amasser likes having large amounts of money, links money to self worth and may feel like a failure if lacking funds.
  • Avoiders put off paying bills and may not keep financial records. They may harbor an “aristocratic disdain" for the mundane details surrounding personal finances, or may feel inadequate to deal with the complexities.
  • Hoarders like to save money and have a hard time spending on themselves or loved ones. They may view spending on vacations and entertainment as frivolous, preferring to save money for retirement or a rainy day.
  • Money monks, in contrast, see money as dirty and corrupting, and aren't comfortable coming into big windfalls or investing.
  • Spenders, unsurprisingly, have a hard time saving money for future purchases and long-term financial goals.

Years ago, financial planner Ray Linder found that clients sometimes avoided his advice for largely emotional reasons, a 2013 LearnVest article notes. He eventually linked people's approach toward money to their personality types as defined by the Myers-Briggs Type Indicator, a psychological profile test, boiling down the 16 personality types into four categories – protectors, planners, pleasers and players.

Protectors, for example, are conservative and make sure their financial futures are secure, but in extreme cases balk at the notion of spending anything now, which can cause marital problems, according to the article.

The Purdue Extension publication includes a worksheet with 24 questions to help you determine whether your “money personality" is “choleric, sanguine, melancholy, phlegmatic, or a combination."

  • A choleric money personality has a “sometimes nearly manic sense of personal power" and “may destroy her own dreams through unwise risk and debt."
  • The sanguine person is generous, enthusiastic, creative and impulsive, dislikes tedious recordkeeping, tends to be disorganized and “has no idea how much she is spending."
  • The melancholy personality is frugal and conservative perfectionist who may feel depressed by feelings of inadequacy. While rarely in financial trouble, this person may overspend because of a desire to own “the best," or might “unwisely cosign loans for others."
  • The phlegmatic personality is dependable, hard-working and good-natured – averse to risks and conflict – and may be “easy prey" for scammers.

A 2012 study from Kansas State University and the Klontz Consulting Group, published in the Journal of Financial Therapy, developed an assessment tool for financial and mental health professionals “to identify disordered money behaviors that may impede on progress towards one's financial goals." These disordered behaviors include compulsive buying, pathological gambling, compulsive hoarding, workaholism, financial dependence and financial denial.

“Much of the existing literature on financial behavior focuses on basic money management tasks (such as balancing a checkbook)," the researchers wrote. “However, it can be equally important to identify problematic financial behaviors that can sabotage one's financial health."

Think you could benefit from the aid of a financial therapist? The Financial Therapy Association provides a state-by-state listing of professionals. Or, if you prefer to address your money personality on your own, there are a number of books on the subject.

Wired for Wealth: Change the Money Mindsets that Keep You Trapped and Unleash Your Wealth Potential, by Brad Klontz, Ted Klontz and Rich Kahler, offers advice on rewiring your brain for wealth.