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How Personality Affects Your Financial Habits

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Think of your personality like a fingerprint. From your preferences in food and clothes to your friend group and leisure activities, the pattern of thoughts instilled in our minds is uniquely ours, the culmination of experience and genetics. These set of traits shape the decisions that we make every day.

That said, it’s no surprise that personalities can also influence the way that we perceive money too. Some people may be more willing to take financial risks, for instance, while others may prefer to play it safe and grow their nest egg.

Getting to terms with your financial habits can help you better manage your finances and make better decisions for your future. Let’s learn more about how personality can shape your financial habits.

Early influences

During your early childhood years, you undergo a period of rapid psychological development. You develop preferences and tendencies that will form the basis of your personality in the future. Your relationship with money is included in this, generally resulting from imitation or rejection of your family or close friend’s own financial behavior.

Some experts claim that the personality you’ve developed during 1st grade can predict how you will eventually wound up as an adult. Therefore, these early ages are a critical time for developing healthy habits and perceptions, and it’s also one of the most pivotal moments for families to instill healthy financial mindsets in their children.

Social class and environment

A child’s socioeconomic status and environmental circumstances during their early childhood also play an important role in shaping financial behavior.

For example, if you come from a lower socioeconomic background and have grown up in an environment that values frugality and practicality, you may be more likely to adopt these positive habits that follow in adulthood, regardless of the difference in your income level. 

However, for some children with a negative upbringing, there’s a greater-than-average chance to develop unhealthy financial behaviours – such as compulsive spending – as a means to cope with their situation.

Conversely, if your upbringing is fairly luxurious and your parents had a carefree attitude towards their finances, you may be more likely to adopt looser and more impulsive financial habits that bring immediate pleasure. 

That said, it’s certainly not uncommon for many well-off families to teach their children the value of frugality and saving money either.

Psychological outcomes based on class

Where you lie in the socioeconomic scale can have a large impact on your psychological well-being.

You’re more likely to be happy and have more positive psychological outcomes (such as better self-esteem) if your needs and wants are met, which is often the case in stable and affluent households.

For those in lower levels of social functioning, things are a bit different. Kids exposed to these conditions are more likely to experience psychological stress based on their financial standing and family relationships. They may also have higher rates of depression.

Furthermore, these youths also are at an increased risk of engaging in dangerous behaviours such as drug use, sexual promiscuity, and crime. When these vices take priority in one’s life, it can take a great deal of effort to rise above them and improve one’s situation.

Types of financial personalities

With that said, there are several different types of financial personalities that we can classify individuals into. These are the following:

  • Investor. The investor is more likely to make savvy financial decisions, take calculated risks and invest their money wisely. They are comfortable making decisions around finance, like working out repayment costs and researching individual stock picks.
  • Debtor. A debtor is someone who has a hard time-saving money due to impulsive spending habits. They may be more likely to use credit cards and loans to finance their lifestyle or make large purchases.
  • Spender. A shopper is someone who enjoys spending money and may be more likely to make impulse buys. They may have a hard time-saving money or sticking to a budget.
  • Saver. A saver is someone who is more frugal and practical with their money. They don’t invest in high-risk ventures and tend to stick with tried-and-true methods. They are often able to maintain a healthy savings account or build up wealth over time.
  • Minimalist. A minimalistic person is someone who lives below their means and is very mindful of their spending. They may live a more simple lifestyle and forego some luxuries, saving their money for a rainy day.

While one’s socioeconomic status may play a role in influencing our financial type, there are other factors at play that can contribute to our financial behavior.


Overall, your personality and upbringing can have a large impact on the way you perceive money. While your childhood plays a big role, it’s more than possible to take charge of your finances and adopt healthier financial habits at any age.

By understanding what drives your financial behavior, you can work towards developing healthier money habits that will serve you well in the long run.

Adam Mulligan did his degree in psychology at the University of Hertfordshire. He is interested in mental health, wellness, and lifestyle.

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