Understanding Your Money Personality

It’s a common observation that some individuals seem to effortlessly enjoy financial freedom while others struggle. However, the reason for this disparity might not simply be luck or income, but rather a person's underlying 'money behavior type'. Recent research has identified three distinct financial styles, categorized by how people approach spending and saving.

The Three Money Behavior Types

Researchers have identified three distinct groups: Financial Explorers, Habitual Savers, and The Disengaged. Understanding these styles can be a valuable step towards improving financial well-being and achieving greater economic security.

Financial Explorers

Financial Explorers demonstrate a high level of engagement with their finances, actively participating in budgeting, saving, and investing. They are proactive in managing their money and seeking opportunities to grow their wealth. This group is also more likely to discuss financial matters with their social network.

Habitual Savers

Habitual Savers prioritize caution and conscientiousness. They favor traditional saving methods, diligently avoiding debt and focusing on building a secure financial foundation. They tend to rely on their own judgment and are less inclined to seek external advice.

The Disengaged

The Disengaged exhibits minimal financial planning, limited budgeting, and consequently, possesses little in the way of savings. They lack established financial habits, engaging only sporadically in financial activities. This group is also the most susceptible to financial stress.

Research Findings & Methodology

The research, published in the Pacific-Basin Finance Journal, involved a study of 519 individuals aged between 18 and 35. Participants self-reported their engagement in various financial activities, including emergency savings, deal-seeking, budgeting, investment app usage, buy-now-pay-later schemes, and credit card utilization.

No 'Perfect' Money Type

Dr. Steffen Westermann, a financial planning lecturer at Griffith University and co-author of the study, emphasizes, “There’s no perfect money type here. Each group does some things well and others less so.” The profiles aren’t a ranking system, but a framework for improvement.

Implications for Financial Education

Dr. Jennifer Harrison, lead author from Southern Cross University, highlights the implications for financial education, policy development, and support services. She argues, “One-size-fits-all financial literacy programs are unlikely to be effective,” as young people are not a homogenous group when it comes to their financial lives.

Tailored Financial Support

The research advocates for tailored approaches to financial support. Financial Explorers could benefit from refining risk assessment skills. Habitual Savers could benefit from guidance on long-term wealth building. And The Disengaged could benefit from simple, low-effort tools and support systems.