Most people fall into five basic financial categories or money personalities. Each reflects how they handle money and how their behavior affects their financial results. I’m referring to the spender, the saver, the avoider, the giver, and the amasser. Interestingly, these personalities are observed in personal finance, but also in practice finance. Which one are you?
The spender has no qualms about spending money on what they want, whenever they want. This person will most likely be in debt, with several loans on the books and balances owing on multiple credit cards.
Granted, there is “good debt” and “bad debt.” The recommendation for someone who finds themselves in this category is to follow a simple concept: pay yourself first.
This means out of every paycheck you receive, take a certain percentage out for yourself before paying any bill. A healthy amount is 10 to 15 percent. The same percentages apply to creating an emergency fund for a practice.
Once you have that money set aside, you can distribute the rest amongst your expenses. This money needs to be safeguarded and left alone, not spent on whimsical desires. Following this plan religiously every time you get paid will help you accumulate substantial savings rather quickly.
Savers are quite the opposite—they tend to pinch every penny. They are excellent at setting money aside, often looking for creative ways to cut their budget down at all times.
This leads them to having a considerable stockpile of money, arguably at the expense of enjoying life or reinvesting in the practice. Most often, people with this type of personality don’t have much debt, if any.
Savers tend to be like doomsday preppers. They sometimes function out of worry and fear of poverty, more than ambition and productive savings. A practical suggestion for savers is to set aside a given percentage of their income to go toward a “fun fund.” This money can be spent on whatever they wish without guilt or doubt. This way, they still maintain their healthy saving practices, while allowing themselves to have fun or go on a vacation without thinking it’s unaffordable.
The third personality type is the avoider. This person tends to dodge anything having to do with money or finances because it frustrates them. They just don’t want to deal with it. Behaviors include not opening bills, blindly writing checks, or stuffing financial papers into a drawer to avoid looking at them.
Whether it’s due to ignorance, the stress of living expenses, or the perceived inability to save, these people feel overwhelmed by their financial situation. As a result, they stick their head in the sand and ignore their financial reality altogether.
The problem with this type of behavior is it can quickly result in financial trouble. Unpaid bills can lead to late fees, being sent to collections, a decreased credit score, and long-term financial struggles.
The main recommendation for avoiders is to find someone in your life (e.g. a family member, friend, or accountant) to help understand, manage, and track personal or practice finances. Just because you don’t want to do it doesn’t mean there isn’t someone who is willing to help and to teach you.
The fourth personality type is the giver. This person very much enjoys helping others. He or she is financially stable enough that they feel they have too much and can afford to give money away. Pushed to the extreme, over-the-top charity can result in financial ruin. Often, this big-hearted personality will give first, and consider their own financial safety and requirements second.
Givers should be sure to have a sound financial foundation in place, then save a set percentage in a dedicated “charity account” at home or an “angel fund” at the practice. The money can be automatically deposited each month. This way, they are fulfilling their desire to help others, without sabotaging their own financial health.
The amasser is the last of our personality types. This person focuses on financial well-being, savings, investments, and charity. They want to do it all—successfully. This is their fuel, it’s what drives them. If they aren’t successful, their confidence takes a major hit. Having this much focus on finance can often leave little room for anything else, which may be this personality type’s biggest flaw.
Amassers might be so consumed by financial concerns, they often lose sight of what’s really important, including self-care, family, and friends, which can lead to hardship on a personal level. While being an amasser can be a fast track to wealth and a comfortable lifestyle, it could result in having a poor quality of life.
It is important for amassers to take a break and live in the moment with those around them. Without people to share it with, life can become a pretty sad place. Build your wealth, while stopping to smell the roses. Make memories. Build healthy, lasting relationships with your spouse, family members, friends, team members, sales reps, etc., not just your bank account.
So which personality type is best? Regardless of the group you belong to, each has its strengths and weaknesses. The critical thing is to find the right balance. Identify and harness your financial strengths, and use them to build your wealth. Recognize and try to amend your weaknesses so they don’t sabotage your financial plans.
If you’re having a hard time figuring this out by yourself, ask your spouse, a family member, a close friend, an accountant, a financial advisor, or a consultant to help you assess your spending and saving habits objectively. Together, you can explore your strengths and weaknesses and formulate a plan to get on the road to wealth and success.
Phil Zeltzman, DVM, DACVS, CVJ, Fear Free Certified, is a board-certified veterinary surgeon and author whose traveling surgery practice takes him all over Eastern Pennsylvania and Western New Jersey. You can visit his website at DrPhilZeltzman.com. He also is cofounder of Veterinary Financial Summit, an online community and conference dedicated to personal and practice finance (vetfinancialsummit.com). Kat Christman, a certified veterinary technician in Effort, Pa., contributed to this article.