What is your money management style?

11/30/2017


One of the best things about handling money is that if you are paying attention, you will learn so much about yourself. I know I did and I'm still learning so much about myself.

When I started working and handling money, I thought I knew what I was doing. Well, until I got myself into credit card debt. That quickly taught me that I didn't really know my priorities. I hated that period of my life with a passion. The thought of owing that much money for things that I couldn't even account for was the worst feeling in the world. This negatively impacted my life in a multitude of ways. I found myself stressed, upset, and angry at myself for being not so smart about my money.

The credit card was meant to be used for emergencies. It was supposed to help me build a good credit score. But sadly, my lack of financial knowledge and money management style caused my credit card to do the exact opposite of what I intended.  This was an extremely hard lesson for me to learn, but also one of the most valuable. 

Because of growing up poor, I learned that I was so scared of never having enough that I started saving money just to hoard it. This was bad because I kept missing out on opportunities to maximise my money. But I've learned to be more open to legit opportunities that can grow my money. I'm no longer holding myself back. 

Have you ever noticed you and your family members or friends don't behave the same way with money? You might be a big saver, hanging on to every rand. Your friend might be the big spender, with their salaries gone within three days. Your family member might really be independent, always earning money. Another wants everything, wants it now and wants you to purchase it.

If you have struggled to connect with a particular way to manage and track your finances, chances are you're not working with a unique way of managing your money.  Understanding your unique financial management styles will help you become more confident in the way you relate to money

Here are some of the money management styles:

· The avoider: these are people who avoid thinking about money and never keep track of where their money goes. They often spend more than they earn and find themselves in debt.

· The big spender: This type cares about status, their wealth is permanently on display by spending on premium brands. They practice little caution about what they spend their money on. They refer to themselves as being adventurous; such individuals rely heavily on debt to finance their extravagant lifestyle and take a gamble on uncalculated ‘investments’ in search of a quick buck.

· The shopper: These are firm believers in retail therapy; they consider shopping as a hobby and a form of relaxation. They always want to be seen to be setting trends, and often make impulse purchases on products that they don’t need. These types are often aware of their addiction and are concerned about it, but they never take any remedial action. They hardly ever have anything left to save and invest for the future.

ALSO READ: When using a credit card, it’s all about priorities

· The Hoarder: these are often over cautious about where and how they spend their money. They stick to a strict household budget, love a good bargain and avoid making luxury purchases. They are not risk takers and are often scared of the thought of losing the wealth they have accumulated.

· The Investor: these are people who are smart with their money. They are well aware of their financial status and live within their means. They make careful and balanced decisions with their investments. Most importantly, they make money work for them and aim to have a diversified portfolio of investments to cover future needs.

This is not meant to label you or put you in a box. It is meant to give you insight into why you make the financial decisions you do, and what money means to you. Understanding the type of person you are when it comes to your finances is vital. It gives you the power to learn both your financial strengths and weakness and what you can do about them. 

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