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Examining and understanding your feelings, beliefs and attitudes towards money is an important step in making good informed financial decisions. By understanding the psychology of money as related to your beliefs, money history, attitudes, experiences and current behaviors, you can create your current money picture and manage your savings, earnings, investments and even debt better.
Wealth is a complex concept, and your perceptions, biases and emotions about money can affect the financial decisions you make. Getting money requires taking risks, being optimistic, and putting yourself out there. But keeping money requires the opposite of taking risk. Recognizing the difference between what you want and what you need can help you keep your spending aligned with your financial objectives and goals.
By taking a brief look at financial personalities categories, you’ll see that your financial personality type can affect your relationship with money, and the decisions you make about how to spend, save and invest it:
1. Spenders believe money is meant for spending.
2. Savers love to get a good deal.
3. Risk-averse personalities view security and planning as their No. 1 concerns.
4. Gamblers are willing to take big risks, and are driven more by optimism and gut
feeling than by details and analysis.
5. Flyers don’t think about money at all.
Therefore, do not aim to be coldly rational when making financial decisions. Aim to just be pretty reasonable. As someone rightly said “it’s not money that makes you happy, it’s how you use it”. Once you identify your emotional reactions to money, you can learn to deal with money more effectively and enjoyably. Because every buying decision you make, somehow has an impact on your level of financial security.
So, manage your money in a way that helps you sleep at night….Good Savings can be created by spending less. You can spend less if you desire less. And you will desire less if you care less about what others think of you. You can build wealth without a high income, but you have no chance of building wealth without a high savings rate.
The highest dividend money pays is “the ability to do what you want, when you want, with who you want, for as long as you want”.
