2-3 min read (or checking your budget page)
Did you know there are different money personalities? Ever wondered what yours is and what it means for your bank account? Over the next few weeks, we’re rolling out a series of Slice articles on different money personas to help you identify your type and learn more about what the pros and cons of each personality are. This week we’re diving into the Money Hoarder persona.
The Money Hoarder
The Money Hoarder is defined by their perception that money equals security and although that is true in most cases, the hoarder might take this a little too far. They enjoy saving money as much as others enjoy spending it, and usually have very conservative, if any, investments. Other names for the money hoarder are the saver and penny pincher.
Are you a Money Hoarder?
Do you sneak your own snacks into the movies, get uncomfortable when you spend money, and find the decision to purchase something very difficult? You might be a Money Hoarder. This type of money personality usually finds no satisfaction in purchasing items and often feels guilty when they do. Keeping a tight budget, avoiding using a credit card, and having absolutely no debt are more traits of the hoarder.
What the Money Hoarder is doing right:
Off the bat, the hoarder’s future-focused approach to their finances is a big plus. It’s also no secret that 22seven believes keeping a budget is advantageous in every aspect. The fact that the hoarder enjoys financial planning and runs a tight ship on their accounts is something other personalities should try to incorporate. Money Hoarders are always prepared for dreaded unexpected expenses and are always on the lookout for a bargain buy – then again, who doesn’t love a bargain?
What the Money Hoarder is not so great at:
Having more cash than you need and not investing it in the right way can be detrimental to the hoarder’s ability to grow their money. Investments are often too conservative and do not reach full potential growth. Avoiding credit also slows down your credit score progress. Your strong credit score will help when you buy things for which credit is unavoidable e.g. a home. Working hard for your money and not occasionally using it for a well-deserved getaway or something else that brings you joy, misses the point of life and may have adverse mental effects.
How to be a smart Money Hoarder:
Of course, we’re not saying you should stop saving and blow all your money each month, but you should definitely remember to reward yourself every now and then – take a vacation, go out to dinner, or buy that item you’ve been eyeing online. When setting up that all-important budget, set an amount to use for entertainment purposes. That way, you won’t spend more than you have to and feel guilty about it because you’ve planned to spend it.
You could also do some research into riskier investments – like exchange traded funds or low-fee unit trusts. You may find that certain risky investments aren’t that risky over the long-term (5+ years) and may give your savings inflation-beating growth.
Remember to enjoy what you’ve worked for and to not compromise your living standards and mental health by cutting too many costs.