Why Good Money Management Starts With Knowing Your Financial Personality


When you apply for a new job, you’re often asked to complete a personality test so the business can decide whether you’ll be a good fit based on your behavioural tendencies.


What’s your management style? Will you thrive in an open-plan environment? Are you a team player? How disciplined are you? There are many facets of your personality a business needs to understand before deciding whether you’re a suitable candidate, and knowing your personality is also central to managing your personal finances.


For example, if you know you’re prone to impulse purchases, you’ll be able to identify situations where you may be more likely to splash out on an unplanned purchase. Being aware of this may prevent you from making multiple impulse purchases which will help with household budgeting.


Ultimately, knowing your financial personality will help you make more informed financial choices particularly when there’s a time or emotional pressure involved.


A recent finder.com.au study of 2,027 Australians found we’ll be left with $3.9 billion debt after splurging on Christmas gifts this year, and 2 in 5 of us will turn to credit to fund our gift-buying.


So although it’s important to understand your financial personality throughout the year, with the festive season well underway, now is the time to be conscious of your financial behaviour so you don’t start the New Year with a whole lot of debt.


Below, we’ll outline some common financial personality types and explain how you can use this knowledge to make better financial choices.


  1. Cost-cutters
    Being savvy with their finances, ‘cost-cutters’ will seek financial products and deals that are light on fees so that they get the best value-for-money. Cost-cutters will favour ‘no frills’ products to cut down on unnecessary charges such as application fees, account-keeping fees, or even administration fees charged by a provider. If you fall into this category, make sure the product still comes with useful features that can save you money. For example, even though a basic home loan product will help you save on fees, it could mean that you forgo useful money-saving features such as the ability to make extra repayments and a linked offset account.

  2. Rewards-seekers
    With a tendency to spend big, ‘reward seekers’ will opt for products that offer added value and benefits in reward for their spend. For instance, reward seekers are likely to sign up for reward credit cards for added benefits such as the ability to earn frequent flyer points or to score a cash-back offer. If you’re a reward-seeker, be conscious of whether the extra benefits are worth the additional cost particularly when it comes to the annual fee. Some reward credit cards will come with an annual fee that can range from $250 - $350, so you need to decide whether it makes financial sense for you.

  3. Impulse buyers
    Impulse or unplanned purchases can be dangerous territory for those who are looking to manage a household budget. Whether it’s an in-store promotion or an online sale, be wary of making impulse purchases as these can often set you back when it comes to managing your cash-flow. The best way to avoid impulse buys is to spend time evaluating your need for the item. Ask yourself whether the item is a need or a want and compare options from different providers so you know you’re getting a good deal.

  4. The non-complacent consumer
    The ultra-savvy consumer is one that refuses to pay the ‘lazy tax.’ Whether it’s on their utility, internet, credit card or home loan account, this is someone who’s constantly on the lookout for a better deal. The ‘non-complacent consumer’ is passionate about saving money and isn’t afraid to do the legwork in order to save a few dollars. They know the value of reviewing their financial products to make sure they’re still getting a competitive deal and they’re prepared to switch providers if need be.

    For instance, the non-complacent consumer knows if they can get a 0.25% discount on their home loan rate it could go a long way in helping them fast-track their mortgage repayments. On a $350,000 variable mortgage at 5.5% interest, monthly repayments would be $1,987 and total cost of the loan would come in at $715,414.
    However, with a 0.25% rate discount (which can be achieved by refinancing), the total cost of the loan would be $695,776. This equates to a saving of $19,638, which is fairly significant.


The financial market is a competitive space and in the midst of the festive season, there are plenty of competitive offers, sales, and promotions being thrown our way. Knowing your financial personality can help you understand how you make transactions and having this knowledge can help you avoid paying a lazy tax. Consider your financial personality and keep this in mind when doing your Christmas shopping, and well into the new year.


Guest blog by Bessie Hassan | Money Expert at finder.com.au