How Does Your Personality Type Affect Your Financial Management?

When you’re managing your finances, you’re likely to come across some bumps in the road. Part of the reason people struggle with money related tasks is because they don’t understand their specific personality type and how it interacts with their financial decisions. If you want to shift your habits, the best way to gain success is work in line with your natural tendencies. Author Gretchen Rubin created four major personality types, which she based on the way people meet or resist inner and outer expectations. You can gain a lot more success in your financial life if you understand where you fall within Rubin’s framework. Below are the four personality types and how they should handle their finances:

    Upholders are people who tend to respond to both inner and outer expectations. They have to easiest time keeping commitments to both themselves and others, as well as forming new habits. Upholders don’t have difficulty filing taxes by the deadline or paying bills on time, which are both outer expectations. They also have an easy time implementing a new financial strategy, such as setting a monthly budget or diversifying an investment portfolio. It is not stressful for upholders to do these tasks because they accept the fact that they must meet expectations to achieve a bigger goal.

    Obligers don’t have difficulty accepting rules imposed from the outside. They do, however, struggle to meet expectations that come from within. Obligers will meet conventional expectations such as paying their bills and buying lunch for a coworker. But self-created goals like saving in an employer-sponsored plan are hard for obligers to implement. If you are an obliger, you need to create systems focused on accountability. It is a good idea to automate savings as a direct deposit so you can gather up an emergency fund. You may also want to seek the ongoing help of a family member, friend, coworker or professional advisor in order to establish and maintain a system.

    Questioners only meet expectations, both inner and outer, when they feel that the rules make sense. They do not take conventional rules of thumb at face value, but instead do research and evaluate the pros and cons of various decisions prior to making them. If a rule does not make sense to a questioner’s specific situation, the individual will not follow the rules. Questioners are likely to complete financial tasks alone and forge their own path toward certain goals. They do get things done, but the process can be lengthy due to their tendency to overanalyze.

    Rebels avoid the rules whether they are from outside sources or from within. They consistently resist expectations, thus having difficulty forming new, healthy habits over time. They do not like control and therefore avoid tasks like implementing investment strategies or maintaining a monthly budget. Rebels may seem dangerous when it comes to financial management, but there are a number of successful business owners who fall into this category. Rebels need to establish limits that provide ample leeway if they want to succeed in the realm of personal finance. It is also a good idea to have outside accountability partners.

    There are strengths and weaknesses within each personality type. Understanding your personality type and how it functions will allow you to take the crucial steps toward successful personal financial management.