When it comes to money personalities, the Hoarder can be spotted a mile away. They are tight, can live small, don’t throw things away, and prefer to recycle rather than buy new. TV depicts Hoarders as living in squalor, but financial hoarders are different. For financial hoarders, money represents security.
They might still take pride in their appearance, but they do everything on the smell of an oily rag. The process of spending money is unpleasant for them and they would prefer to avoid it where they can. However, if they do buy new, they buy excellent quality to be sure it lasts. You will not catch them buying coffees or much in the way of discretionary spending unless they have a strong reason to. Some studies suggest it pains them to spend. The Hoarder is the opposite of the Shopper. If they have the right strategy they should be able to sort their financial future because their lifestyle costs so much less than the average person. That is assuming they don’t marry a Shopper.
The Shopper finds it easier to spend money than to save. They look good but are not usually going anywhere (financially speaking). Shoppers are prone to generosity and tend to spend money to make themselves feel better. They don’t have to spend big sums of money, but buying things is their version of comfort eating. They don’t have to have a credit card or be in debt, but they fritter more than most.
Shoppers are not stupid. It is not that they can’t save money, it’s more that they need to have a reason to save, and in the absence of that reason then they are going to spend what they have. The trick to engaging a shopper with a financial plan is to ensure their non-negotiable costs are catered for. We each have three or four things that we need to spend money on to be happy, otherwise we are going to feel deprived. For some it is a coffee a day, family holidays or a cleaner. For others, it might be hobbies and socialising. It is crucial that the Shopper has identified their spending pressure points and factored these into their spending plan. Austerity measures and the Shopper are not going to be compatible partners. Most importantly, a Shopper will always need a compelling goal, with a clear strategy. If effort doesn’t translate with a result, they will be off spending again.
Finally, the Ostrich — someone who would rather bury their head in the sand than organise their finances. It could be because money scares them, they have had no role model or they don’t have time to sort things, so they don’t bother trying. They are often paralysed by indecision. Anxiety drives their behaviour. Ostriches usually know they are in denial but it is not until the anxiety or frustration of no progress becomes too much before they take measures to fix things. The Ostrich sees making no decision as better than making the wrong decision, which fits with their psychological profile of preferring to do nothing. Unlike the Shopper who can be financially competent in their day job (most Shoppers are financially literate, but can’t be bothered to do it outside of work), the Ostrich tends to bury their head in the sand in more than one area of their life.
Words: Hannah McQueen
MEET HANNAH McQUEEN
Hannah McQueen is the founder and director of enableMe — Financial Personal Trainers. Her team have worked with more than 5,000 clients and the spectrum of clients is vast. Income levels range from $40,000-$1 million per annum. Clients differ in asset levels, marital status, age and types of employment. But all want to get ahead faster and engage enableMe to help them. Hannah and her team are exposed to a diverse range of situations and in turn have to refine different methodologies to overcome obstacles and employ various strategies to exploit opportunities. The enableMe team know first-hand the havoc your psychology of spending can have on financial progress. Studies suggest genetics could account for 30% of your behaviour around money. Just as the speed of your metabolism can affect the speed of weight loss, your money personality can impact how hard making financial progress might be. Shoppers usually look good but aren’t always making progress. Being a saver, much like having a fast metabolism, should give you the “inside lane” or advantage with regards to financial inroads, but all too often the saver lacks a strategy for financial advancement and ends up no further ahead in spite of their advantage.
We are all told that if you want to get ahead, you need to work hard. But working hard in isolation seldom translates to financial progress. Hannah and her team work with their clients to help them understand and achieve their financial capability whether they are shoppers, savers or plodders.
Go to enableMe.co.nz to book a consultation. The cost of the first (no obligation) meeting is $100 + GST (Normally $300 + GST).
Hannah McQueen, enableMe, Auckland City
enableme.co.nz | 0800 897 898