How are you with money? Are you an avid spender, saver, hoarder or are your finances completely out of control? Leah Oliver, Founder & CEO of Minnik Integrated Financial Solutions talks about understanding your financial personality and how it’s the key to boosting your bank balance and living a full, fun life outside of work.
As wealth advisors, we meet all types of financial personalities. What strikes me is that the majority of people will spend everything they earn, and then reach for debt, particularly credit cards and asset finance. We educate and encourage people to start their financial journey at a young age, to set themselves up – in order to have the financial freedom to live the life they choose.
By age 40 people tend to approach us on the realisation that their income years are suddenly numbered. There will come a time when the income stops, possibly prematurely due to issues like redundancy. The ability to build a passive income stream (one which earns for you while you are busy at work) becomes less possible with each year that goes by. We have one life and wouldn’t it be a shame if money held you back from achieving your goals and living your dreams.
Here Leah talks about money.
Are you a Spender?
Do spend every cent you earn and more often than not, even more than you earn. Be careful – you should learn to budget before you find yourself with debts that you can’t control.
Spenders don’t understand the extent of their spending. The spending can be for different reasons and varies with age groups. Unfortunately, this group can waste valuable income years and end up regretting having lost them. In the long term, the freedom and lifestyle choices of the spender become very restricted.
We assist this type of personality by implementing a budget to reflect the spending choices of the person so that they understand the extent of their spending. We then educate them on how to maximise surplus, fast track debt repayment, and direct their spending more wisely.
Are you a Saver?
A saver is ‘good’ with money and regularly sets aside funds, creating a cushion in case of an emergency. This is very wise behaviour. Keep up the good work, but do remember that you’re allowed to treat yourself every now and then!
Savers are a step ahead and often saving is all they know how to do. A lot stems back to how their parents managed their money. This type of financial personality will reach their goals faster than the spender as there is spare cash to work with.
As they say money makes money, and the savings directed to the right places will achieve exactly that. Even for the saver, the budget is key to understanding surplus, and knowing the best way to invest it for maximum return.
Are you a Stasher?
You are an extreme form of a saver and worry so excessively about having money in the future that you don’t have any time to enjoy what you earn. You need to chill out and have some fun. Saving is great, but do remember that you can’t take your money with you!
Workaholics fall into this type. In some instances it may not even be about the money. Money is like a drug and once they feel the euphoria of wealth starting to accumulate they can’t stop. Unfortunately the point of having the wealth is missed altogether.
The person works so hard their entire life that they forget to invest time in their relationships and life experience in general. At the opposite extreme of the spectrum to the spender, once gone, those years are lost forever.
Are you a Dreamer?
You have big dreams for a successful financial future but you aren’t prepared to put in any hard work to get there. You expect money will flow to you naturally but that’s not how the world of finance works. You should seek help from a financial planner on how to best use the money you earn for a balanced, financially safe lifestyle.
The dreamer type is common with young people. This type tends to say “I have the rest of my life to make money, I want to enjoy life now while I am young”. The key is to understand that if you work hard and set yourself up financially as early as possible, you have rest of your life to enjoy yourself.
Then there is the type that chooses to follow their passion and neglect income in the process. Whilst following your passion will lead to great endeavours, there is a point of being realistic and respectfully funding your activities as you move forward.
Minnik Integrated Financial Solutions are specialists in business advisory and personal wealth management. Contact us today to discuss your financial needs, and embrace your journey to wealth. www.minnik.com.au