Want more money? Here are the personality traits that influence money habits

People often wonder why they cannot manage their finances well despite earning a significant amount of money every month.

Some are stuck in the same poor financial situation even after receiving a promotion at work, or a salary increase.

Personal finance experts have attributed this issue to personality traits, childhood trauma, and mental awareness, among other factors.

Personality traits

Paul Nixon, head of behavioural finance for Momentum Investments, said people are not aware that their personality trait influences how they spend and save money.

A personality trait refers to a consistent pattern of thoughts, feelings, and behaviours that define an individual’s personality. These traits shape how people perceive, interact with, and respond to their environment, others, and themselves.

Some of the personality traits include extroversion, neuroticism, introversion, optimism, pessimism, emotional stability or instability, and conscientiousness.

Personality traits can influence interpersonal relationships, career choices, coping mechanisms, decision-making, and emotional regulation.

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Personality traits and money habits

Speaking at the Momentum Success is a Science campaign in Sandton on Thursday, Nixon focused on two personality traits, conscientiousness and neuroticism.

He explained conscientiousness as being more organised, so this personality trait is people who tend to think and plan for the future.

Which is a very important personality trait to have when it comes to money habits because one will be able to build something sustainable for the future.

Neuroticism is associated with anxiety, being spontaneous and impulsive, which he said it is not a bad thing but it is better not to have this type of personality trait when it comes to handling money.

Because instead of thinking of the future, one will live for today.

Marshmallow children experiment

He used an example of the marshmallow children experiment. He said this is how parents can teach their children self-control from a young age, and see if they have the conscientiousness or neuroticism personality trait.

In the experiment, parents put a plate of marshmallows in front of children and tell them not to eat/touch them for a certain period of time.

Nixon said a way one can change their personality trait when it comes to handling money is by being international about what they want in the future.

ALSO READ: Are you teaching your children bad money habits?

Mirco-decisions, not macro-decisions

“It does not start with macro decisions, it starts with the micro decisions, the ones we make every day. Instead of buying takeaway every day for lunch, save that R50 towards a goal you have and make lunch.”

He said by doing this, when one starts handling big amounts of money, they would already have the mentality of handling money with care, instead of wasting it on instant pleasure.

Nixon touched on gratification and said this is how most people waste money. “Think of every money decision as a long-term investment, you know that what you are going to get in the future is greater than what you would get currently.”

Is education really key to success?

Vangile Makwakwa, founder of Wealthy Money, personal finance coach and online course creator, said it is through her personal experiences that she noticed education is the key to success, just like everyone says.  

She noticed how she was educated, with a fulltime job, but was still in debt. “I blew my first pay cheque within a week.”

She then got side hustles, but they still could not maintain her and she decided South Africa was the problem. Makwakwa moved abroad in an attempt to get more money from jobs, however, she still could not save money.

ALSO READ: How people’s heritage shape their money habits

She noticed that emotions play a huge role when it comes to how one handles money. There was a point she got panic attacks every time she had to handle or think about money.

Wealth vs rich

Dr. Kobus Neethling, creativity and innovation specialist said there is a difference between wealth and being rich.

Wealth is the money that people cannot see, and being rich is all the materialist stuff.

Neethling added that in most cases, when people spend money on materialistic stuff, it is to please other people, and not themselves. It is mostly to show that one can afford it.

He said for one to know if their habits aren’t working anymore is when there is no energy left, nor passion.

“If teachers teach from their habit brain, then they miss 73% of actually teaching the children. When you are helping a client, you have to move from your brain, into the client’s brain. “

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