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Focus on "the human side of money"—your behaviors, motivations, and emotions—to guide your financial planning.

By Sandra Ebejer
March 15, 2021
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Odds are, when you think about your finances, you think about them in terms of numbers. You base your investments on your income, your age, your years until retirement perhaps. You determine how much you'll put into savings by seeing how much you have left over after paying your bills. It's all basic math, simple dollars and cents. At least, that's what many of us have been conditioned to believe.

money-personality: coin purse and coins
Credit: Getty Images

But according to Jacquette Timmons, financial behaviorist, money expert, and author of Financial Intimacy: How to Create a Healthy Relationship with Your Money and Your Mate, there is so much more to ensuring financial success than just number crunching. As she says, "You don't manage money; you manage your choices around money." To meet your financial goals, Timmons says to instead focus on "the human side of money"—that is, your behaviors, motivations, and emotions—to determine your money personality and use that information to help guide your financial planning.

How many money personalities are there?

Trick question: There are as many money personalities as there are people. To clarify what she means by money personality, she gives an example: "Let's presume I gave every Real Simple reader $1 and said, 'Come back in 30 days and tell me what you did with that dollar.' However many people got that dollar, there would be that many different answers." Some might have spent their dollar, others might have invested it, and a few might still have it handy. All of these choices, Timmons says, would be completely valid.

"More than likely, the reader made that choice in the context of the circumstances that they were weighing at the time that I gave it. That's why I think it is so important to go beyond the numbers and that you have a better understanding of why you do the things that you do," Timmons says. Having this self-awareness, she says, will help you to make "better, smarter choices, both in the short term and in the long term."

Your money personality isn't something dictated by a formula; there's no quick quiz you can take to determine which personality type you fit into. Instead, it's something you come to learn through self-exploration and reflection.

How can I determine my money personality?

Start by thinking about your life in any context unrelated to money. When you get together with a group of friends, do you plan the outing, or do you let someone else make the decisions? Do you generally go with the flow, or are you more proactive? What's your negotiating style? What are your strengths and weaknesses?

"Look at how you do everything, literally," Timmons says. "How do you exercise? How do you go about running your household? How do you go about interacting with your friends, your family, and your work colleagues? Do you relinquish control? Or do you exert control? More than likely, you will be able to draw a parallel not only to how you handle money, but the way in which you go about making decisions."

Knowing the answers to these questions can help you determine if you're using your money in a way that works for you: Are your investment choices appropriate for your personality? Are you spending your money in a way that fulfills you and brings you joy? Are you supporting causes that align with your passions and beliefs? Further, knowing how you respond and react to various situations can shine a light on behaviors or choices you may want to change, and can prompt you to think differently about your relationship with money—a relationship that Timmons points out is "one of the longest relationships that you will have in your life."

But aren't I better off budgeting?

Though it may seem easier to deal with numbers than wade into uncomfortable self-analysis, prioritizing certainty over curiosity can cause you to miss out on some critical information that could benefit you financially. "If you're only focusing on the bottom-line number, you don't have a sense of whether or not you are optimizing your income statement," Timmons says. "If you don't look beyond the numbers, you won't really get a chance to see if you are investing in a way that really makes sense for you."

Questions Timmons suggests asking yourself, as you examine your personality as well as your investments: "Do you have the proper allocation? Are you taking the appropriate amount of risk? If you only look at the numbers, you're missing out on all of that invisible insight. Because just looking at the numbers can obscure some of the more important questions to ask yourself."

"What I think people sometimes fail to recognize," Timmons continues, "is your decision-making process and your thought process that you exercise in other areas, well, they're going to show up in money, too. We have this tendency to think of our money life is over there, but over here I'm someone completely different. And that's just not true."

Identifying the underlying emotions, motivations, and behaviors you use in other areas of life can provide clarity around your spending habits, your investment choices, and why you make certain financial decisions. And this clarity, Timmons says, is the key to ensuring long-term financial success.