The psychology of money
Believe it or not, your personality and finances are closely related. The first way in which your finances are affected by who you are is through your own evaluation of yourself, your self-worth if you will. If you are a person who doesn’t think highly of yourself, and doesn’t think you will ever be successful, then you will not try to save or invest. On the other hand if you do believe in yourself and see yourself being successful, you will strive to achieve that through investing, certificates of deposit, or even just paying your bills on time to avoid costly late fees and interest. In order to be successful with your finances, you must start with you, and improve how you view yourself.
Another way, in which your personality affects your finances, is through your perception of money. To many people, money is just a means to an end, that end being, getting the things you want or need. To others, money is a symbol of hard work and dedication. These are the people who are very careful with their money, not in a sense of refusing to spend it, but merely not letting it waste. For people who just see money as a way to get what they want, often ignore penalties, or ways to save because to them money is just a half-way point between work and possessions. These things are all examples of your money mind set. While reading this, ask yourself what does money mean to you? Do you do everything you can to preserve it? And are there ways in which you could improve your ways of managing money through your perception of it?
The next example of personality affecting your finances is your idea of saving. Oftentimes people think they have saved when they get something on sale, when in reality; you still paid for those items, so you actually spent. The only time you save is when you pay less for something you needed and would have regularly paid full price for. When you are out shopping and thinking about “saving” ask yourself, would I have bought this if it weren’t on sale? Did I come here looking to buy this item? One good way to ensure you are not participating in spending disguised as saving is to make shopping lists. But in order for this to work, you must stick to the list no matter how good the sales appear to be. When you do this you get to enjoy what I like to call real savings. If you are going down your list getting the items you went there to buy and you find that one of the items on your list is fifty percent off, then you have officially saved. That is money you were prepared to spend and were planning on spending that you got to keep. So the next time you go shopping, whether it’s for food or clothes, ask yourself, is this really saving? The key to good financial success doesn’t come from your salary, or sales, but inside yourself.
Ryan, freshman, Arts & SciencesShare on Facebook