Which “money personality” are you? | Your Brain on Money

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The idea that one-size-fits-all money advice is just terrible. We all have different personalities, which we intuitively know, and we all have different values. Not everybody wants or needs to own a home, and not everybody wants or needs to have children. Everyone has different attitudes and hangups about money. So, how do we get to know our money personalities?

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To me, you have to dive into your psychology. You need to understand why you think the way you do about money and how that's manifesting in your life in order to change it. We are diverse in so many ways, so financial advice should also be unique for the person, their background, and who they are. Everything else in our lives is customized to our preferences—why shouldn’t our financial advice be as well?

This is "Your Brain On Money," exploring the neuroscience of personality. Meet neuroscientists Dr. Joseph Kable and Dr. Moran Cerf, who explain how much of our personalities are built into the structures of our brains. They see structural and functional differences in the brain's valuation circuitry, which is crucial for decision-making. For instance, an MRI can reveal whether you are more or less likely to be a risk-taker.

How much of our personality is genetic, and how much develops over time? Scientists estimate that about 50% of our personality is determined by DNA, and the remaining 50% is shaped by childhood experiences (25%) and peer influence (25%).

Dr. Klontz has identified four money personalities:

1. Money avoidance – having a negative association with money, which can lead to poor financial outcomes.

2. Money worship – believing that more money will solve all problems.

3. Money status – equating self-worth with net worth.

4. Money vigilance – a trait common among the wealthy, marked by a cautious approach to spending.

All these personalities contain elements of truth and dysfunction. For example, impulsive people might make quick decisions, like starting a business, without fully investigating. On the other hand, those who are money vigilant might deprive themselves by avoiding necessary spending.

Financial therapist Dr. James explains how balancing these beliefs is essential for both mental and financial health. Personal finance is unique to each person, and effective financial planners consider personality tests to tailor advice according to an individual's risk tolerance.

The more you understand yourself and your money personality, the better decisions you can make. Personal finance is personal. The industry often suggests that everyone needs to follow the same advice, but we know that doesn’t work. Understanding your personality and reflecting on your relationship with money can help you make better financial decisions.

For example, some people, like me, prefer to automate their finances—paying bills, saving, and investing—because manual management would lead to inconsistent results. Most of us know what to do with money, but it's our emotions and mindset that hold us back. So, start by addressing the tasks you're avoiding and the feelings that are stopping you.