What the Way You Spend Money Says About You

Money personalities are like Myers–Briggs types and style subcultures, but for the way people spend and think about money – less punk, more pensions.

According to financial website Investopedia, there are five different tropes: big spenders, savers, shoppers, debtors and investors. Other terms that’ve been splashed around in papers over the years include hoarders, avoiders, and security seekers. The thinking is that the more you know your money personality, the more you’ll understand what drives your financial decisions (and why you face plant into your overdraft every month).

Because it’s important to know thyself – and because what is the experience of having a brain if it’s not for trying to define and reason with everything around you – here’s a rundown of what the way you spend money says about you, via a few of the more prominent personality types of the 2020s.

You either had internet drugs land on your doorstep via Silk Road sometime in the 2010s, are buying imported Cali weed and changa via Wickr and Telegram in the 2020s, or you signed up to Coinbase and hoped to become a millionaire within seconds amid the December 2017 Bitcoin (BTC) bull run. Or you’re all three.

Point is: you know how the blockchain works. Your Google search history includes the phrase “SatoshiPoint atm near me”. If you use cryptocurrency to procure pharmaceutical-grade drugs, then you’re both money savvy and also just incredibly dedicated to buying drugs. But if you’re looking at BTC more as a long or short-term investment then you’re probably a new wave investor. Your traits: money-savvy, security seeking, also wants to be rich.

Warren Buffet can suck a dick, baby. You’ve read The Intelligent Investor and Rich Dad Poor Dad (via comment thread excerpts on r/investing). You knew about Bitcoin in 2011 when they were worth $31.50 rather than the $20,234 they go for today (even though you didn’t buy any) and as a result, you now quite fancy yourself as an investor. Start-up tech has democratised the process too, with phone apps like Revolut and Freetrade offering low or no-cost day trades – making it possible to gamble away your finances quicker than ever before!

Tesla share news now pops up on your phone. Searching for the “best bio tech ETFs” becomes your new vocation. Driven by a need to keep up with tech, an instinctive approach to saving and/or making money, and severe FOMO (if only you picked up TSLA before the stock split!), you start to invest a sum of your monthly paycheque into stocks you found out about on Reddit and begin reading articles about businessmen. 

If you saved four weekends’ worth of pot-washing money so you didn’t end up in your overdraft after splashing out on the latest Palace drop, then props to you for knowing the value of delayed gratification. You’re a big spender, but you’re also security-seeking (i.e. you always make sure you have enough cash around). You’re the streetwear security seeker – you like having nice things (AKA stuff from Goodhood, like those really expensive candles with four wicks), but you also aren’t breaking the bank to do it.

This, according to Dr Richard Fairchild, is one type of spender – though he calls them “spender/security-seekers” and doesn’t refer to streetwear at all. He’s a senior lecturer at Bath University and has a background in behavioural economics. The other type of spender, he says, is a “spender/risk-taker”. This second group “don’t get worried about getting into debt, nor do they worry about getting out of debt,” says Fairchild. If this is you...

Think of it like this. If you have £100 to last til payday, but you don’t think twice about dipping into your overdraft before then “because it’ll all come back eventually”, then you’re in this camp. 

Hustle up, subscribers! You began the year knee deep in productivity YouTube, glueing your eyeballs to videos with titles like “How To Stop Giving a F*ck” and “Success Doesn’t Equal Happiness” while thinking about how to piecemeal your day into neat one-hour time slots. You believe in investing – whether that’s in yourself or the stock market, which you’re currently learning how to do via Instagram. You live by the mantra: anything is possible, as long as you try hard enough. Have you read Rhonda Byrne’s The Secret? Bro, do you even know how to dropship?

God damn, I’ve never seen a bank account look so beautiful. Is that… an iridescent blue-green bank card? Coral pink? Whatever it is, it looks lush. Because traditional bank accounts can suck – higher fees, archaic APIs, boring cards – new challenger banks like Starling and Monzo are increasingly popular. By extension, so is open banking (aka third party apps like Yolt that connect all your bank accounts into one smooth-running app).

You love that this is a thing. It’s so clean, so smooth. You have several pots or bank accounts set up – one for bills, one for food shopping, one for the emergency fund. You live for the future. Just make sure you don’t get seduced by the overdraft function provided by the shiny looking cards. They’re bright, cute and easy to use – but just because you’re accepted for a £1,000 overdraft at the sliiiiiiiiiiiiiiiiide of an aesthetically pleasing button doesn’t mean it’s still not £1,000 worth of money you don’t already have.

You look at your monthly pay-slip and see a small amount has been sent to your company’s pension scheme, but you’re not sure what it is or how the scheme works. You know what an ISA is, but what about a LISA? And what does 0 percent balance transfers on up to 29 months at a 21.9 percent APR variable mean? If this is you, it’s OK. Personal finance is weighed down by a mountain of absurd terminology that makes understanding your personal finances seem like an impossible-to-reach peak. It’s scary stuff.

The thing is: no one knows how their credit score really works. But while it’s easier to bury your head in the sand, there are tried and tested methods of reaching financial security (here’s a helpful spreadsheet).

Fairchild says that there’s a theory called nudge theory – which is that people can be nudged into making better decisions for themselves. In a study, one group of people were asked if they would put 5 percent of their monthly income into a pension plan in return for “an interest rate, an annuity – all really boring hard to grasp figures” when they reached retirement age. Very few said they would put any money in.

Group two, he says, were told “if you put 5 percent into your pension plan, this is what you’ll be doing – and they showed the participants on the beach, with their family, with the sun behind, having parties, a nice car, etc. They commoditised [the idea of a pension] and put it into things people would understand”. Lots more people signed up.

This is you. If you’re struggling to put money away and lack the motivation to do so – that’s okay, financial terminology sucks. But try and imagine the future. Holidays sound nice, right? Imagine tearing a new one on a resort with your 70-year-old pals, then go and book a meeting with your workplace pension advisor to find out what it’s all about (they should talk you through the big and small words).

Aha, you’re so sexy, can I have some money?

@ryanbassil