Managing our finances is harder for some people than others because of our personality types.
There is a psychology behind the way we handle money which can be broken down into the four most common money personas – so which one are you?
Personality Type #1: The Stockpiler
While keeping records of bills, bank statements and receipts is a good thing, there is a limit to how many years of paperwork you need to keep. Hoarding unnecessary paper will make your admin more challenging.
Documents you need for the Receiver of Revenue should be kept on file for five years in case of an audit. This includes receipts for claimed expenses and any investment information.
For other receipts or slips, once you have reconciled them with your credit card and bank statements you can toss them. With online banking you don’t need to keep your bank statements on file.
Any utility bill over three months old is no use for FICA requirements so you may as well throw those out.
Keep in mind when throwing out paperwork that you should use a shredder as the information could be used for ID theft.
Personality Type #2: The Procrastinator
This is probably one of the more common personality types. Quite frankly, we can all find better things to do than sort out our finances. So you need to turn it into an enjoyable experience.
Create a positive space by putting on your favourite music, making yourself comfortable and having a little treat to eat or drink. My latest tax return involved a whole bar of chocolate! And I also spend a bit of money on fun files and post-it notes – anything to make the experience a bit less drab.
Reward yourself with a special treat once you are finished, like watching a movie or going out for dinner.
Personality Type #3: The Perfectionist
A perfectionist can appear as a procrastinator by focusing on irrelevant details. If you are more obsessed with having colour-coded files than reviewing your investment portfolio, then your money energy is not being properly directed. Be careful of over-complicating your financial accounting by focusing too much on detail rather than the big picture.
Use your goal-based personality to set a date in your calender to complete a specific money task.
Personality Type #4: The Avoider
Unlike procrastinators, who just lack motivation, avoiders just avoid the problem altogether. This personality type is most likely to end up with serious debt problems.
This may stem from an emotional reaction, like financial stress whilst growing up, or you just feel overwhelmed by the idea of dealing with your situation.
You need to start putting routines in place to manage your finances. Pay your bills the same time each month and have everything you need at your fingertips in one central location.
Commit to just 30 minutes for a task so you don’t feel overwhelmed. If you have a partner or friend who is more organised, ask them to help you or enlist a financial adviser.