Do you worry about money even though you have a steady income and a healthy retirement fund? You may be “money vigilant.”
Do you believe money can solve all your problems? You could be a “money worshipper.”
Recognizing your money personality is the first step toward financial health, according to some financial planners, credit counselors and psychologists.
Knowing what drives your financial decisions, they say, can help you reach smart money goals, whether that’s spending less on impulse purchases or saving more for retirement.
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“We have these beliefs clunking around in our heads, and for many of us it’s been passed down from our parents,” says Dr. Brad Klontz, a financial psychologist and associate professor at Creighton University. Those internal beliefs are formed by your childhood experiences, the community you grew up in and the habits of those around you.
Researchers identified four common attitudes toward money: Money Worship, Money Avoidance, Money Vigilance and Money Status.
Take our quiz — based on a Kansas State University study led by Klontz — to help identify your money beliefs.
The money beliefs
Money worshippers believe that more money will solve their problems and they can never have enough money. They are more likely to overspend on themselves or others and carry credit card debt. Money worship is the most common belief among Americans, according to research by Klontz.
Avoiders believe that money is bad and they do not deserve it. They may ignore their finances and avoid thinking about money. They may also give away money to others in order not to have it.
Take action: One option if you’re an avoider is to automate your finances to avoid thinking about them — setting up automatic 401(k) contributions or sending money to a separate savings account, for example. Loved ones can help hold you accountable to those tasks.
Those who are vigilant believe that being frugal and saving is important. They may be secretive about their finances and uncomfortable discussing money with others.
Take action: Secrecy should not stand in the way of better money habits. If you’re uncomfortable talking to family or friends but have money questions, use NerdWallet to find the best savings accounts for an emergency fund, research investment options or get the right credit card to match your spending.
People who hold this belief see money as a means to achieving a higher status. They believe self-worth is equal to net worth and may be driven to earn more money than their peers. They may also take risks to make money quickly and buy expensive things.
Take action: If you hold this belief, give yourself a cooling-off period before making a purchase. You can also make a budget — and stick to it — to avoid overspending.
Updated Feb. 21, 2018.