Personality Types and Money

Being a budget coach, I've come across different personality types when it comes to money. It seems some can handle the rules of staying within a budget and others fail within weeks. One possible reason on why some can stick to budgets and others can't is rooted in their fundamental personality type. Myers Briggs is  one of the most popular categorization of personalities. It tries to divide a population into 16 categories, based on 4 dichotomies.

Extrovert vs Introvert - Describes from where people draw their energy.

Sensing vs Intuition - Are information gathering functions; describe how new information is understood and interpreted.

Thinking vs Feeling - Are decision making functions. These functions are used to make rational decisions from either the mind (thinking) or feelings.

Judging Vs Perceiving - Describe how one relates to the outside world.

These 16 personality types are then grouped into 4 broader categories:  Artisans, Guardians, Idealists, and Rationalists. An Income Assessment done by the Career Assessment Site shows that of all of these personality types Rationalists scores the highest average household income.   ENTJ's are highly driven take charge people, thus majority of large Corporate CEO's fall into this category. Idealists, on the other hand, and especially those who fit with the INFP description (highly compassionate and focused on making the world a better place) are less likely to cash in on their traits. These INFP types are the world's Musicians, teachers, and writers. It does make sense that certain personality types are drawn to certain careers, and thus help determine earnings potential and success with money. Different personalities require different approaches to handling money.

Artisans ( ESTP, ESFP, ISTP, ISFP)

Artisans love having freedom of choice  and will be highly spontaneous in nature. They are focused in the here and now of enjoyment. Since they’re characterized by a tendency to be compulsive, and are unlikely to think long-term, Artisans are often carefree when it comes to spending, and not concerned with saving for the future.

Money advice for Artisans -best way to approach money is to have a simple system of budget tactics such as auto draft of paycheck into a savings account. Artisans don't want to deal with Spreadsheets and formulas. Simple is always better. The Envelope system will benefit Artisans for controlling spending.  

Artisans make up about 38% of the population.

Idealists (ENFJ, ENFP, INFJ and INFP)

These folks take money personally and see spending as an extension of themselves. Idealist want to be happy, and want those around them to be happy. They are concerned about the emotional needs of themselves and others. An Idealist can be found constantly picking up the tab for friends, or buying expensive gifts for family members.  They may even overspend on themselves with the thought process of "I'm worth it".

Money advice for  Idealist -  the best way to handle money is to come to terms with "Quality is better than Quantity". For example: Spending time with someone for free can be just as rewarding as buying lavish gifts. They need to focus on the long-term happiness of saving vs the short term fulfillment of spending. Visual aids such as Saving Meters will help Idealists.

Idealists make up about 12% of the population.

Guardians (ESTJ, ESFJ, ISTJ and ISFJ)

Guardians are conservative on change but didactic in preparation. They think ahead, make sure their future is taken care of and are consistent with their spending. Even though these people are very good at budgeting, they are fearful when it comes to investment risk. A Guardian will most likely put money into very stable investments over taking acceptable risk. A 1% return in a savings account, is better for them than a potential 10% return in stocks. Dealing with unpredictable negative situations such as a job loss can throw a guardian into chaos.

Money advice for Guardians - Extend your emergency fund and savings from 4-6 months to 6-8 months to better deal with security.  Balance your risk with your age when it comes to investments. A young Guardian can survive the market ups and downs and end up ahead investing in stocks over "safe bets" of bonds.

Guardians make up about 38% of the population.

Rationalists (ENTJ, ENTP, INTJ and INTP)

The Rationalists have a no-nonsense, logical approach to decision making. Their greatest strength is strategy and will focus on long term plans and investing.  The iNtuition part of their personality will drive them to trust themselves and choices. A Rationalist will spend money based on their own analysis, not others.  Which means in relationships, the Rationalists may be overtaking the money decisions causing a bit of contention.

Money advice for Rationalists - Loosen the purse strings and let your partner have a fair share in money decisions. (Even if you think they are wrong) Create a "Fun spending" Account that will allow you to enjoy money while knowing your savings are safe in other accounts.

Rationalists make up about 12% of the Population