What Is Your Money Personality? (3/30)

This morning, I was sharing my PERSONAL personal finance philosophy and strategy with a friend (and vice versa), and that got me thinking about money personalities. Reading personal finance blogs, one would be tempted to think the advice should be applied similarly by everyone. It shouldn’t. The information is great, and the underlying PRINCIPLE is useful for everyone, but application should take into account our different money personalities.

For example, my friend is a good saver. He has 6 months worth of expenses stashed away in an emergency fund (something I highly recommend), he has a life cover, and an education insurance cover for his child.

I on the other hand tend to be a spender/ investor / giver. If money is in my bank account, I will find a way to have it leave the account, even if it’s by giving to a random cause. For that reason, instead of having an emergency fund, I have access to emergency unsecured credit of up to 1 year’s living expenses. I have stored my savings in the SACCO and lending “Chamas”, and a pension plan so that should I need it, I shall access it, but it is not readily accessible.
I don’t have an education insurance cover for my daughter and I don’t plan to get one. Because I tend to be entrepreneurial, the lack of control (of the returns) in an education plan does not appeal to me. Instead, I am planning to get into a long term investment, which will be utilized specifically for my LO’s higher education. I will share this in a future post.

As you can see in the two examples above, we are all different, but the basic principle remains:
– An emergency fund is supremely important, but your personality should dictate how you choose to apply this.

– Education will be a major expense for our generation of parents and we will struggle to pay our kids’ higher education. See we are getting children later in life, meaning they will demand more of us financially later in life when our earning capacity will have declined. If you are a parent, it is important to note this, then execute according to your PERSONAL personal finance style.

When you read or hear personal finance advice, learn to separate the principle from execution. Take the principle, and style the execution in a way that works for you.

What is your personal finance personality?