How one handles money is dependent upon a multitude of factors. 

One of the primary determining factors (or at least, one of the most entertaining to speculate on) is personality. Generally, every grubby money-handler can be sorted into one of three Myers-Briggs types of money personality categories: spenders, savers, or avoiders. 

Of course, some may fall into the grey area between these categories—or take on a few traits from each. Others may lie to themselves and falsely self-categorize in order to avoid confronting the real issues they hold in money handling. In any case, recognizing how one handles their money and keeping an open mind about fitting into one or more of these categories can help determine what individualized advice should be followed to improve one’s own financial literacy.

The first money personality category that one can fall into that of the “spender.” Also known as free spirits, hedonists, or Congress, those who fit this bill tend to handle money recklessly without much regard for the long-term effects of their spending. In describing this particular type of individual, one may choose to use adjectives such as “unwise”, “immature”, or “irresponsible.” In describing themselves, “creative” or “generous” may be used in place of those adjectives. Advice to improve the financial literacy of such individuals (should they make the bold and unprecedented choice to take any) is fairly simple: breathe. Whenever it seems that the right thing to do in the moment is splurge, one must take a step back and think, Will this purchase bring me short-term or long-term happiness? Will my life really be that much improved five years from now if I buy this? Will it be worse if I don’t? Because one of the most common fatal tendencies of spenders is impulsive decision-making (and therefore spending). It is most helpful to take just a moment to think things through properly before making a decision that could strain a wallet or bury someone further in debt.

A slightly lesser-seen (or, as per the nature of these individuals, lesser-identified-with) but still-present money personality type is the “avoider.” Habits of an avoider include, but are not limited to, rarely or never checking the balance in their savings or checking account, letting unopened bills stack up on the kitchen counter, and living by the rule that if the lights still turn on and the water still comes out of the faucet (and the card is never declined), no action needs to be taken with regard to personal finance. 

This slightly solipsistic approach is harmful, however. The idea that if one cannot see, hear, or feel something (in this case, money problems), then it isn’t there, isn’t true. Eventually, one who ignores the financial aspect of their life will have to pay the consequences, whether that be simply catching up on bills or facing mountains of unexpected debt. 

The best advice for folks who operate in this manner? Stop it. Even if it takes baby steps, one must tackle finances completely and wholly. Go through every ignored receipt, bill, and dividend, leaving no stone unturned. The avoider must get a grip on that aspect of life before it turns around and strangles them.

That leaves one last category: Savers. Those who fall under this category likely know when, where, and why every dollar floats in and out of pockets. While this may be the least financially riddled group of the three, savers can still stand to make one simple change in their lives: instead of squirreling away every last penny, create a section in the budget for fun. While this may be an entirely new concept for some, “fun” money can be used for trips, eating out, or simply “splurging” on an item that one wouldn’t normally purchase.

Whether one is a spender, saver, or avoider, there are things every person can do to improve their financial literacy. Money habits tend to affect every other aspect of a person’s life, and by taking even small steps to improve them, great benefits are to be had all around.