Do the words ‘financial planning’ make you shudder?
Maybe you’re perched on the proverbial fence and haven’t given the idea much thought. Or, maybe you worry about money. Would it surprise you to know that how you feel about your financial situation can have a significant impression on your overall well-being?
A recent study by the Journal of Consumer Research suggests that financial stress can be just as impactful as the feelings around job security, relationships and maintaining one’s physical health. But what exactly is financial stress? Essentially, it refers to the way we manage current money situations, as well as expectations around financial security in the future.
It’s interesting to think that how you are as a person, and the way you broach situations can actually impact your level of financial stress and success. At Talem Wealth, we’ve helped a range of Australians–from millennials to baby boomers–to reach a positive state of financial well-being in their life stage. As financial advisers, we don’t just give out advice; we get to really know you to more deeply understand your motivations and goals. Part of this process is to understand your personality, emotions and attitude toward money.
However, over the years, we’ve identified common traits in people that can actually make them adverse to engaging a financial adviser and usually, it’s these types of clients that can get the most out of our services. Keep reading to discover your financial personality type(s):
1. The Plateauing Professional
Are you a professional working in the corporate or even financial sector? You’re most likely on a solid salary package and feeling financially comfortable. However, you might feel committed to your career. This isn’t uncommon, as Australians are doing more work hours in comparison to other nations. Currently, 20 per cent of males and 7 per cent of females are clocking over 50 hours per week. So, if you’re in this position, how do you have time to see a financial adviser? You might be questioning whether you need one at all. You hold a tertiary business or commerce degree, and you understand the fundamentals of finance. With this knowledge, you might’ve dabbled in shares trading or jumped on the cryptocurrency train. Whilst your investments are small, you haven’t really seen any major growth. Your current situation could be described as ‘comfortable,’ but a financial adviser can show you how to move your money around to make it significantly more impactful.
Strengths: Reasonable knowledge of finance, secure and prosperous.
Weaknesses: Time poor, overstretched, opinionated.
2. The Lifestyle Loader
Is your motto, ‘work hard, play hard’? If so, living the best lifestyle is important to you, right? After all, why shouldn’t it be? You’ve put in the long hours and the late nights and feel the need to reward your efforts. You might be generous with your money, covering dinner bills and assisting friends from time to time. Perhaps you’ve invested in a timeshare on a boat or updated your car recently (because you can). If you’re a spender, you’re not the only one. According to ASIC, in 2016, Australian’s spent over 80 billion dollars on recreational activities alone. Despite this, the OECD has revealed, at last count, that Australia’s household debt to income was over 200 per cent – the fifth highest in the developed world. Whilst there’s nothing wrong with spending your earnings, a financial adviser may counsel you on ways to make your money work hard for you behind the scenes, so you can maintain or even improve your overall lifestyle.
Strengths: Confident, optimistic and hard working.
Weaknesses: Flippant, impulsive and uncalculating.
3. The Early Enterer
Do you feel unready for a financial adviser? Maybe you’re younger and feel that your salary isn’t large enough to justify financial planning. It’s completely understandable that, at this moment in your life, you don’t want to spend too much time thinking about things like investing and retirement. Many Australian millennials are disengaged when it comes to managing their financial future. A report released by The Financial Services Council revealed that only 8% of millennials actually know how much money they need to comfortably retire. Additionally, the majority of young adults aren’t checking superannuation accounts frequently enough or changing their investment options. Currently, just 1 in 3 young Australians read their bank statements regularly. So, if you’re at the early stages of your career, there’s nothing wrong with getting ahead of the game. Financial planning can introduce you to manageable tactics to help build your wealth.
Strengths: Time rich, adaptable and optimistic.
Weaknesses: Apathetic, passive, uninformed.
4. The Secret Squirrel
For you, saving is your long-term safety net. There’s no issues when it comes to salary sacrificing. Putting your hard-earned dollars in the bank is easy for you, as stockpiling equals security. Do you invest? Absolutely not. The idea of gambling your hard-earned salary through investment opportunities fills you with horror and you’re probably not much of a risk taker. Having a financial security blanket there is no bad thing – especially if unexpected costs crop up. In fact, your dedication is a fantastic start. According to University of New South Wales Professor Dr Jane Earl, there’s millions of Australians that don’t have any retirement plan in place, with only 30 per cent of the population currently able to retire solely on their superannuation. Having savings is smart. However, storing your cash in a low-interest bank account is doing you no favours if you’re looking at fast-tracking your wealth. A financial adviser can share some low-risk opportunities to make your savings work harder for you.
Strengths: Calculated, prepared and focused.
Weaknesses: Paralysis by analysis, apprehensive and dubious.
Personality aside, do you want to get ahead financially?
When it comes to these personality types, don’t feel that you have to pigeonhole yourself to one. In fact, you might fall across two or three. Ultimately, it’s about being aware of how you perceive money and how this could be turning you off seeking and acting on external guidance.
At Talem Wealth, we’re the experts when it comes to providing clients with tailored and strategic advice, and we respect that everyone is different. Reach out to us for an obligation-free chat so we can get to know you a little better.