What’s your money personality? It may decide your market returns

money psychology.For instance, people whose childhood was spent in an austere home where parents struggled to make ends meet might grow up to be extremely careful with money because they don’t want to face scarcity again, said Pamarthi. “When they think of money, they get scared,” she said.

This in turn impacts how they spend, save and invest.Understanding clients' emotional map helps manage their reactions when markets move against them. “You know how they will react, how you have to calm them down,” she said.Combining this knowledge with risk profiling can meaningfully impact behaviour.

“We are able to achieve long term success with our clients because we are able to nudge their behavior a little more objectively,” said Maheshwari.It helps clients too. “The more you are self-aware about your behavior, your thought process, the more you’ll be able to think rationally,” said Brijesh Parikh, an RIA and founder of Planetwealth Financial Advisors.Money psychology is still a nascent field, and there is no standard methodology or nomenclature around it.

Individuals can also exhibit traits of multiple types.Here are some broad financial personality categories and what they mean for your money.Such people don’t like to think or talk about money, either because they find it overwhelming, or because they think money is basically evil. They leave it to someone else to manage their finances.

This could be problematic if they don’t have a grip on their financial situation. Studies have shown money avoiders make poor financial decisions and have lower net worth.It’s advisable to set aside time to check your monthly spending or account statement to know where your money goes and what your financial liabilities are, so that you are not