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Course: Financial Literacy > Unit 4
Lesson 1: Money personalityMoney personalities
There are different types of money personalities that people have. Some people like to save and budget their money carefully, while others enjoy spending and buying new things. It is important to understand your own money personality to help you make smart choices with your money. Created by Sal Khan.
Want to join the conversation?
- How do I become a good investor? Because right now I am a spender and want to stop spending money the moment I get it please help me with this I really need this(13 votes)
- This seems to be a personality problem. Your goal should be to become a wise manager of your resources. Asking to become an investor, when you can't manage what you already have, is reaching too far.
Make your goal "to become an effective manager of what I take in". Leave "investing it" for another day.(17 votes)
- Hi,
I am definitely a saver but I want to learn about investing and then start investing. Would you recommend any courses in khan academy/books that I can study to learn about investing-I am not looking for crazy big investments cause I am still a college students and do not have much money but I do save as much as I can.(11 votes)- Until you have your emergency fund (equal to 6 to 8 months of income) full and in an easily accessible account (not a CD or something like that), you shouldn't even consider investing. I know that when I was a college student... back when dinosaurs roamed the earth, I rarely had more than a month's income between me and destitution. So, put off investing.
By the way, it's not taught at Khan Academy, anyway.(6 votes)
- I tend to be a saver 😅
Question - what are some good ways of investing? Is it only stocks, or are there other avenues of investments?(5 votes)- I think the most common way to invest is through stocks or bonds (Vanguard has some, and Seeking Alpha has lots of stock info). These are typically through publicly traded companies that display their growth, income statements, and business model. Some, or most, will give you a dividend payment, which you can also choose to automatically buy more stocks with if you wish.
The NASDAQ website is a good resource.
I recommend Visa (V), Mastercard (MA), Amazon (AMZN), and/or Apple (AAPL), to name a few. Make sure you read up on these stocks before buying them. Look up their business model, leaders, income statements, dividends, and history.
You can also invest in gold or silver, which I personally don't think is as good as stocks. Gold and silver don't pay you dividends.
But other options include real estate, jewelry, or things like that. Hope this helps!(5 votes)
- I am by nature a saver, my wife is a spender. And I seem unable to say no to her spending. This causes a lot of tension. Any suggestions that can keep us both happy?(3 votes)
- Three words: Professional-Marital-Counseling.
Get some now!(5 votes)
- How do you save money?(2 votes)
- Keep money in your wallet, savings account, or other places to put your money in.(6 votes)
- The "replay" is not working for me. Not sure if problem is on my end or on Khan Academy's end...(3 votes)
- I neeed emer#ency h3lp(2 votes)
- Is that one of the categories from the quiz?(2 votes)
- In investing, how do you put your money "to work"? Are there specific ways of doing so?(2 votes)
- You put your money to work when you have money that you are free to lose. Otherwise, you should keep a close eye on the risks that you are taking with it, investing only when you can afford to lose everything that you have put to work.(2 votes)
- more close to saver(2 votes)
- How does investing give you more money over time?(1 vote)
- The longer you leave your money in an investment, like a stock or a bond, the more you get from it. However, if the stock goes down in value, or the currency in which the stock is valued inflates, you could lose.(2 votes)
Video transcript
- So let's talk a little bit
about money personalities, and take it all with a grain of salt. Anytime I see any of
these personality tests that try to classify you
in one way or another, I'm like, "I'm a complex human being. I have many different
facets to my personality." But they do end up being helpful for just making us reflect
on how we're behaving or how we tend to behave at certain times. So the general money personalities are the saver, the spender, the investor, and then someone who's pretty
balanced in all of the above. And maybe there's a fifth
category of the avoider. Now, the saver, and I
think I fall under this, tends to be a little bit frugal. They're good at saving money, so they bring in more money
than they necessarily spend, and that's generally a good thing, but it can have some downsides. Sometimes the saver doesn't
put as much money as they need to enjoy life. After all, what is the money
for, at the end of the day? Now, related to the saver, we could think about the investor, which I kind of view as a saver who is willing to put their
money to work a little bit more. Now, when you put your money to work, it often involves a little bit more risk. So if you're a pure saver, maybe you just like to a
little bit hoard that money, but you keep it really, really secure, while an investor maybe
takes a little bit more risk, which could be a good thing, 'cause a little bit more risk, a little bit more return, potentially, but it's also more risk, which
means you might lose some. So if you're an investor, as long as you're investing prudently, it could be a very good thing, but you have to be aware of how much risk you're actually taking on. You might be taking on too much risk. Now, the third category is the spender. You can imagine what that is. I think we've all been in
that mode a little bit. But I think you're a classic spender if you're kind of living in the moment. When you spend, you're not really thinking about how much money you
have or what your goals are. And spenders can get into
a good bit of trouble, out of all of the categories,
probably the most trouble, where they can overspend, not be able to keep up with their bills. And obviously, if you're only
thinking about the moment, you might be doing some
harm to your future self. And then you have the balancer. Now, the balancer, overall, sounds like a pretty good category. It means that you're
balanced across all of them. But even there, you might
wanna make sure that, you know, you're not prone to, maybe, indecision. "Oh, do I save, do I spend? What do I do?" But overall, it sounds
like a pretty good thing. Now, avoider is someone
who just doesn't like to think about money at all. Now, probably, spenders and avoiders might have some common characteristics. If you're a real spender, you might not wanna think
about financial literacy. You might wanna avoid thinking
about money altogether. And that's what an avoider's
doing, to some degree, is to say, "Well, let me
just not think about it. Money kinda stresses me out." And obviously, avoiders,
similar to spenders, when you just live in that moment, you can get yourself into
a little bit of trouble. So think about what financial
personality you are. Maybe you're evolving in
your financial personalities. Maybe at different moments of your life, and certain dimensions of your life, you're more of one or the other. I tend to be a spender
when it comes to fruit. I tend to be a saver when
it comes to clothing. But just think about it. It'll give you a nice framework
for how you tend to be.