However we’d like to believe our decisions with money are rooted in practicality, social scientists are examining the central role emotions play in most financial decisions. And with the 1980′s relaxation of lending rules and regulations flooding the market with available money, this could be a cause for concern.
The BBC Lab UK’s Big Money Test explores the link between money behavior and personality. Its aim is to test the theory that how we manage our emotions under stress affects how we manage our money. Maybe what’s most interesting, is its finding that a person’s education has little bearing on their ability to make sound financial decisions.
The test found that people generally fit into one of five archetypes:
misers fear becoming penniless and have trouble enjoying the benefits of their money
spenders shop in an often uncontrolled manner, particularly when feeling low – and get a short-lived high, often followed by guilt
tycoons see money as a route to power and approval, and believe wealth will make them happy
bargain hunters feel superior when they get discounts, and feel angry if expected to pay full price
gamblers feel exhilarated when taking chances, and find it hard to stop – even when losing – as a win brings a sense of power.
The Big Money Test takes about 25 minutes, and results include advice from money saving expert Martin Lewis.
Image by Dan4th