What’s your budget persona?



By Mike Braga, BDO Licensed Insolvency Trustee




Do your spending habits follow a certain pattern? 


One of the most important steps towards financial wellness is to gain a deeper understanding of your financial habits so you can manage spending and maximize saving.

Budgeting is harder than it looks: it’s about a lot more than creating spending buckets in an app or on an Excel spreadsheet! Budgeting means being able to control your spending habits and impulses on a psychological and emotional level. It requires a great deal of mindfulness.


Take our Budget Persona Quiz to gain more self-awareness of your spending habits, identifying your “budget persona” to the pattern of your financial habits will help you take a step back and think about how your financial behaviors are helping you achieve your goals.


Take our Budget Persona Quiz!

1. Would you say your behaviours around personal finance are:

A. Very strict

B. All over the place

C. Evolving

D. No idea

2. Which of the following online shopping behaviours do you identify with most?

A. I buy only what I need when it goes on sale

B. I buy what I want without consulting my budget

C. I buy what I want if I know I can afford it

D. I engage in frequent retail therapy

3. What following statements best characterize your relationship with money?

A. Money is the most important thing

B. The best things in life are free

C. Money is about ensuring your freedom

D. Thinking about money is so stressful

4. You have to buy something you need but know it’s well outside your budget, what is your first reaction?

A. I will try to convince myself that I don’t need it

B. I’ll tell myself I can cut back elsewhere and buy it with credit

C. Delay the purchase and rethink my budget

D. If I need it, I’ll buy it on credit. I don’t have any other choice!

5. Finish the following with the statement that best reflects your emergency savings. “My emergency fund…

A. Can cover more than 6 months’ worth of expenses

B. Has both cash (enough for 3 months) and includes some investments from TFSA

C. Has some savings, but mostly room on a line of credit

D. Is non-existent. I don’t have the money for it.


Add up your points:


A = 1 points

B = 2 points

C = 3 points

D = 4 points


Results:

4-6 points: “The Stickler”

You’re probably a “stickler.” You have a budget, and you’ll do anything to stick to it. In many ways, you’re doing a good job, but you probably don’t need to be worrying about money as much as you do.

Try to automate your financial life as much as possible—from budgeting to bill payments, there’s an app for it. Free up some of your energy and remind yourself that money isn’t the most important thing. Your friends and family will thank you for it!

7-10 points: “The Idealist”

You’re what we call an “idealist.” You can be overly optimistic about your finances and think you have more money than you actually do. Budgeting efforts can often fall flat because you don’t like to face your financial reality head on.

The best thing to do is to start tracking your spending. Go into your bank account online and go over your last month’s expenses. Next, calculate your debt-to-income ratio and start finding ways to unlock savings so you can plan for your future. Put your optimism to good use!

11-14 points: “The Procrastinator”

It sounds like you’re a procrastinator. You understand the need for a budget but, for many reasons, you have trouble reconciling your current spending habits with your future goals. The truth is that you need to change the way you think about money.

Our advice is to start small. Go over all your monthly expenses and ensure you’re living within your means. When it comes to debt, calculate your debt-to-income ratio and start by reducing small debts so that you gain confidence.

15-16 points: “The Architect”

When it comes to budgeting, you are what we call an “architect.” Your lifestyle and behaviours have been structured in a way that helps you avoid overspending, save money and enjoy the things you love most.

Well done! You are probably an intuitive budgeter who has, in many cases, organized their bill payments, savings goals and debt management so that they seem effortless. The next stage of your evolution is to continue automating financial obligations and maximizing your savings efforts.

Closing thoughts

Did you know that our budget personas are actually interrelated and evolving over time? In reality, we are all a stickler or a procrastinator at different points in our lives. And this is a good thing! Budgets and behaviors need to adapt to different financial situations. The trick is to be aware of your financial habits, why they need to evolve and how to point them in the right direction.


Is there a budget persona that is best? Yes and no. The architect budgeter, who isn’t constantly punishing themself for every non-essential purchase they make, who lives within a sound financial lifestyle that fosters healthy spending habits and avoids overspending is surely a goal everyone can aspire to. But it can take some time to get there. And there are times in life when you might need to micromanage your spending, and that is OK too.


The key is self-awareness!

If you want to learn more about how Cyno can help your company, book a call with us!