1 What is your financial personality?
Before you start this course on money management it will be very useful for you to identify and understand your current attitude and experience when it comes to your personal finances. This review will allow you to reflect on your financial ‘personality’. It will also help you understand where you need to develop your financial skills and perhaps change your behaviour when it comes to money management.
Try this activity and then select ‘Reveal answer’ to get some feedback on each of the questions and direction to where in the other sessions in the course further information and guidance are provided.
Activity _unit2.2.1 Activity 1 What is your financial personality?
Timing: Allow approximately 10 minutes for this activity
In the blank boxes in the table, add your answers to the questions.
| Question | Answer |
|---|---|
| When it comes to money do you consider yourself a risk-taker or risk averse? | Risk-taker or risk averse? |
| Are you more of a spender or a saver? | Spender or saver? |
| Do you currently actively budget for you and/or your household? | Yes or no? |
| Do you check your bank and credit card accounts – either online or the paper statements? | Yes or no? |
| When it comes to suppliers (e.g. gas, electricity, internet) do you consider yourself a ‘switcher’ or a ‘stayer’? | Switcher or stayer? |
| Are you always looking for a better deal? | Yes or no? |
| How far ahead do you plan your finances? | Up to 1 month, up to 1 year or beyond 1 year? |
| Do you solely manage your own money or do you manage your money jointly with other people? | Solely, jointly or a mixture of the 2? |
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Answer
| Question | Answer |
|---|---|
| When it comes to money do you consider yourself a risk-taker or risk averse? | Feedback from previous Open University courses shows the majority of people consider themselves to be risk averse. Perhaps this is because people would rather keep what they have than risk losing it all in the search for higher gain. You can see, though, in the sessions on borrowing and on saving and investing that taking some risks in money management can be sensible if considered carefully. |
| Are you more of a spender or a saver? | The selection here may say much about your financial circumstances rather than your aspirations. Many people who would like to save more simply do not have the spare income to do so. Those who have more money will find it easier to save. In the session on savings and investments you can look at the options for saving money for the future and which options suit your circumstances. |
| Do you currently actively budget for you and/or your household? | Running even a basic budget makes huge financial sense as you really need a good idea of your spending versus income to avoid getting into financial difficulties. In Session 2 you will learn how easy it is to budget effectively. |
| Do you check your bank and credit card accounts – either online or the paper statements? | If you don’t, you should! You need to do this to make sure there are no wrong or fraudulent transactions, know when you’re close to your credit limit and when you need to repay. Managing your accounts supports your budgeting too – letting you know how much money you have in the bank and when you have to pay bills. |
| When it comes to suppliers (e.g. gas, electricity, internet) do you consider yourself a ‘switcher’ or a ‘stayer’? | The general rule is the ‘switchers’ are much more likely to end up on the best deals than ‘stayers’. If you have stayed with the same supplier for years you could well be paying too much for the service they provide. You will look at the benefits of switching at various points in this course. |
| Are you always looking for a better deal? | Scanning the markets and switching to cheaper deals is usually good news for your finances. You’ll find out how to search for the best deals in this course. |
| How far ahead do you plan your finances? | Always plan ahead as far as possible – even if this involves some estimations about spending and income. You should plan for up to a year ahead if you can. Working from month to month may lead to the situation where you are always worrying about money. At the very least month-to-month management may encourage inefficient decision-making – for example by the selection of the monthly payments option for services bought once a year (e.g. car insurance). |
| Do you solely manage your own money or do you manage your money jointly with other people? | This will depend on your circumstances. If you are living alone then you are very likely to be a ‘solo’ money manager. If you are in a relationship or co-habiting then at least some financial matters may be managed jointly even if you keep separate bank accounts. Living in shared accommodation may also mean some pooling of finances with others. Whatever the arrangements though, if you live with someone else, it’s best to coordinate finances to some degree so everyone’s able to pay their way towards shared bills. |