Discovering your ‘financial personality’
Have you ever wondered what sort of personality you have when it comes to managing money? Will knowing this help you manage money better?
ING Insurance has recently launched a website which answers these questions. It contains a test which people can complete, and in the process, learn more about how they behave with money.
The website www.myfinancialpersonality.com has been launched in eight countries in Europe, including most recently, the Netherlands.
Manage money better
The idea behind the website is that if people have a better understanding of their behaviour in dealing with financial issues, they are more likely to manage money better. Upon completing the test, and learning what type of personality they are in terms of managing money, consumers are offered some tips on how they can improve their financial management skills further.
Keep the good habits
“For a better financial future, people need to know more, but also need to be aware of how they interact with money, so they can keep the good habits and improve the ones that don’t give them the positive results they seek,” said Iulia Cirtina, communication and research specialist with ING Insurance/IM’s Brand team. “Examining the way one acts around money and the decisions they take, the so-called financial personality, is very important.”
Financial personality study
The website was based on an ING financial personality study in ten European countries in May 2012 which showed a clear link between financial knowledge and financial personality. The more financially literate, the more consumers are willing to take a risk: not a wild guess, but a calculated risk. Conversely, those with limited financial knowledge admitted to being risk averse.
With regard to taking financial risks, the study found that Dutch consumers were the most conservative (least willing to take risk) while Turkey had the highest numbers of consumers willing to take risk.
When asked how they would spend an unexpected bonus, Dutch consumers said they would save the money, Greek people said they would pay off debts, while Bulgarians were the most likely to hit the shops.
In general, most people surveyed indicated they understood they could not rely on governments and other institutions for their financial security and instead needed to take care of themselves.
Overall, the survey found there was a need for financial advice, and it also found that those with greater financial knowledge were more likely to use financial advisers.
There were interesting insights into the level of financial literacy in Europe.
Measuring financial literacy
ING measured financial literacy for the first time at the end of 2010. At that time, 80% of European consumers could be classified as having a poor/basic financial knowledge. These consumers struggle to put financial fundamentals into practice. Eighteen months later when the 2012 study was conducted, it found that 88% of Europeans were classified as having a poor/basic financial knowledge.
Need for on-going guidance
“This statistic reflects the need for on-going guidance in helping people deal with complexity in managing their money. An understanding of finance together with an awareness of how personality affects our savings and spending habits is a solid starting point to help consumers improve their lives through improved money management,” said Ms Cirtina.
“This is why ING is very committed to helping customers improve their financial education through a broad range of initiatives including this financial personality test.”