People often wonder why they cannot manage their finances well despite making a significant amount of money every month.

Some face the same bad financial situation even after getting a promotion at work or a salary increase.

Personal finance experts have attributed this problem to personality traits, childhood traumas, and mental awareness, among other factors.

Personality traits

Paul Nixon, head of behavioral finance at Momentum Investments, said people don’t realize that personality traits affect how they spend and save.

Personality trait refers to the consistent pattern of thoughts, feelings, and behaviors that define an individual’s personality. These characteristics shape how people perceive, interact with, and respond to their environment, others, and themselves.

Some of the personality traits include extroversion, neuroticism, introversion, optimism, pessimism, emotional stability or instability, and conscientiousness.

Personality traits can affect interpersonal relationships, career choices, coping mechanisms, decision making, and emotional regulation.

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Personality traits and money habits

Speaking at a Momentum Success Science campaign event in Sandton on Thursday, Nixon focused on two personality traits, conscientiousness and neuroticism.

He explained that conscientiousness means being more organized, so this personality trait is people who tend to think and plan for the future.

This is a very important personality trait to have when it comes to money habits because one will be able to build something sustainable for the future.

Neuroticism is associated with anxiety, being spontaneous and impulsive, and that’s not a bad thing, he said, but it’s better not to have that type of personality trait when it comes to handling money.

Because a person will live today instead of thinking about the future.

Children’s experiment with marshmallows

He used an example from the marshmallow boy experiment. This is how parents can teach their children self-control from a young age, he said, and see if they have conscientiousness or neurotic personality traits.

In the experiment, parents place a plate of marshmallows in front of their children and tell them not to eat/touch marshmallows for a certain period of time.

Nixon said the way to change one’s personality traits when it comes to money management is to be international about what they want in the future.

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Micro decisions, not macro decisions

“This doesn’t start with the macro decisions, but with the micro decisions we make every day. Instead of buying takeaways for lunch every day, save that R50 for a goal you have and pack lunch.

He said that by doing this, once you start using large amounts of money, they will have the mindset to use money carefully rather than spending it on momentary pleasures.

Nixon touched on the issue of satisfaction and said that’s how most people waste money. “Think of every money decision as a long-term investment; you know that what you get in the future is greater than what you get now.”

Is education really the key to success?

Vangile Makwakwa, founder of Wealthy Money, personal finance coach and online course creator, said she realized through personal experience that education is the key to success, just like everyone else says.

He realized how he was training for a full-time job but still in debt. “I spent my first paycheck within a week.”

He later did additional work but they still couldn’t protect him and he decided South Africa was the problem. Makwakwa moved abroad to earn more money from jobs but still could not save money.

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He realized that emotions play a big role when it comes to how one handles money. There was a point where he had a panic attack every time he had to deal with or think about money.

Wealth vs rich

Creativity and innovation expert Dr. Kobus Neethling said there is a difference between being rich and being wealthy.

Wealth is money that people cannot see, and being rich is a completely materialistic thing.

Neethling added that in most cases where people spend money on materialistic things, it is to please others, not themselves. Mostly it is to show that the person can afford it.

He said the only way a person knows if their habits are no longer working is when they have neither energy nor passion left.

“If teachers teach using habit, then they miss 73% of actually teaching children. When helping a client, you need to move from your own brain to the client’s brain. “

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