When you are trying to improve your financial situation, one of the moves to make is to change the way you spend money. However, addressing the symptoms of your money choices isn’t likely to result in long-term changes. You can only go so long by denying yourself everything you enjoy before you cave.

Instead, it’s important to figure out your money motivations. Why do you spend money on the things that you buy? What do you actually want to use money for? Looking at your motivations helps you figure out how to address the problem, and to make long-term changes to your spending behaviors. Consider your money motivations, and then look at whether your spending plan matches your priorities. Once you have a clear idea of why you do the things you do with money, and what you actually hope to accomplish with your money, it will be much easier to make changes.

Your Money Personality

A little more than a year ago, I read a book called First Comes Love, Then Comes Money: A Couple’s Guide to Financial Communication. It is by the self-professed “Money Couple”, consisting of Bethany and Scott Palmer. What I found fascinating was the introduction of money personalities. The Palmers told me when I interviewed them that each person has a primary personality and a secondary personality.

Figuring out your money personality is part of recognizing why you spend money like you do. It’s integral to figuring out your money motivations. The money personalities include:

1. Spender: This is someone who loves to spend money. And it doesn’t just mean that you just spend money on yourself all the time. A spender likes to enjoy what money can buy, and to give to others. I am, in fact, a spender. I love spending money.
2. Saver: As you might imagine, a saver likes to watch the money pile grow, and is very interested in seeing how many pennies can be pinched.
3. Risk Taker: A risk taker is always ready to make a leap to improve the chances of seeing a big result. Sometimes, a risk taker doesn’t worry a lot about what’s around the corner; he or she just wants to see if something big can happen.
4. Security Seeker: This personality is all about making sure that there is a safety net in place. A security seeker wants to get his or her ducks in a row, and plan ahead.
5. Flyer: I was interested in this money personality, because it really provides a look at a type of money personality that we don’t often talk about in the PF world. This is the person who isn’t interested in money matters — at all. Doesn’t want to be bothered. Just takes things as they come, and doesn’t show any interest in financial planning.

The key is to figure out what money personality you are. I am primarily a spender, but my secondary trait is security seeker. So, even though I like using my money, I make sure the important big picture things are taken care of before I spend. Find the strengths and weaknesses in your money personality, and look for ways to balance them out.

Recognize where you might be going overboard, whether you are so concerned with safety that you aren’t taking any risks, or whether your flyer personality has you ignoring bills until the last second. Look for ways to balance your money style so that you can begin making better decisions.

What Do You Want Your Money to Accomplish?

Next, you need to look at what you want your money to accomplish. What do you want your money to do on your behalf? Do you want to donate to charity and make the world a better place? Are you trying to achieve early retirement? Do you hope to take a family vacation in six months?

Honestly evaluate what you hope to accomplish with your spending. Decide whether you want your money to help you reach certain goals, or whether you view money as an end itself, or a way to show your status. Before you spend your money, stop and ask yourself these questions:

• Why am I buying this? Show brutal honesty. Are you trying to impress someone else? Or will this purchase really enhance your quality of life?
• What will I do with this? Figure out what you will actually do with the item — and whether or not you will still use it later. Sometimes, we buy things on a whim because we think we will use it. However, a little thought might turn out to show that we don’t really need it.
• Do I actually like this? I realized a few years ago that I don’t actually like trinkets cluttering up my house. I was just buying them because they struck my fancy at the time, or I thought that I “needed” more decoration to make my house nice. When I realized I didn’t actually like them, I stopped buying them, freeing up more money.
• Will this expenditure help me reach my goals? Make sure you ask yourself if your spending is helping you toward your money goals. Whether it’s saving up for a family vacation, or preparing for a comfortable retirement, determine whether or not you are working toward your most important goals with your spending.

Understanding what you want from your money, and from your life, will help you make the changes in behavior that really matter to your finances, and that can actually help you improve your quality of life.

So, what are your money motivations?