What’s your financial personality type? Take this quiz to find out – and get advice tailor made for your approach to your finances.
A. You receive a R10 000 bonus. What do you do with it?
- Immediately put it into a long-term investment.
- Save R6 000 and spend the rest on a big treat for myself.
- An opportunity like this doesn’t come along every day. I buy some things I’ve been dying to own.
- I put it in my bank account and try not to think about it. I’ll do something with it someday.
B. It’s a friend’s birthday. The gift you want to buy her is quite expensive. What do you do?
- Buy her something else that’s within my budget.
- Ask a couple of friends if they want to chip in so we can get her something great.
- She’s a good friend. Why should I hold back? I buy her the gift.
- I look around for alternatives and end up buying her three small things that cost more than the original item.
C. It’s a week before the end of the December holidays and you’ve almost blown your budget. What do you do?
- This would never happen. I stick to my holiday budget.
- I put the brakes on and find ways to enjoy the rest of my holiday that don’t involve spending.
- It’s the holidays. I deserve to have fun! So, I pull out my credit card. After all, what’s a little (more) debt?
- 4. I try to work out how I spent all that money, so I can stop doing it, but I’m not really sure how it happened. I go out for lunch.
D. You need a new sofa, but you don’t have enough money saved. What do you do?
- I consider whether I really need a new sofa. Then I work out how much extra I need to put into my short-term savings for six months until I have what I need.
- I compare the interest rates from the store, my credit card and my bank. A bank loan works out much cheaper, so I take a little money out of savings, and borrow the rest from the bank.
- The monthly instalments on a credit plan don’t sound too bad. I grab three months’ bank statements and head on over to the store’s financial services to buy the sofa right away.
- I don’t like going into debt, but I am not sure I’d ever manage to save enough either. I’ll probably live with my old sofa until it collapses under me.
E. You need a new cell phone. What do you do?
- I really need a new cell phone, so I dip into my short-term savings and buy the cheapest one that meets my needs.
- I agonise about whether to renew my contract or keep my old phone and go onto pay-as-you-go. In the end, I settle on a new phone, on contract.
- The people at the store are so nice to me! I listen to their advice and take a great deal on the newest, best phone on the market with 5GB free data!
- I don’t buy a new phone. It’s just too much to deal with. Half my screen is cracked and barely lights up, but I can still make calls when I need to.
F. What’s your savings approach?
- I save 20% of my income, and have short-term, medium-term and long-term savings in various savings accounts and investments. I also have an emergency fund that amounts to three months’ salary.
- I have a retirement annuity, and a small emergency fund, and I try to save up for short- to medium-term expenses, but it’s hard to tick all the boxes every month.
- My savings approach is to use my credit card and then try to pay it back!
- If I have extra money, I put it in my bank account and try not to spend it. I don’t really have a plan.
G. What is your approach to debt?
- The only debt I ever consider is for financing large assets or education. So, I have a home loan, but I do my best to pay back extra each month to reduce the term of my bond significantly.
- I have a bond and car finance, obviously, and I sometimes also buy clothes, furniture or technology on credit. But I am pretty good at paying it back in full before I go into debt again.
- If I didn’t go into debt, I’d never get anything done. It’s a struggle paying it back every month, though.
- I don’t like to go into debt, but sometimes it’s necessary to get to the end of the month.
H. You get a provident fund pay-out when you leave your old job. What do you do?
- I immediately transfer it into a provident preservation fund. It’s my retirement money and changing jobs doesn’t change that.
- I cash out a portion to pay back some credit card debt but put the rest into a provident preservation fund. I can always catch up the difference later.
- Farewell bonus party! I buy myself some treats and spend the rest on a few necessities. After all, I need a new wardrobe for my new job, don’t I?
- I put the money into my savings account for a rainy day. One day I’ll get some advice on what to do with it.
I. A friend from overseas is in town, and all your mates are planning a get together at a restaurant. Only problem? You’re flat broke. What do you do?
- Suggest a picnic and all bring a dish and a bottle of something.
- Tell my friends I’ll come, but I’m flat broke, so I’ll just have a starter.
- Put it on the credit card. It’s not every day we see our overseas friend and she deserves to be celebrated in style.
- I go along and when the bill comes I let them know I’m broke and hope that someone will offer to foot my bill.
J. What do you have in your insurance portfolio?
- I have life, disability, dread disease and income protection insurance, as well as cover for all my assets, including my house and car. I get competitive quotes annually.
- I have all the insurance I should, I think. I probably need to update my policies to cover my new income because I haven’t chatted to my broker in a couple of years.
- I have insurance on my car, obviously. But I haven’t really bothered with household insurance. I’m not covered for life or disability. It’s expensive, and I’m sure I won’t need it.
- I might get life cover one day, but I haven’t really thought about that yet. I don’t like to dwell on negative things.
Mostly 1s: The hoarderYou certainly know all the best practices for spending, saving and investing. You have an emergency fund and long- and short-term savings, all the insurance you need, and retirement has been neatly planned out. You consider every decision in terms of the impact it will have on your finances and are firmly focused on your future… your very distant future…
Advice: While you are unlikely to ever find yourself in any kind of financial trouble, you might be a little too rigid in your approach to your finances. Your concerns about the future could be stopping you from enjoying your life in the here and now. No-one’s saying that you should take on piles of debt, or plough through your emergency fund, but perhaps you could factor in a few more treats in the short term.
Mostly 2s: The balanced saverWhile you know exactly what you should be doing to keep your finances on the straight and narrow, you deviate from the path from time to time. You don’t save up as much as you probably should, and you do go into debt here and there, but overall, your finances are in good shape.
Advice: You live a good life, but you aren’t neglecting your future. However, be sure that you are maintaining the balance, reducing debts over time, and not over-spending on luxuries. Also, have a conversation with a financial advisor to make sure that you are on track with retirement and investment planning.
Mostly 3s: The spendthriftYou just wanna have fun. You spend until you’ve got nothing left, and then you go into debt, so you don’t have to stop. The problem is that now you spend too much of your monthly income paying back your debts and there’s not enough left over for spending. So, you take on more debt. You know this isn’t sustainable in the long term, but you don’t know how to stop.
Advice: You need to take a long hard look at your financial outlook right away. See a financial advisor and take their advice. Credit isn’t free money, and as you’re already finding out, paying it back is horrible. Try to work out what need you have that spending fulfils and try to find other ways of feeling good about yourself.
Mostly 4s: The money-avoiderYou just hate that money is A Thing. You wish you didn’t have to be bothered with all the admin that it involves. You worry about how you’re ever going to make sense of it all, but not enough to actually do something about it. You don’t generally overspend, but in a crisis, you probably don’t have any savings or emergency fund to turn to, and you probably don’t have the insurance you should have either.
Advice: Unfortunately, money is A Thing and we all have to take responsibility for how we earn, spend and save it. It will take a bit of effort on your part, but if you see a financial advisor and set up some debits into savings and investment accounts so that you “pay yourself first”, you can then go back to not thinking about money, but you won’t have to worry about it either.