Did you know that most people in the United States don’t have enough cash on hand to deal with an unexpected emergency? It’s easy to think that financial instability is a problem faced only by households with lower incomes, but many Americans earning upwards of six figures a year are in the same boat.
What you earn is one factor, but honestly, it’s often what you do with your money that determines whether you can pull through a financial crisis unscathed. It also plays a role in your ability to achieve big dreams like buying a home or traveling (not to mention retiring one day).
Financial literacy is all about knowing what to do with your money.
Creating a budget, understanding debt and interest, and saving for the future are the most basic elements of personal finance. Beyond those foundations lie more complex concepts, such as building your credit score, investing, and finding the right insurance products for your lifestyle. Unfortunately, many of us are not taught about finances, leading to the misconception that money management is an inaccessible science.
In this article, we’re going to discuss how each personality type can tap into their natural strengths to improve their financial literacy.
Not sure what your personality type is? Take our free personality test to find out!
Analyst Personality Types
Architect (INTJ)
In general, Architects are rational, well-informed, and goal-driven. They may think they have everything figured out. But in the world of finances, there is always something more to learn.
For example, if an Architect is already saving for retirement (which 40% of them say they are), how can they diversify their investment strategy to build resilience and increase returns? If they are working to pay off credit card debt, how can they do so more efficiently?
Fortunately, many successful investors, financial advisors, and businesspeople have published books and regularly author articles revealing the philosophies and strategies that have led them (and their clients) to success. People with this personality type can look beyond what they already know and stretch the limits of their knowledge by tapping into the vast wealth of information that’s available online or at their local library or bookstore.
Logician (INTP)
Logicians are curious and analytical, and they have a tendency to overthink to the point of inaction. It’s common for them to struggle with their budget and spend more money than they should – and they’re also probably not planning for retirement.
Logician personality types can improve their understanding and handling of finances by putting their talent for research and investigation to use, focusing on the big picture of very specific – and personally relevant – aspects of finance.
Concentrating their studies on small, specific goals – like building up an emergency fund or paying down credit card debt – can inspire Logicians to take practical and immediately beneficial actions.
Commander (ENTJ)
Commanders are more likely than most other personality types to be financially literate. They are capable and efficient, especially when it comes to accomplishing their goals. They tend to be more comfortable working with banks for financing, and they’re likely to follow a budget. According to our “Goals for Retirement” survey, more than half of them are already preparing for retirement.
The fact that they are so set in their ways, however, can hold them back.
Commanders will benefit from dedicated time spent studying the areas of the financial world that lie outside their comfort zone. For example, maybe they’re curious about investing in commercial real estate but don’t feel comfortable enough with their knowledge to do so. People with this personality type can let both their interests and hesitancy guide them toward the aspects of finance that they should study next to reach their personal goals.
Debater (ENTP)
Despite how much Debaters value challenging norms, these intellectual provocateurs actually tend to fall in line with the status quo when it comes to personal finance. Debaters are the least likely of all Analyst personality types to stick to a budget and the most likely to admit that they spend more than they should.
To increase their financial literacy, Debaters can identify their trouble areas (consumer debt, difficulty saving money, too-risky investments, etc.) and take ownership of them. Then they should challenge themselves on the logic and justifications for their decisions.
This self-accountability can serve as the motivation necessary to research and learn the strategies that can help them achieve their goals.
Diplomat Personality Types
Advocate (INFJ)
Because they’re altruistic even when it comes to finances, Advocates are often cautious to a fault. Their challenges with money management might be fueled – at least in part – by distrust in financial industries. They tend to avoid loans, and only about 30% of them report that they’re actively preparing for retirement.
But thanks to their consistent and frugal nature, Advocates can actually accomplish impressive financial goals with a little know-how.
For people with this personality type, financial decisions are motivated by their idealism. Advocates may feel more inspired to build financial literacy if they seek out socially responsible financial counseling and banking options.
Mediator (INFP)
Because of Mediators’ inward focus, they’re unlikely to dwell on money and numbers. They tend to spend more than they should, aren’t likely to stick to a budget, and are more willing than most to loan money to their friends. And saving for retirement? It’s not their strong suit.
It might be tempting for them to say, “It’s just not part of my personality to care about those things.” And while that may be partially true, Mediators can find plenty of reasons to care by focusing on how their financial responsibility could benefit a greater purpose – their family, their art, or causes that they care deeply about.
People with this personality type will get a leg up on their finances with the advice of a professional financial advisor, who can coach them into a practical strategy that they feel good about. If that’s not an option, they can jump-start their learning by tuning in to a reputable podcast or subscribing to a personal finance blog or publication that focuses on everyday money management basics.
Protagonist (ENFJ)
Thanks to their Judging personality trait, Protagonists are more likely than most Diplomats to be on the ball financially. They deeply value the way that money allows them to make an impact on people’s lives, and they don’t shy away from the financial system to achieve their goals.
It’s important for them to remember, however, that they can’t solve all the world’s problems. Their generosity may cause them to overextend themselves.
Protagonists can build upon their financial literacy by focusing on ways to increase the social impact of their investments. Microloan programs, socially responsible investments, and alternative lending organizations can provide them with opportunities to be generous, do good in the world, and achieve their personal financial goals.
Campaigner (ENFP)
Generally optimistic Campaigners tend to have a broad financial comfort zone. They don’t mind loaning out money to friends, are likely not too concerned about saving for retirement, and don’t think much about splurging on the good life.
Original thinkers who are faithful to their ideals, Campaigners may be hesitant or downright unwilling to participate in “the system.” Saving and investing is necessary, however, if they want to afford the lifestyle that they value well past their working years. Maybe they’ll want to spoil future grandchildren or simply continue to live their best life. Either way, they’ll benefit if they start saving as soon as possible.
To strengthen their financial literacy, Campaigner personality types would do well to lean into their inherent willingness to learn. They may want to sign up for a socially responsible investing (SRI) money management seminar or free online class that can expose them to new ideas and inspire more financially responsible behavior.
Sentinel Personality Types
Logistician (ISTJ)
Frugal Logisticians tend to be guided by their need for order and predictability. They are among the personality types most likely to be saving for retirement, and they’re sticklers for their budget.
The problem is that they are prone to resisting change. This may put them at a disadvantage financially if they become inflexible in the face of constantly evolving market conditions.
To increase their financial literacy, Logisticians would benefit from looking beyond the way that things have always been done, branching out from their traditional savings account or even the advice of their old-school financial planner. They might want to investigate the different strategies floated around by less conservative investors, not necessarily to radically shake up their own financial planning but to find the ideas and inspiration needed to help them stay ahead of the curve.
Defender (ISFJ)
Defenders are pragmatic, patient, and frugal – they are happy to pass on splurges and avoid risks when it comes to money. Despite their limited spending, however, they are the least likely among Sentinels to be actively preparing for their retirement.
Even more notably, in our “How Frugal Are You?” survey, Defenders are the most likely of all personality types – by a significant margin – to say their main financial goal is to save more money, as opposed to making more money.
Defenders can benefit greatly from reaching out to a financial advisor from a trusted institution. With the right guidance, they can harness their frugality and take their savings to the next level to achieve the genuine financial abundance that will allow them to secure their future – and maybe even enjoy an occasional splurge.
Executive (ESTJ)
Executives tend to value financial literacy. With their firm faith in financial institutions, they don’t shy away from financing options and are more open to putting their money in seemingly riskier investments. They like what their money affords them and know the importance of managing it well to reach their goals.
But sometimes Executives can get too comfortable with the traditional methods that have helped them maintain their lifestyle, and their financial tactics and strategies may become outdated as a result. Simply put, they might lose sight of how to most effectively put their money to work for them.
To improve their financial literacy, Executives can benefit from staying up-to-date on the latest financial products and money management strategies. They could dedicate just an hour a week to studying current market conditions and researching the recommendations of top financial analysts.
Consul (ESFJ)
Consuls are generally the least frugal of all Sentinels, but they are not spendthrifts by any stretch of the imagination. They may not hold themselves to the strictest of budgets, but they are more likely than any of the 16 personality types to be actively preparing for retirement.
Patient and hardworking, Consuls are perfectly happy staying within their comfort zone, especially when it comes to managing their money. This can be problematic in tough economic markets where uncertainty (and watching the value of their investment accounts shrink) might cause them to panic.
Consuls can continue to build financial literacy by studying and dabbling in financial management strategies that make them slightly uncomfortable. And if they begin to feel overcome by uncertainty or stress? Consuls shouldn’t panic. They can reach out to a financial advisor for reassurance and guidance.
Explorer Personality Types
Virtuoso (ISTP)
People with this personality type have a strong tendency to avoid the dull confines of the formal financial system. Just 11% of all Virtuosos report actively preparing for retirement. This is by far the smallest percentage of any personality type.
This tendency to be put off by “the system” can potentially be overcome through a practical attitude toward financial literacy.
Virtuosos may want to consider opting into automatic systems that cover the boring parts of money management – automatic deposits into savings accounts, bill pay options, etc. Then, they can direct their attention to more appealing financial pursuits. They can do what needs to be done first and then have fun with the rest.
Adventurer (ISFP)
Adventurers are not administrators. While they have a slightly higher tolerance for routine compared to other Explorers, they still tend to shy away from formal systems of money management. Budgets aren’t their forte.
People with this personality type do have a talent for making do with scarce resources, however, and they have an eye for opportunity. This is a potential advantage when it comes to finding the motivation to build financial literacy and do more with their money.
Adventurers could probably make the most of the ups and downs that come from actively investing and following the markets day-to-day. Managing finances can be seen as a game and something to have fun with. For this strategy to work, however, money invested must be regarded as money spent. It becomes untouchable – at least until Adventurers are ready to retire.
Entrepreneur (ESTP)
Entrepreneurs are “leap before you look” kinds of people, which can be a serious disadvantage when it comes to personal finances. They’re much more likely to prefer to earn more money than save more money. They are, however, extremely rational, quick-thinking, and perceptive – all traits that lend themselves to success in money management.
Entrepreneurs can tap into their adaptability to stretch their financial literacy to new levels. First, they can maximize their earnings. Then, they would do well to automate a certain percentage of those earnings for savings and investments. Professionally guided, hands-on, experiential learning that targets the specific financial niche that they want to study might be useful for them.
Because people with this personality type are prone to taking risks, Entrepreneurs might want to consider starting out with online or real-time simulators to gain experience before putting actual resources on the line.
Entertainer (ESFP)
Planning ahead isn’t exactly a strength for Entertainers. They tend to ignore their budget, spend more money than they should, and happily loan money to their friends. Only about 24% of them are actively preparing for retirement.
People with this personality type love immediate gratification and tend to get bored easily. It can be hard for them to develop solid financial literacy when they are so distracted by friends and fun.
Entertainers can boost their money know-how by identifying the most financially knowledgeable people in their social circle and asking them how they manage their money. After finding inspiration in their friends, they might want to seek professional guidance to help them learn how to emulate the healthy habits that they’ll need to meet their goals.
Conclusion
The basics of financial literacy can be learned relatively quickly. Putting that knowledge into practice, however, can be a challenge.
Finding the right strategies that resonate with your personality and inspire you to learn, grow, and practice skills and expand your financial comfort zone is fundamental. Managing money is not an inaccessible science – you just have to find the right key to open the door.
Do you consider yourself financially literate? If so, what did it take for you to learn how to manage your money? If not, what do you see as your main challenges? We invite you to share your experiences in the comments below.