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There are 5 different financial personalities. Which one are you?
What does your money personality say about how you save (and spend) money?
- There are 5 major financial personality types: big spenders, savers, shoppers, debtors, and investors.
- Your money personality explains why you spend (and save) money the way you do in your day-to-day life.
- Knowing your money personality can help you understand how to make your money work for you, how to save more, and overall how to make smarter financial choices.
The 5 Money Personalities
Which money personality are you?
Image by Sira Anamwong on Shutterstock
As human beings, we have a lot of things in common. You don't have to look further than your family or friend group to know that how we spend (or save) money is not one of them. According to Investopedia, there are generally 5 money personality types, each with its own outlook on finances and way of doing things. Because of these differences, there is no real one-size-fits-all approach for making better financial decisions. Luckily the experts have shared tips for each of the unique group. But first, here are the classifications:
The Big Spender
Big Spenders like to make a statement with their purchases. They are not necessarily materialistic, but they do place a high value in their possessions, often wanting the latest and greatest releases - the latest smartphone, brand-name clothing, high-end vehicles.
Big Spenders are comfortable spending money and would take a big risk on investment if there was a chance it could make them more money. In fact, the act of spending the money that they work hard to earn is one of the things that they enjoy doing the most, even if it adds to their debt.
Savers are the exact opposite of Big Spenders. Spending money makes them feel uncomfortable, they always shop for bargains, and they try to save money wherever they can. Savers may very rarely use credit cards to make purchases (or they may not even have a credit card).
Savers are often viewed as "cheap", but this isn't always the case. Savers are generally conservative with the things they purchase and don't tend to take big risks on investments just in case they don't pan out.
Shoppers often develop emotional ties to spending and receiving money. Their mood often dips and increases with their bank account. Shoppers find it particularly difficult to resist spending their money, even if they are buying items they don't need.
Shoppers aren't totally clueless about their debt, they may even be aware of the debt they are incurring but can't seem to separate their emotions from their spending habits.
Debtors don't seem to have emotional ties to their finances. They don't spend to feel better or feel low when they see a low bank balance, they simply don't spend much time thinking about their financial situation.
Debtors may be aware they have debt but may not keep track of what/who they owe. Debtors usually spend more than they earn on a consistent basis, meaning they are constantly at a level of debt even when they feel they are "cutting back."
Investors are extremely future-orientated and are consciously aware of their finances, often taking advantage of investment opportunities after carefully weighing their options. Investors typically pay their bills on time, and their spending actions are driven by choices they have given quite a bit of thought to.
Any investment the Investor takes is with the end-goal in mind of earning more money, having better credit, or some other future goal.
How to save more money, according to your financial personality
With every money personality comes a different way you can save!
Photo by Myimagine on Shutterstock
Big Spenders: Some of the best things in life are (close to) free.
If you enjoy spending money and have an income that can support your spending habits, you may be missing out on some of the finer things in life by constantly chasing the finer things in life.
Consider some fun alternatives to the high-end purchases or splurges you typically make every month. Find a balance between a spending a lot on things you may not need and spending a little on something that will bring real quality and happiness into your life.
An example of this would be choosing to spend $2000 on a jacuzzi for your back yard instead of spending $300 per month visiting a spa where you use their jacuzzi. It doesn't necessarily have to be about saving money, but it can be about spending less where you can. You may be surprised just how much savings this will lead to in the future.
Savers: Consider quality of life compared to your savings accounts.
Savers are unlikely to fall into financial ruin because they are usually prepared for the unexpected. However, savers tend to put off purchasing things that can make their lives easier (or, in the long run, save them money) because of the price tag.
An example of this could be splurging on a new dishwasher, replacing the old one (which you had to run multiple times to get the dishes clean) with a new one that can save you money on your electric and water bills.
Shoppers: Attach emotion to saving money instead of spending it.
People who consider themselves as shoppers should consider trying to find a balance between the things they enjoy doing and things that will serve their best interests in the future.
Your emotions drive your spending habits, but they can also motivate you to save money.
Consider what emotional value you're able to place on saving money for the future. Saving money for your children's education, your dream home, a nice vacation with your spouse – use the positive emotions that come from these future goals to channel your energy into saving money instead of spending money.
Debtors: Make saving your money as simple as possible.
The tricky thing about having this financial personality is that, if you have a good income and steady work, you may be "fine" for a long time. Your debt may not catch up with you for years, but when it does, it can create a financial crisis. Not to mention any big unexpected expense can put you in financial crisis mode because you haven't prepared for it.
Debtors should consider simple actions that allow you to save money with very little effort, such as setting up automatic deposits from your spending account to your savings account on the day you get paid.
Investors: Balance the "right now" with the future.
Taking risks on big investments that will pay off in the future can be a rush. It's also a good way to make your money work for you instead of simply working for your money, as most others do. Investor personalities should consider how to best balance savings that you can use to make nice purchases today, with investments that lock you in for a certain number of years.
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Andy Samberg and Cristin Milioti get stuck in an infinite wedding time loop.
- Two wedding guests discover they're trapped in an infinite time loop, waking up in Palm Springs over and over and over.
- As the reality of their situation sets in, Nyles and Sarah decide to enjoy the repetitive awakenings.
- The film is perfectly timed for a world sheltering at home during a pandemic.
Richard Feynman once asked a silly question. Two MIT students just answered it.
Here's a fun experiment to try. Go to your pantry and see if you have a box of spaghetti. If you do, take out a noodle. Grab both ends of it and bend it until it breaks in half. How many pieces did it break into? If you got two large pieces and at least one small piece you're not alone.
But science loves a good challenge<p>The mystery remained unsolved until 2005, when French scientists <a href="http://www.lmm.jussieu.fr/~audoly/" target="_blank">Basile Audoly</a> and <a href="http://www.lmm.jussieu.fr/~neukirch/" target="_blank">Sebastien Neukirch </a>won an <a href="https://www.improbable.com/ig/" target="_blank">Ig Nobel Prize</a>, an award given to scientists for real work which is of a less serious nature than the discoveries that win Nobel prizes, for finally determining why this happens. <a href="http://www.lmm.jussieu.fr/spaghetti/audoly_neukirch_fragmentation.pdf" target="_blank">Their paper describing the effect is wonderfully funny to read</a>, as it takes such a banal issue so seriously. </p><p>They demonstrated that when a rod is bent past a certain point, such as when spaghetti is snapped in half by bending it at the ends, a "snapback effect" is created. This causes energy to reverberate from the initial break to other parts of the rod, often leading to a second break elsewhere.</p><p>While this settled the issue of <em>why </em>spaghetti noodles break into three or more pieces, it didn't establish if they always had to break this way. The question of if the snapback could be regulated remained unsettled.</p>
Physicists, being themselves, immediately wanted to try and break pasta into two pieces using this info<p><a href="https://roheiss.wordpress.com/fun/" target="_blank">Ronald Heisser</a> and <a href="https://math.mit.edu/directory/profile.php?pid=1787" target="_blank">Vishal Patil</a>, two graduate students currently at Cornell and MIT respectively, read about Feynman's night of noodle snapping in class and were inspired to try and find what could be done to make sure the pasta always broke in two.</p><p><a href="http://news.mit.edu/2018/mit-mathematicians-solve-age-old-spaghetti-mystery-0813" target="_blank">By placing the noodles in a special machine</a> built for the task and recording the bending with a high-powered camera, the young scientists were able to observe in extreme detail exactly what each change in their snapping method did to the pasta. After breaking more than 500 noodles, they found the solution.</p>
The apparatus the MIT researchers built specifically for the task of snapping hundreds of spaghetti sticks.
(Courtesy of the researchers)
What possible application could this have?<p>The snapback effect is not limited to uncooked pasta noodles and can be applied to rods of all sorts. The discovery of how to cleanly break them in two could be applied to future engineering projects.</p><p>Likewise, knowing how things fragment and fail is always handy to know when you're trying to build things. Carbon Nanotubes, <a href="https://bigthink.com/ideafeed/carbon-nanotube-space-elevator" target="_self">super strong cylinders often hailed as the building material of the future</a>, are also rods which can be better understood thanks to this odd experiment.</p><p>Sometimes big discoveries can be inspired by silly questions. If it hadn't been for Richard Feynman bending noodles seventy years ago, we wouldn't know what we know now about how energy is dispersed through rods and how to control their fracturing. While not all silly questions will lead to such a significant discovery, they can all help us learn.</p>
The multifaceted cerebellum is large — it's just tightly folded.
- A powerful MRI combined with modeling software results in a totally new view of the human cerebellum.
- The so-called 'little brain' is nearly 80% the size of the cerebral cortex when it's unfolded.
- This part of the brain is associated with a lot of things, and a new virtual map is suitably chaotic and complex.
Just under our brain's cortex and close to our brain stem sits the cerebellum, also known as the "little brain." It's an organ many animals have, and we're still learning what it does in humans. It's long been thought to be involved in sensory input and motor control, but recent studies suggests it also plays a role in a lot of other things, including emotion, thought, and pain. After all, about half of the brain's neurons reside there. But it's so small. Except it's not, according to a new study from San Diego State University (SDSU) published in PNAS (Proceedings of the National Academy of Sciences).
A neural crêpe
A new imaging study led by psychology professor and cognitive neuroscientist Martin Sereno of the SDSU MRI Imaging Center reveals that the cerebellum is actually an intricately folded organ that has a surface area equal in size to 78 percent of the cerebral cortex. Sereno, a pioneer in MRI brain imaging, collaborated with other experts from the U.K., Canada, and the Netherlands.
So what does it look like? Unfolded, the cerebellum is reminiscent of a crêpe, according to Sereno, about four inches wide and three feet long.
The team didn't physically unfold a cerebellum in their research. Instead, they worked with brain scans from a 9.4 Tesla MRI machine, and virtually unfolded and mapped the organ. Custom software was developed for the project, based on the open-source FreeSurfer app developed by Sereno and others. Their model allowed the scientists to unpack the virtual cerebellum down to each individual fold, or "folia."
Study's cross-sections of a folded cerebellum
Image source: Sereno, et al.
A complicated map
Sereno tells SDSU NewsCenter that "Until now we only had crude models of what it looked like. We now have a complete map or surface representation of the cerebellum, much like cities, counties, and states."
That map is a bit surprising, too, in that regions associated with different functions are scattered across the organ in peculiar ways, unlike the cortex where it's all pretty orderly. "You get a little chunk of the lip, next to a chunk of the shoulder or face, like jumbled puzzle pieces," says Sereno. This may have to do with the fact that when the cerebellum is folded, its elements line up differently than they do when the organ is unfolded.
It seems the folded structure of the cerebellum is a configuration that facilitates access to information coming from places all over the body. Sereno says, "Now that we have the first high resolution base map of the human cerebellum, there are many possibilities for researchers to start filling in what is certain to be a complex quilt of inputs, from many different parts of the cerebral cortex in more detail than ever before."
This makes sense if the cerebellum is involved in highly complex, advanced cognitive functions, such as handling language or performing abstract reasoning as scientists suspect. "When you think of the cognition required to write a scientific paper or explain a concept," says Sereno, "you have to pull in information from many different sources. And that's just how the cerebellum is set up."
Bigger and bigger
The study also suggests that the large size of their virtual human cerebellum is likely to be related to the sheer number of tasks with which the organ is involved in the complex human brain. The macaque cerebellum that the team analyzed, for example, amounts to just 30 percent the size of the animal's cortex.
"The fact that [the cerebellum] has such a large surface area speaks to the evolution of distinctively human behaviors and cognition," says Sereno. "It has expanded so much that the folding patterns are very complex."
As the study says, "Rather than coordinating sensory signals to execute expert physical movements, parts of the cerebellum may have been extended in humans to help coordinate fictive 'conceptual movements,' such as rapidly mentally rearranging a movement plan — or, in the fullness of time, perhaps even a mathematical equation."
Sereno concludes, "The 'little brain' is quite the jack of all trades. Mapping the cerebellum will be an interesting new frontier for the next decade."
What happens if we consider welfare programs as investments?
- A recently published study suggests that some welfare programs more than pay for themselves.
- It is one of the first major reviews of welfare programs to measure so many by a single metric.
- The findings will likely inform future welfare reform and encourage debate on how to grade success.
Welfare as an investment<p>The <a href="https://scholar.harvard.edu/files/hendren/files/welfare_vnber.pdf" target="_blank">study</a>, carried out by Nathaniel Hendren and Ben Sprung-Keyser of Harvard University, reviews 133 welfare programs through a single lens. The authors measured these programs' "Marginal Value of Public Funds" (MVPF), which is defined as the ratio of the recipients' willingness to pay for a program over its cost.</p><p>A program with an MVPF of one provides precisely as much in net benefits as it costs to deliver those benefits. For an illustration, imagine a program that hands someone a dollar. If getting that dollar doesn't alter their behavior, then the MVPF of that program is one. If it discourages them from working, then the program's cost goes up, as the program causes government tax revenues to fall in addition to costing money upfront. The MVPF goes below one in this case. <br> <br> Lastly, it is possible that getting the dollar causes the recipient to further their education and get a job that pays more taxes in the future, lowering the cost of the program in the long run and raising the MVPF. The value ratio can even hit infinity when a program fully "pays for itself."</p><p> While these are only a few examples, many others exist, and they do work to show you that a high MVPF means that a program "pays for itself," a value of one indicates a program "breaks even," and a value below one shows a program costs more money than the direct cost of the benefits would suggest.</p> After determining the programs' costs using existing literature and the willingness to pay through statistical analysis, 133 programs focusing on social insurance, education and job training, tax and cash transfers, and in-kind transfers were analyzed. The results show that some programs turn a "profit" for the government, mainly when they are focused on children:
This figure shows the MVPF for a variety of polices alongside the typical age of the beneficiaries. Clearly, programs targeted at children have a higher payoff.
Nathaniel Hendren and Ben Sprung-Keyser<p>Programs like child health services and K-12 education spending have infinite MVPF values. The authors argue this is because the programs allow children to live healthier, more productive lives and earn more money, which enables them to pay more taxes later. Programs like the preschool initiatives examined don't manage to do this as well and have a lower "profit" rate despite having decent MVPF ratios.</p><p>On the other hand, things like tuition deductions for older adults don't make back the money they cost. This is likely for several reasons, not the least of which is that there is less time for the benefactor to pay the government back in taxes. Disability insurance was likewise "unprofitable," as those collecting it have a reduced need to work and pay less back in taxes. </p>