Welcome to the first blog post of: Podcast of the Week. Thanks for taking an interest! In this blog post we discover how your personality affects your finances. This can help you determine your financial personality, and act based on that. Besides, for other podcast recommendations, check out the Podcast of the Week page.
The first podcast episode one that I recommend is from the Afford Anything Podcast. This show is run by Paula Pant. She interviews experts from many fields about decision-making, productivity, mastering your career, money and life. Her articles and podcast episodes revolve around mastering money to set yourself free, by adjusting your behavior accordingly.
I have been listening to Afford Anything for just over a year. What sticks out the most for me is the critical questions she asks. By doing this she gets to the core of the experts perspective. In essence, this leads to a deeper understanding for the listener.
Why do I recommend this podcast episode?
This podcast episode zooms in on personality. It’s about how personality traits affect behavior, thoughts and feelings. Understanding yourself will help you to better manage different scenarios. How? you may ask. That is what this podcast episode aims to answer. Paula interviews Dr. Sarah Stanley Fallaw. She is the founder of Data points and has a Ph.D. in applied psychology.
The podcast makes use of the Big 5 personality traits to define a financial personality. The Big 5 Personality Traits are, including a short description of the scale. This helps to better understand the podcast. To enumerate, I have listed the big 5 personality traits:
Conscientiousness: High: Disciplined, careful, deliberate. <> Low: disorganized, impulsive, careless.
Agreeableness: High: straight forward, complying, altruistic. <> Low: skeptical, stubborn, unsympathetic.
Neuroticism (emotional stability): High: vulnerable, anxious, mood shifts. <> Low: calm, emotionally stable, resilient.
Openness to Experience: High: creative, imaginative, unconventional. <> Low: predictable, dislikes change, traditional.
Extraversion: High: sociable, outgoing, likes social interaction. <> Low: prefers solitude, reflective, reserved.
The podcast goes over the different personality traits. It gives examples how they can influence your decision making, based on which side of the scale you are. It also recognizes that personality can change over time, therefore influencing you.
I like this podcast episode, because it gives concrete examples of how the personality traits can influence your decision making regarding financial decisions. Quote from the Afford Anything Website: “For example, if you’re highly agreeable, you might say “yes” to an expensive outing with friends because that’s what everyone else wants. But is it what you want?”
What are the key takeaways?
1. Your financial personality can influence behaviour and decision making.
Being aware of this helps you to be unhindered in your reasoning. It gives you a tool to handle your own thoughts and feelings, by understanding where they come from. In any event it can help to know your personality.
2. Knowing why you have a specific strategy is important.
By having a set of rules you use it becomes possible to stay the course. When the plan doesn’t unfold as you have foreseen it can be great to fall back on the why.
3. Understand how you are influenced by others.
Your behavior is likely to be influenced by others. It has an impact to different degrees, this can be positive or negative. Understanding in which way, can help you to think more critically. In particular, you can do this by making a list of who you are influenced by and how exactly.
4. Know your circle of control.
Which things can you influence directly? By knowing which things you can influence directly and which things you cannot. You can do this by writing it down, to help you put your situation in perspective. It will help you to decide when to take action and which things to spend energy on.
5. Critical incidents can change your personality traits.
Your behavior patterns and decision making can be rewired by life changing events. You can use this to your advantage, by thinking about the rewiring and function as turning point for good. To clarify, of course you can’t pick critical incidents. But by initiating change your could create them. For example:Changing jobs, doing a study or start a hobby.
How does your personality and finances relate to Know Act Invest?
The podcast relates closely to three phases of Know Act Invest. Especially the Know and Act part. By knowing your personality type with accompanying traits it makes adjusting your behavior manageable. Furthermore these two phases influence the Invest phase. After all, knowing the why it can help you to stay the course you set out to invest and reach your goal.
Datapoints blog (founder Dr. Sarah Stanley Fallaw)
Link to the afford anything podcast notes: #255: How Your Personality Affects Your Finances, with Dr. Sarah Stanley Fallaw