How does money make you feel? Do you want to spend it as soon as you get it, or do you scrimp and save every dollar?
These are some of the most important questions I ask every new client who walks through my door. Knowing what personality type I’m working with is so important as a mortgage broker. A major part of my job is educating clients about money. Particularly when they’re about to take on the biggest financial commitment of their lives. Some clients come in with a rate in mind or a particular lender. That stuff comes later on in the piece. The first step is the understanding their relationship with money.
While credit reports give us some clues, nothing beats a simple test to better understand the sort of relationship people have with money.
Whenever I first sit down with a new client, I give them a quick personality test by asking them to rate themselves on a scale of one to 10: one being the most undisciplined and 10 being an absolute cheapskate. Often with couples we’ll get a mismatch, with one partner scoring a three and the other rating themselves an eight. That’s when things get interesting.
The whole point of a personality test like this is to identify the type of client I’m about to enter a professional relationship with. Before our relationship begins, I need to know what their relationship is with money. From here we can factor in lifestyle choices when structuring their home loan.
For example, a client who scores a three or four will need to splash out every now and then to feel good. There’s nothing wrong with that, it’s just their personality type. It’s no use structuring their home loan to be paid down as quickly as possible with zero flexibility when they are accustomed to going on holidays, buying new clothes and enjoying themselves.
On that same token, people who are natural savers and enjoy the discipline of being financially conservative will require a different approach; they may not need the same level of flexibility.
Our personalities are what make us unique and they develop from an early age. During this lockdown we’ve been fortunate to spend much more time with the kids, playing board games like Monopoly. It’s fascinating to see the different personalities emerge: one of us will want to buy every property they land on; another will be calculated in their investment decisions. One of us will keep their money neatly organised and the other will have it in a big messy pile.
The next time you play Monopoly with your friends and family, take note of the different personality types around the board. Which one are you? What number would you give yourself on my personality scale?
