Skip to main content
Personal Finance

The Psychology of Spending

By December 6th, 2023No Comments
The Psychology of Spending 1620 ×

Understanding Your Money Mindset

Money plays a significant role in our lives, shaping our daily choices, goals, and overall well-being. How we approach and handle our finances is deeply intertwined with our psychology and mindset. The way we think about money, our attitudes toward spending, and our financial habits are all influenced by a complex interplay of factors, including our upbringing, societal influences, personal values, and individual experiences.

In this article, we delve into the fascinating field of the psychology of money, aiming to shed light on the intricate relationship between our minds and our money. By understanding our money mindset, we can gain valuable insights into our financial health and behaviours, identify any detrimental patterns, and ultimately make wiser and more fulfilling financial decisions that can help achieve financial freedom.

Importance of Understanding Your Money Mindset

Understanding your money mindset is essential for several reasons. It allows you to identify and replace limiting beliefs that hinder your financial success. By recognising negative beliefs and replacing them with positive ones, you can overcome obstacles and achieve your financial goals. Additionally, understanding your money mindset helps you uncover the emotional triggers behind your spending habits, enabling you to develop healthier coping mechanisms and make conscious choices aligned with your long-term financial objectives.

Examining your money mindset also helps you break destructive spending patterns and establish healthier financial habits. By identifying recurring detrimental behaviours such as excessive debt or impulsive buying, you can take proactive steps to change these patterns and improve your financial well-being. Furthermore, understanding your money mindset enables you to align your spending choices with your values, bringing a sense of fulfilment and purpose to your financial decisions. By ensuring your spending reflects what truly matters to you, you can experience greater satisfaction and contentment with your financial life.

Factors That Shape Your Money Mindset

  • Childhood Experiences and Upbringing

The way you were raised and the financial experiences you had during childhood can significantly influence your money mindset. Observing how money was handled in your family, whether there was financial stability or struggles, and the attitudes and beliefs about money that were instilled in you during your formative years can shape your financial behaviours and mindset in adulthood.

  • Cultural and Societal Influences

The culture and society you grow up in play a role in shaping your money mindset. Cultural norms, societal expectations, and economic conditions can influence your beliefs and attitudes toward money, spending, saving, and investing. For example, some cultures may prioritise frugality and saving, while others may emphasise conspicuous consumption and material wealth.

  • Personal Values and Beliefs

Your values and beliefs, independent of external influences, also contribute to your money mindset. Your beliefs about the purpose and meaning of money, your views on wealth accumulation, and your attitudes toward debt and financial risk are all shaped by your individual values and belief systems. These values can impact how you prioritise your financial goals and make financial decisions.

  • Emotional and psychological factors

Your emotional and psychological makeup can significantly influence your money mindset. Your personality traits, such as risk aversion, impulsiveness, or conscientiousness, can affect your financial behaviours and decision-making. Additionally, your emotions and psychological factors such as fear, guilt, or scarcity mindset can impact your relationship with money and your financial choices.

It is important to note that these factors interact with one another and vary from person to person, resulting in unique money mindsets for each individual. By understanding these factors and their influence on your money mindset, you can gain insight into your financial behaviours and make conscious efforts to shape a healthier and more empowering relationship with money.

How Your Myers-Briggs Personality Type Affect Your Money Mindset

The Myers-Briggs Type Indicator (MBTI) is a widely used personality assessment tool based on the psychological theories of Carl Jung. It categorises individuals into 16 different personality types, each represented by a four-letter acronym. The MBTI is designed to understand how people perceive the world, make decisions, and interact with others.

Here are the four dichotomies that form the basis of the MBTI:

  • Extraversion (E) vs. Introversion (I)

This dichotomy refers to how individuals gain energy and focus their attention. Extraverts are energised by social interactions and external stimuli. On the other hand, introverts draw energy from solitude and internal reflection.

  • Sensing (S) vs. Intuition (N)

This dimension represents how individuals process information. Sensors rely on concrete facts and details, focusing on what is tangible and practical. Intuitives are more interested in patterns, possibilities, and potential meanings, often considering the big picture.

  • Thinking (T) vs. Feeling (F)

This dimension reflects how individuals make decisions. Thinkers tend to prioritise logic and objective analysis when making choices, while feelers give greater weight to personal values, emotions, and the impact on others.

  • Judging (J) vs. Perceiving (P)

This dichotomy relates to how individuals approach the external world. Judgers prefer structure, organisation, and financial planning, whereas perceivers are more flexible, adaptable, and open to new experiences.

Curious on what personality type you fall under? Try to take the test here to find out!

  • ISTJ (Introverted, Sensing, Thinking, Judging)

ISTJs are often diligent, practical, and focused on details. They tend to approach money responsibly and systematically, emphasising saving, budgeting, and following established financial rules.

  • ISFJ (Introverted, Sensing, Feeling, Judging)

ISFJs are typically conscientious, nurturing, and value-oriented. They may prioritise financial stability and security, aiming to provide for themselves and their loved ones. They may also be inclined to help others financially.

  • INFJ (Introverted, Intuitive, Feeling, Judging)

INFJs are often idealistic, insightful, and empathetic. They may view money as a means to make a positive impact and may align their financial decisions with their values and long-term goals.

  • INTJ (Introverted, Intuitive, Thinking, Judging)

INTJs are usually strategic, analytical, and independent. They may approach money with a goal-oriented mindset, focusing on long-term investments and financial planning to achieve their objectives.

  • ISTP (Introverted, Sensing, Thinking, Perceiving)

ISTPs are typically adaptable, logical, and action-oriented. They may have a pragmatic approach to money, being open to taking calculated risks and seeking financial independence.

  • ISFP (Introverted, Sensing, Feeling, Perceiving)

ISFPs are often compassionate, artistic, and flexible. They may value personal fulfilment over financial gain and may be inclined to spend money on experiences and self-expression.

  • INFP (Introverted, Intuitive, Feeling, Perceiving)

INFPs are typically idealistic, imaginative, and values-driven. They may prioritise financial autonomy and align their money mindset with their personal beliefs and passions.

  • INTP (Introverted, Intuitive, Thinking, Perceiving)

INTPs are often curious, logical, and independent thinkers. They may approach money with a focus on knowledge and understanding, seeking innovative ways to optimise their financial decisions.

  • ESTP (Extraverted, Sensing, Thinking, Perceiving)

ESTPs are typically energetic, adventurous, and spontaneous. They may enjoy taking risks and seizing opportunities to maximise their financial gains, often looking for exciting investment options.

  • ESFP (Extraverted, Sensing, Feeling, Perceiving)

ESFPs are often outgoing, expressive, and pleasure-seeking. They may view money as a means to enjoy life and may be inclined to spend on experiences, entertainment, and the well-being of themselves and others.

  • ENFP (Extraverted, Intuitive, Feeling, Perceiving)

ENFPs are typically enthusiastic, imaginative, and values-oriented. They may prioritise personal growth and find fulfilment in pursuing their passions, which could influence their money mindset.

  • ENTP (Extraverted, Intuitive, Thinking, Perceiving)

ENTPs are often innovative, analytical, and resourceful. They may approach money with a strategic and opportunistic mindset, seeking financial independence and exploring diverse investment possibilities.

  • ESTJ (Extraverted, Sensing, Thinking, Judging)

ESTJs are typically practical, organised, and rule-abiding. They may prioritise financial stability, favouring conventional financial strategies and maintaining a structured approach to money management.

  • ESFJ (Extraverted, Sensing, Feeling, Judging)

ESFJs are often warm, responsible, and sociable. They may place importance on financial security and the well-being of their loved ones, often seeking stability and supporting others financially.

  • ENFJ (Extraverted, Intuitive, Feeling, Judging)

ENFJs are typically charismatic, empathetic, and altruistic. They may view money as a means to support and make a positive impact on others, aligning their financial decisions with their values and societal goals.

  • ENTJ (Extraverted, Intuitive, Thinking, Judging)

ENTJs are often assertive, strategic, and driven. They may have a goal-oriented approach to money, focusing on wealth accumulation, investment opportunities, and long-term financial success.


While the MBTI provides insights into personality traits, it’s important to note that individuals are complex and multifaceted, and other factors, such as upbringing, life experiences, and personal beliefs, can also shape a person’s money mindset. The MBTI can serve as a helpful tool for self-reflection and understanding, but it should not be seen as a definitive predictor of financial behaviour.

Let’s find a loan for you within minutes

Related articles

The Coffee Index 1620 × 1080px

The Coffee Index: Coffee Prices in Australia in 2023

| Lifestyle Finance | No Comments
We have gathered information on the average cost of a cup of coffee in different parts of Australia, including major cities and regional areas.
macc and sacc loans

Loan Type – SACC vs MACC

| Loans in Australia | No Comments
There are many loan types for consumers such as secured, unsecured, lines of credit, home loans, etc. However, most consumers opt for one of two…
Loan Options for Expatriates and Non Residents

Loan Options for Expatriates and Non-Residents

| Personal Finance | No Comments
Australia's strict financial regulations and unique requirements for non-residents can make securing a loan challenging for expatriates.
Rewards programs

Maximising Rewards Programs in Australia

| Personal Finance | No Comments
Leveraging loyalty programs effectively in Australia requires understanding your spending habits, aligning with programs that best suit your needs, and staying informed.