Do you sock away every dollar you can spare into savings, and no matter how much you have, worry you should have saved more? Or does an unexpected windfall burn a hole in your pocket, so you get a raise and immediately start thinking about what you can buy next? Do you enjoy the thrill of making a killing in the stock market, or does every little dip in the averages send you into a tailspin?
You could be sitting right next to a coworker, earning the same amount of money, and holding the same amount in savings and investments, and feel completely differently about your financial situation. That’s because everyone has their own unique money persona that is the result of specific life experiences, upbringing, preferences, emotions, and attitudes about finances.
By understanding how you feel and where you are coming from regarding finances, you can recognize and build on your strengths to make the most of your money habits. Here’s how three different fictitious people created from the feedback of financial professionals across the country can leverage knowledge of their money personas to achieve long-term financial success.
Meet Sam, a bubbly and vivacious 25-year-old, working at her first real career job at a technology company. She’s making $60,000 a year, plus bonus. Sam lives by herself in a modest apartment located in a safe neighborhood. She’s got a boyfriend but is in no hurry to get married or start a family. Like many young professionals her age, she is still paying off a student loan.
Sam’s income is more than enough to cover her living expenses right now, but she still worries about the future and tries to save money wherever she can. For instance, she drives a 2012 Hyundai her parents gave her while she was in school and makes her own lunch to eat at her desk. She sticks to a strict budget and tracks her expenses with an online app.
Sam’s main short-term financial goal right now is to save money, and she’s made real progress. She contributes enough to her company’s 401(k) plan to obtain the maximum corporate matching contribution. She also has a hefty balance in her checking account, enough to cover at least three months of living expenses.
Further out, Sam wants to buy a home. She’s been saving toward a down payment by putting away a portion of each paycheck in a high-yield savings account.
Sam is doing well, but her saver mentality is preventing her from earning the higher returns that could help her reach her goals faster. When she meets with a financial professional, they work together to identify several ways to meet her short and long-term goals.
Sam and her financial professional review her budget and savings targets. The problem is not how much she’s saving but how she is investing it. The professional suggests moving rainy day funds from her low-yielding checking account into higher-earning vehicles like a high-yield savings account or a money market fund so her savings can stay protected but still grow.
For the longer term, Sam works with her financial professional on a strategy that will allow her to purchase a home within ten years. Up to now Sam has been saving for that goal in an ultra-safe savings account that yields just under the current inflation rate. Instead, the financial professional suggests she invest her savings in a diversified investment strategy with the appropriate amount of risk based on her suitability and investor profile.
Steve is a go-getting real estate agent who just turned 32. His income fluctuates month-to-month and even year-to-year, depending on how many properties he’s bought or sold for his clients, but he’s earning anywhere from $100,000 to $150,000 per year.
Not married yet, Steve enjoys the single life, spending lots of time with friends at bars and restaurants and taking off on at least one blow-out vacation every year. He lives in a luxury apartment downtown, close to the nightlife but a little outside his price range. He doesn’t keep track of spending very consistently and is sometimes shocked to see his monthly credit card bill. But it doesn’t bother him very much. He figures he’ll just work extra hard to pay off the balance.
Steve’s feast-or-famine income means he usually runs through big commissions quickly, paying down credit cards, covering expenses, and treating himself to new purchases like the luxury SUV he cannot afford. Occasionally, he will add to his savings, but saving has never been a priority. “I’ll save when I’m older and through having fun,” he tells himself.
Steve knows he needs to pay down his credit card balances before they get out of hand, but he hasn’t set any long-term financial goals for himself.
He’s living for the moment and enjoying himself, but he admits he sometimes runs into trouble when his income dips temporarily. When he meets with a financial professional, they work together to analyze his spending habits and develop a simple budget to help keep his spending on track. They also discuss enrolling in a financial wellness program to help Steve form a better understanding of his relationship with money and spending.
The financial professional wants Steve to continue loving and enjoying life. But reducing his monthly expenses slightly by doing a few simple things, like tracking his income compared to his spending, allows him to better address debt and putting a few bucks in a rainy-day account for the leaner periods.
Steve’s financial professional also asks him to think about his long-term goals. Has he thought about starting his own real estate firm at some point? Once he and his financial professional have identified and prioritized his goals, they can help him get a handle on his spending and budget and get him on his way to achieving his firm and brokers status.
Sally has been working at a mid-sized manufacturing company since she graduated from college and now, at 44, she is an executive officer overseeing finance and administration. She is the main wage earner in her family. Her husband is a musician, who has had primary responsibility for taking care of their two daughters, now 15 and 13. Sally earns just over $300,000 per year, plus stock options, and she lives very comfortable with her family in a nice house in the suburbs.
Sally drives a mid-range SUV she bought for cash several years ago. Their biggest expense is their mortgage, and they expect to be paying it off for another ten years.
In addition to covering their living expenses, Sally has saved diligently for retirement, and she has also set aside significant assets for her children’s college education. Sally has enough income to cover extra expenses like a family trip to the Caribbean and a major remodeling project to update their kitchen.
Sally is fascinated by the stock market, and she dedicates part of her paycheck to a self-directed brokerage account. She is interested in investing in companies she purchases from but doesn’t have the full scope of knowledge to do. It’s important to her that this remains part of her overall financial picture.
Sally’s main goal is to figure out how to best reduce her annual tax burden. She also wants to make sure she is optimizing her retirement accounts since her husband doesn’t have a consistent income or traditional retirement savings vehicles.
She is also interested in helping her husband explore opportunities to earn a bit more income, without taking away from his parenting responsibilities or passion for music.
She’d also like to pay down her mortgage before she and her husband retire and build wealth to pass along to her children.
Sally is in good financial shape when she meets with a financial professional, but she is looking for ways to make her money work harder and smarter for her and her family.
Her financial professional helps her restructure her investment portfolio so the bulk is invested in a diversified mix of assets that can provide consistent returns, while keeping some in a discretionary account so she can continue to play the market independently. They also look at HSAs available to her through her company, which can help her both reduce her tax burden as well as ensure there is money set aside to cover any surprise medical expenses, knowing that her husband does not have any coverage.
Sally’s financial professional also suggests that she increase her 401(k) contributions to the maximum. Again, this allows her to grow her retirement savings as much as possible while also helping to reduce her annual tax burden.
They also discuss options for her husband including opening a small business teaching guitar lessons to neighborhood kids, and her financial professional provides her with information about some of the small business tax advantages they could use.
Because Sally is the main breadwinner for her family, her financial professional also helps her explore various insurance options that may be suited to her and her family, geared toward protecting her income should anything happen.
No matter what your money persona is, or the balance is between your healthy and challenging financial habits, there are always ways you can improve. Just as Sam, Steve, and Sally worked with financial professionals to work on achieving their goals, a financial professional can be a helpful resource for people in many different financial situations and can always help build a strategy suited for the individual.
New York Life financial professionals can work with you to build a strategy that incorporates everything from regular savings, budgeting, long-term wealth solutions, and insurance to make sure you are meeting your short- and long-term financial goals.
This article is provided for general informational purposes only. Neither New York Life Insurance Company, nor its agents, provides tax, legal, or accounting advice. Please consult your own tax, legal, or accounting professional before making any decisions.
SMRU #5770051.1 exp. 6/29/2025