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14 Characteristics of a Wise Person

Proverbs 16:16 states, “How much better to get wisdom than gold, to choose understanding rather than silver!”

This is sage advice, but not really a prevailing attitude in today’s culture, which would seem to reward folly rather than wisdom.

Today, we often see people racking up huge bills on their credit cards to accumulate fancy stuff, take extravagant vacations, and deck out their houses in a neverending effort to keep up with the Joneses.

We see people with huge homes and expensive cars, but empty, sad hearts.

We see people on the brink of destruction due to bad decisions and bad habits.

As the proverb says, wisdom, not wealth, gets you through this life successfully. If you are a wise person, you can wisely manage your finances as well.

Characteristics of a Wise Person

That means you need to start acting like a wise person. Try emulating these characteristics of people who are wise about their personal finances and see how your life changes for the better.

1. They Educate Themselves

Educate yourself. Wise people learn the basics of personal finance, including information about budgeting, retirement accounts, mortgages, and life insurance. You can’t make solid decisions about money without a deep understanding of all of the elements involved in your finances.

2. They Are Disciplined

Wise people exercise self-control, especially on financial matters.

For example, if you’ve invested in a stock as a long-term investment opportunity, don’t panic and sell the stock based on one day of volatility.

Likewise, if you have a set budget, use discipline to stick to your budget as you walk though the shopping mall. And if you have trouble resisting temptation, try a budgeting framework that automatically curtails your spending, like the envelope budgeting system.

3. They Admit Their Mistakes and Learn From Them

People learn from their mistakes because they must live through the consequences. For example, if you’ve ever lent money to a friend or relative who wouldn’t pay you back, you’re wise not to lend the same person money again. That means admitting your mistake and resolving to change your behavior as a result. It’s not a true mistake if it serves as a lifelong learning opportunity.

4. They Are Patient

Patience is a valuable virtue when it comes to personal finances. For example, a wise person saves enough money to purchase a fun, new gadget instead of charging it to a credit card that they can’t pay off in full at the end of the month.

More broadly, wise people take their time when making important decisions, like buying a new car or a house. They also don’t buy more car or more house than they can afford. They’re patient enough to live within their means until they can afford to upgrade.

Bottom line: When you exercise patience, you give yourself a chance to properly gather information and weigh all of your options before choosing the best course of action.

5. They Take Instruction Humbly

A wise person admits that they don’t know everything. They accept the fact that other people are more qualified and more knowledgeable than they are, without dismay.

Valuing others’ opinions and knowledge makes wise people better learners. They see life as a journey, not a destination. They welcome others’ input and don’t feel entitled to a “my way or the highway” approach, even if they’re always entitled to their opinions.

6. They Can Handle Rejection and Failure

Everything we do entails some risk. And usually, risk correlates with potential reward — the greater the former, the greater the latter too.

Wise people don’t take foolish or undue risks. But they also don’t worry about rejection or even failure when taking calculated risks to advance their interests.

For example, a wise person doesn’t worry about rejection when asking for a promotion during a job performance review. A wise person takes action on side business ideas to earn passive income, without worrying about failure.

You can make it through life and maybe even do okay for yourself without ever setting yourself up for spectacular failure. But if you choose that path, your upside is probably going to be limited too.

7. They Know That They Can Only Control Themselves

Wise people don’t worry about what other people think or what other people do. They know that they can only control themselves and that what other people think rarely makes any difference.

For example, if a wise person lives in a modest house because the house was affordable and they weren’t comfortable putting their entire nest egg toward a down payment, they probably aren’t worried what the folks sitting in the fancier, more expensive homes a few streets over think about their choice.

8. They’re Not Ruled by the Bottom Line

Wisdom is better than riches. While wealth (or at least material comfort) is important it doesn’t take precedence over family, friends, and health. Wise people use money as a means to achieve their goals; they don’t see accumulating money as an end goal in and of itself.

9. They Know Their Priorities

Wise people put first things first and last things last. Sure, different people have different priorities and are entitled to live as they see fit, but what all wise people have in common is the ability to prioritize effectively and maintain those priorities amid changing circumstances. Put another way, wise people live efficiently and stay true to their principles, including the financial ones.

10. They Are Trustworthy and Steadfast

A wise person treats others as they want to be treated because they know it will help them, not hurt them. Wise people are who we always go to when we need solid advice. Wise people are who we turn to and who we trust in times of need.

11. They Make the Most of Their Relationships

Wise people understand and revere the power of networking. They don’t shy away from asking advice of successful friends and family members, and they share their successes with others. Wise people continue to learn and increase their base of knowledge, and they know this is significantly impacted by the relationships they cultivate.

12. They Don’t Live Beyond Their Means

Wise people pay their bills on time and only buy things they can afford. They’re not impulse buyers; they don’t feel compelled to spend money on items they don’t need.

13. They Don’t Pay Full Price

Wise people clip coupons, sign up for discount clubs, and shop during sales.

They’re extreme couponers who don’t mind holding up the line at the grocery store while cashiers ring up coupons.

They willingly buy half-price sweaters in the summer, and discounted sandals in the winter.

They comparison-shop online to find the best prices for big purchases

And they never, ever pay full price.

14. They Don’t Squander Money

Whether it’s a tip, winnings from a poker game, or a well-deserved bonus at work, wise people know they need to save or invest this money. Many people squander “found” money, but wise people know this money can help them achieve their long-term financial goals. Instead of wasting this money on something that won’t last or on items they don’t need, wise people put found money to work for them.

Final Word

If it’s true that you can become a wise person by emulating one, this article gives you the blueprint for success. Whether it’s gaining knowledge, putting family first, or taking risks, there’s a lot to be learned from wise people. Take a close look at your personal finances to determine whether you make wise financial decisions and how you can improve. It might just the right time for a change.

Casey Slide lives with her husband and baby in Atlanta, GA. She graduated from the University of Florida in 2005 with a bachelor’s degree in Industrial Engineering and worked for a prominent hospital in Atlanta. With the birth of Casey’s son in February 2010, she decided to become a stay-at-home mom. Casey’s interests include reading, running, living green, and saving money.