Narcissists are one of the most challenging personalities to be around. Unfortunately, some of the most common narcissistic traits — grandiosity, superiority, entitlement and a lack of empathy — have been on the rise in recent years.

Even worse, these traits often go unnoticed or are ignored, particularly from people who don't know about narcissism or have other vulnerabilities such as low self-esteem.

As a psychologist who studies extreme self-involvement, I've found that narcissism is a maladaptive personality type that can impact the mental health and functioning of those who come into contact with it — especially when money is involved.

Narcissists seek power over others to feel better about themselves, and money is a tool they use to manipulate and control.

Here are the most toxic money habits that narcissists share, and how to deal with them:

1. They are secretive about their finances.

In intimate relationships, this can include being vague about their money situation, like how much they make or have saved.

By keeping you in the dark, they're able to make one-sided money decisions and control your perception of what you can afford as a couple or a family. They might say, "Let me be in charge of our finances so you don't have stress out over it."

This dynamic can happen in business, too. A narcissistic co-founder might casually tell you: "Since you're the creative genius, I'll manage the boring money stuff."

What to do: If you don't feel confident about money matters, letting a partner handle it can be an appealing offer. But it can lead to serious repercussions. Your credit score, for example, can lapse if the bills aren't being paid on time.

Always be involved and informed in any financial decision that affects you.

2. They are only generous with money in public.

To narcissists, spending large amounts of money on others can be a way to get people to like them. They may be stingy in private, for example, but cover dinner for colleagues or give gifts just for show.

This experience can be both isolating and frustrating for the person closest to the narcissist because the outside world's perception isn't the reality.

Imagine a husband driving home after an expensive dinner with friends that he insisted on paying for, and then listening to him angrily talk about the "freeloading guests."

What to do: Having a self-serving narcissist in your life can be mentally exhausting. To stay sane in this relationship, get comfortable working through your feelings in a journal or with therapist.

You might even find that the best solution is to set strict emotional boundaries, or exit the relationship altogether if they are unwilling to change.

3. They skimp on the essentials.

Narcissists can be grandiose when it comes to self-serving, unnecessary spending (i.e., buying a designer watch they can't afford), but skimp on the essentials (i.e., food, health expenses, basic household items).

As a result, those in an intimate relationship with them may have to quietly save money so they can take care of themselves. This is what I call the "narcissistic survival skim," and I see it all the time. As awful as it may be, it can feel much easier than having an argument with the narcissist.

This behavior pattern is also prevalent in business. Think of a founder or CEO who barely pays their staff, but uses company funds to fly first class and book luxury hotels.

What to do: Given their self-serving mindset, it's difficult for narcissists to recognize or identify with the feelings and needs of others.

If this dynamic is impacting your ability to put food on the table or effectively run a business, have an honest conversation with them. Then take a step back and reflect on whether the relationship is worth holding on to.

4. They are hypocritical.

Narcissism and hypocrisy go hand in hand because hypocrisy is a form of entitlement.

Most narcissists believe the rules don't apply to them, even though they are quick to enforce them on everyone else. This goes for many types of rules, including budgets.

A narcissistic partner may spend freely on themselves and regularly blow your joint budget, then turn around and criticize you for spending more than they deem necessary.

Imagine a colleague who constantly takes her direct reports to fancy dinners but criticizes you for occasionally eating out for lunch.

What to do: Based on my experience, calling a narcissist out is rarely productive; they will try to turn the focus to you. Keep records of inequitable or reckless spending in case you need that information for legal purposes down the road.

And remember, you're entitled to your part of the budget. A narcissist's sense of financial fairness is usually out of sync with what's actually right.

5. They are punitive with money.

Narcissists often use money as a tool for punishment. They may reward you financially when you do what they want, and then withhold money when they feel vindictive. This can feel unsafe, degrading and confusing.

For example, they may plan a luxurious vacation for your birthday, and then after an argument will refuse to pay for essential expenses. You may even feel obligated to play their game just to keep the household or business running.

What to do: Be prepared for this dynamic and have some funds set aside for basic expenses. Knowing it is likely to happen will help you come up with strategy for managing — or exiting — the situation, instead of feeling blindsided.

Dr. Ramani Durvasula is a psychologist, professor of psychology at California State University, Los Angeles, and founder of LUNA Education, Training & Consulting, where she educates individuals and businesses on the impacts of narcissism on mental health. She is also the author of "Don't You Know Who I Am: How to Stay Sane in the Era of Narcissism, Entitlement and Incivility" and "Should I Stay or Should I Go: Surviving a Relationship With a Narcissist." Follow her on Twitter @DoctorRamani.

Don't miss:

• There are 3 types of employees. Here's the rarest one—and why psychologists say they outperform everyone else
• 5 psychological tricks that will make you look and feel more confident, according to a psychotherapist
• A psychotherapist shares the 3 exercises she uses every day 'to stop overthinking'

Sign up now: Get smarter about your money and career with our weekly newsletter