Life talk

16 June 2020

Spender or saver: what’s your money personality?

It’s the classic Harry versus Voldemort, Rocky versus Drago, PC versus Mac… spouse versus spouse… Okay, we’re getting a little close to home here. Opposites attract, then they attack!

For me, I love spending money. If I need something new, I will be on the hunt for the best version of that thing, which usually comes with a juicy price tag. Who doesn’t love spending money, right?

Savers. Savers can struggle to spend money. If they have a hobby or interest, they will research the crap out of it, think about it for weeks or months, and then try to get the best deal.

Everyone sits somewhere on the money personality spectrum, from keen spenders to squirrelling savers. Most people can answer pretty quickly where they sit, or perhaps you swing from one side to the other depending on what’s happening around you.

These money personalities (and their related spending or saving habits) are derived from somewhere in our past – something we learnt as a child or picked up along the way as we read books or began to try managing our money. Sometimes, it can be an outward sign of our inner personality. What is it for you?

There’s no right or wrong side – instead, understanding where we sit tells us how we should set up our money management system. For me, I have to quarantine my essential costs (mortgage, groceries, fuel, etc.) into separate bank accounts so I can’t spend it – because, trust me, I will! My personal system automates those expenses so I can’t snatch it and buy a new TV for the shower. Savers can sometimes have one bank account for transactions and one for savings, and their system works fine.

Whichever end of the spectrum you sit on, there are good bits and there are challenges. Here are my thoughts on both.

The spender

The good bits

  • You navigate the retail shopping space like a pro and know which items are good quality. This is actually a skill you hire out to your scared saver friends who keep buying something cheap when they could buy something of quality.
  • You have brilliant justification skills – yes, this eggs benny is a necessary part of my week because [insert answer here].
  • You probably have the most expensive, comfy-as bed linen.
  • You can be generous with your friends and family.
  • You’ve travelled the world, baby!
  • Your life is pretty exciting most of the time.

The challenges

  • You may have a huge pile of debt hiding in the darkness somewhere. ’Cause you just gotta spend, baby!
  • You may not know where your money is going – probably because it doesn’t sit still for long enough.
  • Investing for the future probably isn’t on the brain because you’re very much living for the now. But the intent is always in the back of your mind.
  • You might not be investing as much as you can be.
  • You might struggle if you go through a patch without good income.
  • Your savings just aren’t where you want them to be.
  • You suffer from lifestyle inflation.
  • You can’t do anything without spending money.

The saver

The good bits

  • You have cash on hand for literally every unexpected event on this planet.
  • You don’t need the eggs benny – you’ll just take the coffee because you ate a quick packet of oats before you left home.
  • Your card rarely gets declined at the service station.
  • You can tap away on purchases guilt-free because you didn’t just spend your last $15.
  • Doing big life things like buying a house don’t seem daunting – you’re ready to roll!
  • There’s probably money in the walls at your house (or banana stand, for those who get it).
  • You are brilliant at finding things you need super-cheap. You’ve probably got killer DIY skills, too.

The challenges

  • You have holes in your underwear. Because you NEVER REPLACE THEM.
  • You could be missing out on amazing opportunities, like travel, because you’re afraid to spend. Go on, live a little!
  • You sometime feel guilty when you buy stuff – even basic necessities.
  • You might be afraid to set goals because you’re worried about what it will cost.
  • Being generous to those less fortunate (charitable giving) or buying your friend’s meal is harder than it needs to be.

Some quick tips

Separate your spending accounts

Set up a bank account specifically for spending and transfer money to it each week from your main account. Allow for food, entertainment, transport, going out, etc. This will give the savers permission to spend guilt-free and will allow the spenders to spend without using their mind to remember it’s a capped amount. If they cap out, it’s limited to the weekly allocation in the account.

Set goals, big and small

Goals are great. A solid goal can really help a spender pause before they spend. They’ll think of the trade-off before the purchase and slow down. Big goals are usually normal for savers, but it’s important to make sure you’re not allocating every living cent to saving for the goal. You need to make sure you’re still spending some money to experience life. Try the eggs benny one day. Buy a group of friends lunch. Think about how it makes you feel. Start small.

Be an investor, not a saver

Saving money sucks. On a personal note, I’m terrible at it – because if it’s in a savings account, it’s easy for me to just spend it or give it away. When you are ready to save like a pro, make sure you have this savings account out of sight and out of mind. I’ve also had to change my mindset from being a saver to becoming an investor. I now invest my money in an investment account – and once it’s in the account, it never leaves. I don’t have this account on a phone app and there’s an automatic debit each month. This is a habit I’ve had to work on in my life. Can you become an investor?

If you still don’t know where you sit on the spectrum, try this: If you know the exact detail of your phone plan by memory, you’re probably not a spender. If you don’t think and make impulsive purchases and struggle to have solid cash behind you… well, you’re not a saver.

Don’t change who you are. Just be aware of what your proclivity for money is and celebrate it.

The article was prepared by Glen James in partnership with ING.  The views expressed in this article are provided independently by Glen James and ING makes no warranty as to the accuracy, completeness or reliability of the information, nor do we accept any liability or responsibility arising in any way from omissions or errors contained in the content. ING does not recommend any products, services or financial strategies mentioned in this article. ING strongly recommends that you obtain independent advice before you act on the content.