Ever wonder why it’s so hard for some people to part with their money while others can’t seem to stop spending? The answer can be summed up in two words: money personality. Everyone has a money personality – that defining attitude that helps us decide how we use our money. While there are many types of money personalities, these can all be grouped into two main categories: savers and spenders.
Where do you fit in? Meet the personalities and see which one reflects your own money attitude.
Whether they’re putting away money for retirement or an upcoming trip, savers are patient planners who understand that all those small sums will eventually add up to something substantial. They’re also thoughtful shoppers who can resist the tug of the impulse buy.
Many savers are afraid of risks and are happy to live on a meager budget in exchange for the security of a nest egg. As a result, some savers may go too far and deny themselves the right to enjoy their money. This aversion to risk could also cause savers to lose out on investment opportunities that could actually increase the size of their nest egg.
In general, spenders are great optimists who shell out the cash or whip out the credit card confident in the knowledge that they can afford to pay for these purchases. For spenders, money is less about security and more about seeing tangible evidence of their financial success.
While spenders often have enviable lifestyles, their relaxed attitude towards money could put them at risk of spending more than they can actually afford. Many spenders know this and often feel guilty every time they go beyond their budget. Spenders who don’t save at all could also find themselves in deep financial trouble should they get seriously ill or lose their job.
Striking a balance between the two personalities
Regardless of your money personality, its important to strike a balance and find the sweet spot between being a spendthrift and a penny pincher. If you think you’re a saver who could benefit from loosening up a bit, talk to us about how you can increase your savings through investments. Knowing your money is growing is sure to make you feel more confident about spending a bit of it on yourself and on your family.
If you’re a spender, it may be time to look at putting money away on a regular basis. As a first step, look into setting up an automatic deposit into your brokerage account. Start with small amounts, gradually increasing your savings as you become accustomed to this new habit. Soon you’ll even be budgeting to save – an achievement that should make you feel less guilty the next time you take out your wallet.