The key point to saving money can often be as straightforward as identifying the psychological reasons of why you spend. Our relationship with money can really affect our risk of financial problems. Which type of spender do you mostly identify with?
You are always looking out for a deal, with a careful and thought out monthly budget, with a large chunk of your salary going towards your savings. Thrifty savers also tend to be quite family orientated, without or without children. You may also worry a lot about the future and because of this constant worry, you tend to cut back on everything, squirrelling away anything that can be saved.
Even though you worry a lot and show extreme caution towards the future you should concentrate on building up your savings. It’s really important to think ahead and if it’s possible, consider stocks and shares for a better chance of growth. Don’t attempt this unless you have saved an equal amount of a few months salary in a savings account or ISA. Don’t completely sacrifice going out with friends or family, find other cheaper ways to enjoy life instead by using vouchers or coupons for discounts at shops and restaurants.
The mission: to go to the shop, buy a new HD TV and leave.
You are a shopper-on-a-mission type person, with only purchasing items when you really need them. You don’t shop often, but when you do it’s with precision of knowing where you need to shop to find that particular item. You tend to save most of your income for those big one-off purchases.
Even though you know exactly what you want to buy, do some research first through price comparison sites to get the best deals for that product. If that product price has increased, don’t buy it on an impulse, think it over and decide whether it fits into your budget. Being a targeted spender shows that you are already patient enough to save. Make long-term and short-term saving goals, so you aren’t saving for the sake of saving.
The Impulse Buyer
You either can’t walk down the street without buying something or live by a see it, want it, buy it mantra. This is the most destructive type of shopping as the impulse could lead you into spiralling debt before you know.
To curb your impulses, don’t use a credit card, use cash that you’ve withdrawn from your account. By using cash, you are forcing yourself to think about just how much you’re spending. Another option for you might be to use a prepaid card, which allows you to set your spending limit according to your budget.
You really enjoy spending, gaining enjoyment from the experience as much as actually buying products. You are also known as the person who has everything. Serious spenders tend to be secure in their jobs and also take advantages of bargains but prefer to carry on spending. Even increasing the amount of their income on holidays, luxury goods and even gym memberships.
Everything might be going really well, but be aware that your position could change so it’s essential to still have some control over your spending. Making a budget sounds boring but having an overview of all your transactions; incomings and outgoings will act as a guidance for you to see which areas you could trim down on if your circumstances were to change. In extreme cases, you could open a fixed rate savings account that allows you to deposit money but doesn’t allow you to withdraw any until the end of your chosen term.
What else matters?
Age and gender play a big part to how you spend your money too. Often, young adults are the worst at looking after their money as they are less likely to plan ahead. Whilst everyone is different, women on average have a tendency to be more generous in their spending than men but on the other hand, women were also more prone to retail therapy and to worry about how much they have spent. For men, money was seen as a freedom status, with the capabilities to achieve goals.