Spender vs Saver – Which One Are You?
Spender vs saver: which one are you? If you have ever wondered about the answer to this question, you are in the right place. Many different reasons impact the way we think about money. When it comes to money, there are generally two types of people. Some are those that prefer to save. Then some prefer spending.
Of course, nothing can be strictly binary. Most of us are a combination of savers and spenders.
However, it is still valuable to evaluate our personalities and figure out which side we lean towards so we can make the right changes if need be. This article will look at the differences between spenders and savers. It will also help you evaluate which one you are by a series of questions.
Table of Contents
Spender vs Saver: What are the Differences?
The first thing that is different between spenders vs savers is their mindset. Our money habits are largely influenced by our psychology in addition to cultural factors.
Spenders usually derive a lot of pleasure from spending money while savers are happy when they save up. This is because spenders often treat money as a means to an end. On the other hand, savers look at money as a tool to accomplish bigger financial goals.
Savers are the kind of people that will go to great lengths to make sure that they have money set aside. They never pass up on an opportunity to save. Even if it translates to them living below their means or being frugal.
Further reading: Financial Habits That Will Change Your Life
Characteristics of savers
In general, savers:
- Veer away from spending
- Fear of spending money
- Live debt-free
- Do not spend even when needed
In contrast, spenders believe that there is no point in having money if you don’t enjoy it. Hence, they prefer to live in the present and get the most out of their money right here, right now. They often don’t deny themselves of the pleasures that a saver normally would.
Characteristics of spenders
- Take pleasure in buying things
- Have the inability to delay gratification
- Live in debt
- Are impulse buyers
Dealing with money is an inherent part of all of us. Everyone is going to be different in how they deal with it. However, our goal should be to reach a middle ground. You shouldn’t be too frugal or too extravagant.
How All This Can Impact Your Life
Whether you are a saver or a spender, your decisions around money influence a lot more than just your finances. Savers often associate a person’s money with their status and success. Spenders, on the other hand, place more emphasis on the expensive items a person owns.
Similarly, both savers and spenders tend to gravitate toward people who have the same view of money as them. When a person buys expensive items, a spender will perceive them to be successful. This would be okay if this view stayed for others. But this thought process applies to people themselves, too.
So, if you think that expensive things mean a successful person then you will want to do the same. Even if that comes at the cost of you going into debt. Spenders often end up buying things they don’t need. Also, they frequently indulge in impulse purchases until the bills add up.
That doesn’t mean that there is nothing wrong with being an over-saver as well.
Being too frugal may help you put aside more money. But research shows that savers are less satisfied as their pressure to save money is too restrictive. Moreover, savers can often forego important things that would make their life a lot better just so they can save money.
Our goal in both cases should be to reach a middle ground. We should see the value for money when it comes to most things we buy.
Evaluating Your Financial Personality: Saver vs Spender
The following questions will help you analyze whether you’re a spender vs a saver.
Identifying whether you are a spender or a saver can show you where your financial weaknesses are. You are likely a mix of both.
How Do I Know If I’m a Saver?
- Does it feel good when you save money?
- Is it often that you think a lot about your future and retirement?
- Do you live within or below your means?
- Are you someone who has no problem downsizing your purchases?
- When it comes to finances, are you detailed and organized?
- Is managing multiple financial accounts easy for you and not overwhelming?
- Are you someone with very little, if any, flexibility in your budget?
If your answer to most or all of these questions was Yes, then you are likely a saver.
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How Do I Know If I’m a Spender?
- Do you find yourself dipping into your savings more than you contribute to them?
- Have you noticed that your savings do not last more than a couple of weeks or months?
- Do your financial goals often take a lot longer to achieve than you anticipated?
- Do you love to buy regularly?
- If you get a raise or bonus, the first thing you think about is how many things you can buy from it.
- When you go out to eat, you tend to focus more on what looks good instead of the price of the dish.
- When thinking about your future vacation, do you tend to focus on what will be fun rather than what will be in your budget?
If you answered Yes to most or all of these questions, there is a good chance you are a spender.
What You Can Do Going Forward
So, now that you have figured out whether you are a spender or a saver, what can be done going forward?
For both spenders and savers, putting a certain amount of money monthly for entertainment or fun activities is great for managing money better. This eliminates the fear of saving money and allows you to control how much you spend as well.
It is important that you keep reminding yourself to maintain a balance between your saving and spending habits. Below, we talk about a few other things you can do.
Tips If You Are a Saver
- Don’t be scared to spend now and then. If you get a bonus or make some extra money, enjoy a part of it. You can save 80% of it and enjoy 20%, and still feel good about saving.
- Think of your purchases as an investment. Instead of getting too wrapped up in your budget, pay for that dream car of yours or a vacation you have always wanted to have. Focus on the value you are getting from these experiences.
- Don’t be too rigid with your budget. Build some flexibility into it and plan for small splurges. When you put it into your budget, you won’t feel too guilty about spending money on it since it’s already built into your budget.
Tips If You Are a Spender
- Organize your money. Putting all your funds in one place is likely going to make you spend them. Not only that, but it can be confusing to get lost in a sea of purchases and transactions. Organizing your money helps you stay on target and save.
- Save a little from your windfall or bonus. Before you go on that shopping spree with your fresh bonus, take a step back. Even if it’s only 20%, saving little is better than saving nothing.
- Using automation to save. With an automatic savings plan, a portion of your paycheck will be transferred into your bank account as soon as it arrives. These kinds of savings are convenient and lead to a more steady build-up of savings because you don’t have to manually deposit funds into your savings account every few weeks.
The Bottom Line – Spender vs Saver
It can be challenging to change your spending or saving habits. Especially if you have carried them your whole life. Conclusively, it is important to remember that when it comes to spending vs saving, there are no right answers. No one method or technique is going to be superior to everything else.
In the end, it is crucial that you understand the pros and cons of your financial habits and do your best to find a healthy balance. To find that middle ground, my Financial Planner for Her and Money Planner are great starting points. These planners will provide you with the perfect blueprint that you will need to succeed with your finances and budgeting whether you are at the beginning of your journey or an expert budgeter.
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