SPENDING HABITS: SAVERS VS. SPENDERS

When comparing individuals and their financial habits, it often comes down to dividing people by what they are. Are you a spender? Are you a saver?

Savers tend to be only willing to use the money they have in their pockets. Spenders, on the other hand, are more likely to max out their accounts/cards. Is one option better than the other? This really depends on a variety of factors, including your viewpoint on life. Do you live in the moment and not worry about the future, or are you planning for some big years to come?

Habits of the saver

One of the best ways to determine which you are, or which you want to be more like, is to look at some of the habits of each individual. As a saver, you are more prone to the following in financial situations:

• You choose the lowest priced options on menus when you go out to eat, if you go out to eat at all.
• You are more likely to buy foods that are priced lower; you know how much the foods you want and need cost at most locations, so you can often find the best deal.
• You are more inclined to have a retirement plan that’s being added to on a regular basis.
• You’re less likely to pay full price for top-brand clothing and prefer to keep a clothing longer.
• You like to plan. You don’t like to have to purchase items at the last minute. You want time to find the best deal.

The saver is more likely to put money aside for a rainy day. In addition, many are less inclined to use credit cards or borrow. Savers don’t feel like they aren’t getting what they want. And, they take pride in knowing they have money in the bank, and that means a financial security blanket.

Habits of the spender

Spenders are significantly different. And, though it may seem that spending money is a bad thing, that’s not necessarily true. The following are some examples of how spenders react in various lending situations:

• You are more likely to not plan for meals, and you stop while you’re on-the-go when you need to.
• You are more willing to buy something you want or need right away instead of waiting.
• You feel confident in your ability to get what you want; you don’t think twice about buying that new gadget as soon as it is released.
• You are more willing to take risks, including with investments.
• You may not put away as much as you could for retirement.
• You aren’t necessarily stressed out about money.

The spender has the possessions he or she wants. That may mean they get to enjoy the things they like more readily. Additionally, you are more spontaneous and less likely to hold back when it comes to making financial decisions. And, that may mean you have some great memories that may not be considered the most frugal decisions.

Which is best?

Should you be a spender or a saver? The question can be a hard one to answer, mostly because there isn’t one way that’s better than the other. You’ll need to make wise decisions that fit your lifestyle. Keeping that in mind, there are a few things you can do to ensure you are being financially wise in both scenarios.

• Always plan for retirement. Even if you don’t max out your savings, putting aside money now, sooner rather than later, will mean you’ll have more to save later.
• Minimise the use of credit cards. Don’t add up the debt you have just because you like to spend. Use a cash budget to keep yourself on track.
• Give yourself spending money to use freely even if you are a saver. It can help to add quality to your life and give you the opportunity to be more spontaneous while still being frugal.
• Always have money put aside for an emergency. Even in the best of situations, there could be an expensive repair or trip you need to take.

What you do not only determines your future, no matter if you are an expatriate now or you hope to be. It’s a good idea to talk to your spouse, if you have one, and to develop a plan that helps you to achieve all of your financial goals while living the type of lifestyle you desire.

Being a spender or a saver is arguably less important than having the quality of life you desire the most. And the best way to achieve this is to have a sound, workable, tailor-made financial strategy in place. You must find a financial adviser to help you devise, implement and manage a plan that works within your individual circumstances and that suits your individual goals in order to reach your long-term financial objectives.

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Blog published by Mike Coady.