In this world, there are exactly two types of people. Spenders and savers. These two categories make up your family, the country’s economy and the rest of the world (big stuff, right?!). Do you know if you are a spender or a saver?
You may know exactly who you are, but before you say, “yeah, yeah, I’m a {spender/saver},” take a moment to read this. I was shocked when I found out about myself and it has completely changed how I approach my financial decisions.
If I described a person to you who was:
Person 1:
A total budget nerd keeps track of all the bills at home, devised a debt payoff plan, meal plans to save money and keeps the whole family accountable.
Would you say they are a spender or a saver?
Or, if I described this person to you:
Person 2:
Completely uninterested in budgeting, ignores bills until the last minute, thinks debt will get paid off eventually and never talks about money.
Would you say they are a spender or a saver?
Chances are you are guessing Person 1 is a saver and Person 2 is a spender.
What if I told you you’re totally wrong?! Can you believe it? How do I know you’re wrong? These people I have just described are real. Person 1 is me (Rachel from this awesome blog you are reading right now), and Person 2 is my husband, Tanner (the love of my life who can’t see crumbs on the floor to save his).
Prior to understanding the differences between spenders and savers, I would have agreed with you that I should be categorized as the saver. However, now that I know I’m really the spender, it has completely changed how I look at our finances and the decisions I have made for our family budget.
Once you know which one you are, you can understand your internal driving force for certain decisions you make and better predict your behavior (this allows for you to correct bad behavior!).
What is the difference between being a spender or a saver?
Each person has good and bad qualities. These characteristics just made a total light bulb go off for me because for the longest time I thought I was a saver. Boy was I wrong! Read on to see if you are what you think you are.
Spender:
+ Spenders are incredibly generous people. They just love to give, even if it means the shirt off their own back. They don’t hesitate for a second to give to others (bonus, if the giving me an additional shopping trip!).
+ Spenders are not concerned with holding onto money. They don’t feel stressed out trying to build up their savings. They just don’t worry about money.
+ Spenders only value money because of the experiences it can bring them. Spenders use money as a way to achieve the entertainment in life they desire.
– Spenders tend to make decisions on savings. They often lack self-control and self-discipline when it comes to money.
– Spenders end up with nothing to show for all of their hard work. You will often see spenders with an empty bank account and they haven’t paid their electric bill yet. They hope they will be able to cover their most recent purchase before the payment bounces.
Saver:
+ Savers are extremely patient people. They know the path to wealth is slow and steady. They have the patients to work on long-term investments and not become bored with it.
+ Savers are very responsible and practice self-control. This eliminates impulse purchases and creates the habit of curbing unnecessary spending. They understand debt will be a hindrance and they avoid it at all costs.
+ Savers look the future, set goals and continue to learn all they can about finances. They use long-term goals as motivation and continue to study money management to make better decisions.
– Savers are penny-pinchers, verging on being stingy people. They can often be mistaken for being greedy because they are trying to save as much money as possible, in any way they can.
– Savers have trouble spending or even giving. They struggle with charitable giving and gifts for others. They often would prefer to donate their time instead of their money.
You may have read through this and realized you have some qualities from both spending and saving. That’s okay! I totally do too, but at your core, you are definitely one of these types of people.
So, to put this in full illustration for you to think about who you are, put yourself in this situation:
You are at the grocery store and there is a mom with a young child in front of you checking out. Her total comes up, you can see she is panicked and she pulls out her money in a fluster. Loose change crashes down on the counter and she starts counting the coins. She doesn’t have enough and is telling the cashier to take certain items back…….baby wipes, a head of lettuce, baby formula.
What do you do?
a. Jump in and cover the difference for her and tell her to have a great day! You leave the store feeling really good about yourself and know you made a difference.
b. Let her put her items back and finish checking out. You have to take care of your own family and you leave the store feeling great because you stayed under budget.
If you answered a, you are a spender!! If you answered b, you are a saver!!
Are you surprised by your answer??
I totally was! I am a budget crazy person, but it turns out, I budget and plan to get out of debt SO THAT I can give more. I go overboard on gifts for others because it is just too much fun for me. I donate more than I should for charities because I want to! I once spent our entire grocery budget for the month buying Thanksgiving dinners for other families (my husband was NOT happy with me).
What I realized after finding out I was a spender, is that spenders can be financially organized, but typically their motivation is always for something else entertainment or giving related. Spenders budget SO THAT they can achieve something else.
Savers budget to accumulate wealth. This means they can be totally disorganized, but still be very proficient at saving their money. Being organized does not equal automatic savings.
It’s as simple as that. Now, I am not saying savers are heartless people. I am just saying their motivation in life is just different. Wanting to build wealth is not a greedy thing. It is actually quite prudent for your family and the generations to come.
I gave this exact shopping scenario to my immediate family and we were all kind of flabbergasted by who were the actual spenders and who were the savers among us. It was so funny, the discussion we had of, “You wouldn’t help that poor single mom?!” And, “You would blow your grocery budget and put your own family in jeopardy?!”
There is no right or wrong, it is just good to know so you can better predict your future behavior. This is where the fun part comes in.
What should spenders do to improve their money management?
Understand your weaknesses:
You have such a giving heart, you want to give without abandon. When you have gifts to purchase or charities to donate to, set a budget for it. Even with a budget, you may still need an accountability partner to keep you in check.
For example, when I know I have to go Christmas or Birthday shopping, my husband always comes with me to make sure I stick to the budget we have agreed upon.
Take away opportunities to impulse shop. If you know you have a propensity to buy on impulse, stay out of the stores that are high risk for you. If you love Target, do all your shopping online and stay out of the store (they set traps for you in there!).
What should savers do to improve their money management?
Understand your weaknesses:
You tend to be stingy with your money and possessions. Focus on practicing generosity by selling your stuff or even donating it. If you sell it, you will feel good about letting go of some possessions, but you will still be feeding your need to accumulate wealth by making money.
Train yourself to tithe (giving 10% to your church or worthy cause of your choosing). Practicing giving with truly make you a better person and help you to see the worth in helping others. It will release your tight grip on money which will, in turn, change your heart for the better.
At the end of the day, we all have ways we can improve with our money. Understanding your behavior will help you predict what you will do in a given situation. Ultimately the goal is to find a good balance for your financial life that will lead to success.
Understanding your tendency to be a spender or a saver will help you alter any unwanted behaviors (not overnight, of course, it will take some work!). Take a look at yourself and determine if you are a spender or a saver. The answer might surprise you and explain some of your natural tendencies. If you are married, take a look at your spouse, chances are they are the exact opposite of you! They will be the perfect accountability partner for you.
