(Guest post by Benjamin)
There are a lot of different ways people spend money. Some prefer to save up for expensive items, some don’t mind spending on little things but hate to drop a lot of cash on major purchases, and some are in danger of spending every time they go into a store. Below, we describe a few different ‘spending personalities’ and offer suggestions for how you can improve your personal finances based on your tendencies.
So what’s your spending personality? Keep reading and see which quote sounds like you…
1. “Money is Like Sand Between My Fingertips”
You are constantly frustrated by the fact that you have no control over your desire to buy things. Impulse purchases are a frequent problem for you, whether it’s a 42-ounce Cherry Slurpee, a solar-powered hand-warmer, a second laptop, a third phone, or a brand new car (yikes!). Going to the mall can be hazardous to the health of your bank account no matter what time of day or what time of year. You have a hard time staying out of debt.
What To Do: You need to set up constraints on yourself to stop your spending and get out of debt! First of all, cut up your credit cards! Or use these handy ReadyForZero stickers to cover them up. Then make a commitment to carry only enough cash to pay for your daily expenses like transportation, food, etc. That way, you won’t be able to make impulse buys because you won’t have enough money. Also, ask your friends and family to help you stay on track. They can bolster your willpower to stop spending.
2. “I Save Up and then Splurge on Big Ticket Items”
On a daily basis, you’re pretty good about making wise money decisions. In fact, you actually cut costs on all the little things (like coffee, soda, eating out, etc.). The problem is that your net worth never grows because every 6-12 months you drop a whole lot of cash on a really big purchase. You’ve made monthly payments on a flatscreen TV, a new bed, a computer, and maybe even a motorcycle, a boat, or a mansion. These huge purchases have weighed down your finances so that you’re never saving money despite making lots of little sacrifices.
What To Do: Identifying this problem is the first step. Once you do that, you need to work on appreciating the things you already have. The computer you already have is ten times better than any computer available ten years ago. Just because a newer, fancier one exists does not mean your current one is obsolete. Learn to enjoy the things you have. You should also vow to eradicate monthly payments from your life. (Okay, you might still need some to pay your bills, but you don’t want a monthly payment for every piece of furniture and appliance in your house!)
3. “I Can’t Say ‘No’ to a Good Sale or an Amazing Discount”
The lure of the deal is your kryptonite. You’re a bargain hunter and you love saving money, but your enthusiasm for finding discounts and sale prices often leads you to spend money that you don’t have and/or buy things you don’t need. While your commitment to finding bargains should be praised, you know you need to build better habits or else you’ll never actually save up money — you’ll just continue directing all your money toward buying lots of things at low prices.
What To Do: Remember that even when something is “50% Off” it is still more expensive than buying nothing. Creating a monthly budget and tracking your ability to stick with it will be the most helpful thing for you to do. That way, you’ll see how much of your money ends up going to pay for all your sale items.
4. “I Am Frugal to a Fault — I Can’t Enjoy Life”
You are a model of consistency and restraint. You’ve committed to your financial goals and you are not going to let frivolous spending of any kind get in your way. You bring a brown bag lunch to work everyday, brew your own coffee, put the change from your pockets into your savings account, and refrain from going to bars, concerts, movies, comedy shows… or anything else that costs money. Which is all good! But you’ve become too strict, and you’d like to reward yourself with something fun every once in awhile.
What To Do: Start differentiating between wasteful spending and purchases that will boost your quality of life. It’s okay to go out to lunch with co-workers on their birthday or take your family to see a movie. Of course, you don’t want to go overboard, but some of these little expenses are okay, as long as you can afford them and they’re important to you. Otherwise, you’ll risk becoming bitter about the sacrifices you’re making, and that’s not productive!
5. “I Always End Up Spending Money on Other People”
Your big heart can sometimes be your financial downfall. When someone close to you is in need, you don’t hesitate to help out — which speaks well of your character! However, the problem is that your generosity has put you in a financial hole. You want to be there for your friends and family, but not at the expense of your own situation.
What To Do: You don’t need to stop helping people. Just start acknowledging that you can’t help in every circumstance, and that there may be other ways to help when you can’t provide financial assistance. Make a commitment to look for creative ways of helping people while being able to say ‘No’ when your money situation doesn’t allow you to give.
Knowing your spending personality can really help you to avoid the pitfalls that cause you to spend money and get in debt. If you follow the suggestions here, hopefully you’ll be a wiser shopper and saver.
So, what type of spender are you? Tell us in the comments below!
Benjamin is a writer and content strategist at ReadyForZero. He’s happy his own perseverance paid off in landing him a job at an awesome company that is helping people get out of debt. Follow him at @BWFeldman and read more of his work at the ReadyForZero blog.
(Guest post by xJason.Rogersx)