Spender, saver, splurger or something in between? Here's how to identify what your money mind looks like and how it can help you save.
Just like your personality dictates whether you’re a bookworm or TV binger, party animal or a couch potato - your cash personality dictates how you spend.
So, if you're an impulse buyer who loves an impromptu online shop, you're probably not the same person who's applying the basic 50/30/20 budgeting rule of thumb to your life and putting aside 20% or more of your earnings each month…
Figure out what your money mind looks like and how that can help you save.
The BIG spender
If you want something, do you need to have it, like yesterday? If you're using your credit card more than you're bothering to check your account balances and prefer to treat yourself to the latest must-have gadget - instead of putting it away for a rainy day, you are most definitely a spender.
As a spender, you tend to live in the moment and focus on what's happening now. Worrying about your savings? Pah! Putting away for your pension? Boring.
Since spenders tend to go big or go home, when you do invest, you're likely to go for the high-risk, quick-turnaround option, rather than slow and steady gains over time.
Thing is, you don't need to treat everyone, efvery time (spenders feel all warm and cuddly when they're spending money on people, which is great… until they realise they have no money left for themselves).
The trick to saving when you're a spender? Start tracking your spending – all of it (we bet you throw out your receipts usually, right?). Then break down your spending into things with long-term benefits - rather than impulse buys.
When you have the urge to splurge think about whether you'll still use the item in a few months and then consider whether or not you should buy it. Beware of your tendency to break budgets you plan on sticking to, which will be more realistic to achieve if you put away the plastic for a few weeks or months. Instead give yourself an allowance each week that you can't go over.
The Cautious One
For every spender, there's his or her happy counterpart: the saver.
If you're a saver, you have many good qualities: you know how much everything costs and where to get the best deals, you don't believe in paying full price for anything – and you've learned that in this life, you never need to - and you are organised and responsible when it comes to money.
Another positive? You're unlikely to have any credit card debt, and you won't let anything distract you away from your financial goals, whether you're saving up to buy a house or to pay for your child's university fees.
While savers are hyper-aware of their finances, they're not necessarily making the most of them. Making money is about increasing returns as much as saving what you already have. Put some money away for a rainy day by all means, but don't forget to enjoy today as well.
That one lucky deal could make you rich, so you're willing to take a chance – even if it means losing everything. If your cash personality is The Gambler, you love the thrill that each new 'deal' or 'investment' brings, even if you've followed your gut rather than cold, hard evidence.
Unfortunately, go too far in this direction and you risk putting your financial health at serious risk.
Money doesn't need to be a thrill ride - in fact excessive risk-taking with stocks and shares could be a sign of a money disorder.
The Status Spender
'Money makes me feel like I'm a part of the crowd.' If that sounds like your money motto, then you're a status spender.
If you're always lusting after the latest style of arm candy - despite having about 100 handbags already – sorry, but you're guilty of falling into this category.
Status spenders have an emotional attachment to cash: it makes you feel happy and accepted. Maybe it defines who you are. Unfortunately, if you're heavily reliant on credit cards, who you are is a person in debt (don't forget that credit card interest, combined with late fees, balance transfer fees, over-the-limit fees and more is added onto your monthly bill and will continue to accumulate over time).
The solution? Focus on investing more and spending less – the easy way to reach your financial happy place.
The Savvy Investor
Were you banking online long before any of your friends? Do you understand how money works – as in, just get it? Do you keep an eye out for the best financial deals? Have a few different investments on the go at one time – and are you predicting that one of those stocks you discovered is going to provide your income soon? Congrats, you're a savvy investor.
Careful, calculating and all too aware of financial pitfalls and risks, you're on top of your money without being too obsessive about it – which makes you the one giving your friends advice on how to diversify their portfolios and make a molehill of pennies into a mountain of pounds.
There's yet another money personality type: people who are completely oblivious to it. Maybe you don't want to get your hands dirty with money because you think it's the root of all problems, or maybe you have no emotional response to money whatsoever – all that matters in life is that you're happy, right?
Even with your laissez-faire attitude towards money, you do know you need money from time to time (to eat, to live – all that good stuff!) and the best way for you to manage your finances is to take advantage of the myriad technical advances that make dealing with your money day-to-day a thing of the past. Set up direct debits for all bills and expenses, if you can make sure you send cheques out on the same day every month. That way, you're in control of your financial situation and not racking up debt.
If you're a money avoider because you simply find the whole money thing overwhelming, face your fears before you end up in financial dire straits from carelessness: look through your monthly spending, track where your money goes and come up with a plan to start investing – something you can do even if you're in debt. So, what's stopping you, no time like today. Happy saving!
This Money Matters post aims to be informative and engaging. Though it may include tips and information, it does not constitute advice and should not be used as a basis for any financial decisions. Sainsbury's Bank accepts no responsibility for the opinions and views of external contributors and the content of external websites included within this post. Some links may take you to another Sainsbury's Bank page. All information in this post was correct at date of publication.