What type of spender are you?

Shopping with a credit or debit cardWhen it comes to money, most of us don’t always make decisions based on our bank balance or on the advice of a financial adviser. In fact, our approach to spending and saving is often emotional rather than rational. So what gives one person the urge to splurge and makes another go weak at the knees every time they have to hand over their credit card? Find out which of these five spending types reflects your own traits – and then learn how you can play to your strengths and overcome your weaknesses to improve the state of your finances.

Do you:

  • Love anything that comes with a BOGOF label?
  • Actually enjoy checking your bank statement – to see how much money you haven’t spent?
  • Save as much money as you can and see it as a security against leaner times, fearing that one false move will leave you penniless?
You are: The Squirrel

Pros: You know how to live within your means. Sticking to a budget is a cinch and you never waste a penny on credit card interest or overdraft charges. You’re a seasoned bargain hunter who can dress and feed the whole family on a shoestring.

Cons: Focusing on a secure tomorrow, you often fail to enjoy today. Your natural caution may see you being a little too conservative with your savings, choosing to put your money in safe but low-interest-paying bank accounts.

Be more savvy: “Money flows, so don’t hold on to it so tightly – it’ll come back to you in one form or another,” says Lavinia Osbourne, financial empowerment coach at Butterfly Wealth Creation (butterflywealthcreation.com). “One way of ensuring that it does is to use a cashback card, which allows you to earn as you spend.” Then indulge in your love of saving by investing the cashback in a long-term high-interest account. “A great investment for you would be an index-linked account,” says Lavinia. “It’s low risk but the returns are higher than inflation.”


Do you:

  • Have 100 handbags or more cars than you actually need (and quite a few credit cards!)?
  • Feel you deserve another holiday – whether or not you can afford it?
  • Love to shower your friends with gifts, but like to show off your gorgeous home and new car even more?
  • Feel a huge pleasure boost when you buy something new and love the glow you get when you give a gift that’s appreciated?
You are: The Big Spender.

Pros: You know how to enjoy life and live in the moment. Your friends appreciate your kind and thoughtful gifts and know exactly which gift to pick to make each of your friends feel special.

Cons: You often overindulge and live beyond your means. The joy of spending hides the huge pool of credit card debt you’re probably hiding from yourself. It’s unlikely that you have savings or even give a thought towards your retirement or how on earth you’d cope in a financial emergency.

Be more savvy:“A price tag can feel like a small price to pay to make your friends and family feel appreciated,” says Gill Stephens, savings expert at National Savings & Investments (nsandi.com). “But to ensure you don’t end up stretching your finances try using the four-day rule – if you’re about to buy something which isn’t a necessity, wait four days to give yourself time to make sure you really want it,” says Gill. Ideally you should aim to pay back your credit card debts so set yourself repayment goals. Research shows thatsetting a goal increases your success at paying debt off by 44 per cent. Once your debts are under control you can continue to stash away the equivalent amount in a saving account.

Do you:

  • Say no to daily £2.50 shop-bought sandwiches, but can’t resist that last-minute ‘bargain’ holiday to Florida?
  • Shop around to find the cheapest credit card deal and wait till new-year sales to replace your washing machine?
  • Tend to indulge your children or grandchildren on the spur of the moment?
You are: The Splurger

Pros: You’re good at saving and can keep your everyday spending under control. Yet you aren’t so tight with money that you can’t enjoy spending it.

Cons: When you get the itch to indulge, you sabotage your saving efforts by making an extravagant purchase that empties your bank account. Your ‘Everyone deserves a treat every now and then’ mantra feeds the cycle.

Be more savvy: “If you know you’re likely to blow your savings on indulgent purchases, stop yourself from sabotaging your hard work and lock them away in a fixed-rate savings account,” says Tara Evans, of thisismoney.com. “Not only will you get a better interest rate – the best five-year fixed account currently pays 4½ per cent – you’ll also be forced to wait to make that purchase. The longer you fix, the better interest rate you’ll get, but beware – if you need to access the cash early, you will pay a penalty.”


Do you:

  • Lie awake most nights fretting that you won’t be able to meet this month’s bills?
  • Buy a car, then agonise over the running costs, certain you should have kept the old one?
  • Buy things and take them back – not because you no longer need or want them, but because you’ve convinced yourself you’ve been too extravagant?
You are: The Worrier

Pros: You never forget to pay those bills or get overdrawn by accident. You know how much you’ve got at any given time and are more likely than average to avoid money trouble by budgeting and planning for bigger purchases months in advance.

Cons: You lack confidence in handling money matters and micromanage every penny – often going over and over your bank balance more than once a day. Having to make financial decisions can paralyse you, even when just choosing a new energy tariff. You may take so long to make a decision that you miss opportunities in the form of discounts and offers.

Be more savvy: “Try channeling worry into financial precaution – use it to ensure that you put enough away each month into savings,” says Mark Pearson, founder of discount site MyVoucherCodes.co.uk. “Saving is the best possible way to ease financial worry as it will put your mind at rest if you know you have financial back-up should any unexpected costs crop up.” Watching the savings pot grow rather than a bank balance reduce will also help reset the brain’s view of money as a positive rather than negative experience. “Worriers can also channel their tendency to check and double check into finding the best deals for what they need online,” Mark adds.


Do you:

  • Pay off the full balance on your credit card each month and put a percentage of each salary into savings?
  • Thoroughly research your investment options, but don’t lose sleep over whether you’ve picked the best deal?
  • View cash as simply a practical tool for living – and know how to make the most of what you’ve got?
You are: The Money Maven

Pros: You save and invest for long-term goals, but also treat yourself without overspending. You’re not averse to upgrading your lifestyle but only when your income allows.

Cons: You cannot understand why others make such a hash of their finances, as it’s something you find so easy. This can make you insensitive to other’s situations and a bit of a bore when it comes to lecturing friends or family on what they’re doing wrong!

Be more savvy: “You’re financially savvy and you know it! But don’t discount advice from others who may have savings tips or pointers that could benefit you, too” says Tara Evans. Not keen on discussing you financial affairs with friends? “Go online,” says Tara. “There are thousands of forums and social networking groups where likeminded people share ideas about how to maximise their money.”

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