Spending Guilt

Spending Psychology

How To Know Your Spending Personality

By Daksha Gehani

All our choices in life are dominated by the type of personality we have and that extends to monetary decisions as well. To identify your spending personality, we delve into what is called financial psychology.

Your spending personality can be influenced not only by your nature but also by the thoughts and external influences you acquire from society, culture and religion. Your own parents and friends can influence your financial habits as well and you may not even realize it.

Financial psychology is a discipline that is a crossover between psychology and behavioural economics. It basically helps you understand your spending patterns, triggers and behaviours. Learning about this will help you understand your spending personality and in turn, improve your finances.

1. The Emo 🥺

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Emotional spenders are bound to spend their money on certain activities that are directed and resulting from corresponding emotions.

You had a bad day? There you go, shopping/eating all your troubles away and in the desire to destress, you overspend and exceed your monthly budget.

You had a wonderful day? There you go, shopping/eating all your troubles away and in a desire to celebrate, you overspend and exceed your monthly budget.

In all scenarios, you end up overspending and exceeding your budget simply because your emotions rule almost all your financial decisions.

A way to counter it would be to make an effort to be self-aware and stop yourself when you’re about to spiral into such a situation. Make preparations in advance by keeping a stack of food in your home and a few movies in store for you to watch so you have an incentive to stay in and have frugal fun at home.

2. The One in Denial 🙈🙉🙊

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An ‘In Denial’ spender is someone who manages to move through life without being flashy or frugal. However, you have no money management skills or even a basic budget for that matter. You are aware a budget would do you heaps of good but you think that because you are able to get by, you don’t need to learn and understand the vast ocean that is money management.

The truth is, as you grow and your finances increase in terms of income and expenditure alike, it will become increasingly difficult to keep a track of them without a proper financial plan. It doesn’t have to be elaborate, it can be the most basic plan as long as it gives you what you need in terms of your goals and desires.

3. The “Steal the Deal!” 🧐

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This is the type of spender who is frugal and smart with their money most of the time. Why do I say most of the time? Because this type of spender makes large purchases only when sales and coupons come by.

Such people buy in bulk during sales and discounts to make it last for months.    This makes them prone to sale techniques that many supermarkets and retail stores use. Every sale and discount doesn’t necessarily mean you are saving money, the point is to look beyond that and calculate for yourself to see how much of a steal the deal is.

The thing you need to keep in mind is to be aware of your spending habits and make sure it doesn’t extend beyond sales and dent your budget in that process.

4. The Grandpa 👴

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This is a spender who is so financially conservative, they are practically a grandpa. This person has it all down – health insurance, life insurance, investments, savings, an emergency fund, etc.

Perhaps they are most literally old enough to be a grandpa seeing as how everything is ready!

On a more serious note, such a person is well prepared for any situation that may arise in the future like emergencies or even retirement. They might not be perfect in money management but are constantly educating themselves n it so as to stay on the top of everything. This minimizes their risks and helps them develop a clear budget.

This does not mean they don’t have fun, but they do it smartly and adhere to their self-imposed restrictions.

5. Mr/Ms. Annoyingly Perfect ✅

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This is an idealistic spender, an annoyingly perfect one. They have their finances down to a T and are on top of everything. Their savings, emergency funds, insurance payments, investments and retirement funds are already in place making them prepared for any possible situation.

This is a person who doesn’t need to do anything except keep it up! You are a star! (You might also be non-existent xD!)

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If you have been able to identify your spending personality as one of these, this is a step further for you! And if you haven’t, this might get you thinking about your habits and encourage you to figure out your spending personality and that’s another step forward for you as well!

You may not be able to change who you are but this way you can identify your flaws and work to stay on top of them and constantly improve both your nature as a human being and your finances. Now you can better achieve your financial and life goals!

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