Money and You: Unveiling Your Spending Habits - What Type of Spender Are You?

Have you ever felt like your wallet has a mind of its own? 

Do you find yourself spending money in the same pattern, over and over again, even when you know it's not the best for your financial health? 

Well, it turns out that you're not alone - and there's a name for this phenomenon. Welcome to the world of spending habits, where we all fit into a certain category of spender, whether we realise it or not. But fear not, knowing your spending habits can actually be a game-changer for your finances. So, get ready to discover which type of spender you are and learn how you can take control of your wallet for good! 

Keep reading to find out more…

Digging Down to the Roots

When we say our spending behaviours are deep-rooted within us, it’s because they are not picked up overnight through a long talk session or ‘how to’ videos on YouTube. These behaviours can be considered a part of our ‘personality’.

Factoring in all the components that we have imbibed from our peers, our elders, our own knowledge, personal experiences, and more, our personalities take time to develop and to recede.

Sarah Newcomb, a behavioural scientist and author of Loaded: Money, Psychology, and How to Get Ahead Without Leaving Your Values Behind says that in the process of modifying long-held spending habits and steadying your finances, "the why is often just as important as the what”. 

Focusing on the WHYs & WHATs - Check Out Your Spending Type

As explained, you cannot count the fruits until you’ve worked on the roots. So let’s get down to your triggered expense patterns and their respective corrective measures.

1. People Pleaser

Characteristics - You cannot hold yourself back from spending on others.

Money Tendency - Overspending on gifts leaves you with crumbs to save.

What to Do? 

  • Ask Your Loved Ones to Help You - Tell the ones to whom you usually give gifts about this habit. When you have the urge to spend on them, you can tell them and they can help you control that desire.
  • Set a Limit - Even if you cannot curb this desire to spend money on others completely, you can start by setting up a strict limit for all gifting purposes.

2. Impulsive Spender

Characteristics - You don’t need it, but you just need to have it at that moment.

Money Tendency - Buying small, meaningless things on a regular basis leaves you with zero savings at all.

What to Do?

  • Always Check for a Return Policy - Whatever you buy in the moment, you may feel like you don’t really need it later. Go for products, stores, or platforms that offer a good old return policy.
  • Match It Up - Make it a habit to set aside the same amount of money you have spent on anything of low use to save. 

3. Star Saver

Characteristics - No, we don’t mean that you save the most! This means you buy most things that represent or uplift your social status.

Money Tendency - The live-in-the-moment attitude may throw you under the bus during emergency situations.

What to Do?

  • Induce a 48-Hr Rule - Wait for 48 hours before you buy something that you have your eyes on. This delay in gratification may help you curb your incessant desires, meaning that you would buy things only when you actually need them.
  • Wishlist It - If you’re shopping online, you can always wishlist things and wait for the time when they are available on discounts. You may also add a tracking application to notify you whenever your favourites are available at a discounted price.

4. The Perfect Planner

Characteristics - Spendings - defined. Savings - even more defined.

Money Tendency - You tend to focus more on savings to the extent that you don’t get to enjoy even a little part of what you should be.

What to Do?

  • Let Yourself a Bit off the Hook - Set a budget aside for every week or month that you get to spend on yourself, and yourself only.
  • Reward Yourself - For every big amount saved, say, AED 2,000, reward yourself with a small amount (AED 200 or 500 ) to keep the wheels of balance churning.

5. The Security Chief

Characteristics - You end up saving everything for future/emergencies and are reluctant to spend anything.

Money Tendency - You feel nervous about spending money. As we all know, excess of everything is bad - even saving!

What to Do?

  • Start a Journal - With all your saving goals and to-dos (hobbies, places to visit, and more) jotted in there, you can enjoy the best of both worlds.
  • Invest in Secured Funds - This can be health insurance, property, and more that will make you feel more secure about your future and let you make the most of the present.

How to Change Your Spending Habits with These Simple Steps?

While years of habit require years of training to rewire, you can always start somewhere. In this case, you can start by inculcating these simple habits in your routine to make the most of the spend-save balance out there.

  1. Train your brain to get the same buzz from saving as from spending.
  2. Use the spend limit feature on your credit cards.
  3. Visualise saving money and all that you could do from it.
  4. Invest all the extra money in secure bonds like property, insurance, and more.