What is your relationship with money?
Like all relationships, their status is based on how much one values them and how much effort one is willing to make. When it comes to money, chances are that instinctively you are either a spender or a saver. A spender is someone who can’t resist a sale, purchases with impulse and lives in the moment. On the flipside, a saver is typically more of a planner, they think about the consequences before making purchases and they show restraint when buying. A saver knows that the long-term benefits of keeping money in the bank or living within their means, far outweigh the short-term rush of clicking “buy” and opening a parcel when it arrives in the post.
It is not age, gender nor occupation that defines one’s spending tendencies, it goes a lot deeper. Personal values, the environment of which one is raised and one’s willingness to take risks all contribute to one’s innate spending behaviour. Of course, while some have a lot more to spend than others, income levels do not necessarily define one’s spending profile. It is not uncommon for employees on a much higher disposable income to spend more prudently than those who earn less.
On the surface, you may not be able to tell the difference between a spender and a saver. They may both seem to be living life to the fullest – taking holidays, dining at restaurants, socialising with friends and treating their families. It is only when you start talking with them about their futures, that the differences become more apparent.
Speaking with a spender about their long-term plans will go one of three ways:
- It is a very short conversation as they do not want to think about it
- You will hear about the financial pressures in their lives and their resentment towards work as they feel that have no choice but to work for the rest of their lives
- They are hoping to hit the jackpot and win the lottery.
On the other hand, speaking with a saver can be a completely different story, especially if they have a long-term plan. While of course they would also love to win the lottery, when they speak about their future, they have a lot more confidence, they have a plan to share and there is a sense of calmness about them. What is obvious and clearly distinguishes them from a spender, is their sense of control and optimistic outlook. While not everything in their life may be perfect at that time, the main difference is, that savers make deliberate decisions and when times get tough, they have options to choose from. Having options in any situation is very empowering and the more control one has of their finances, the more options one has at their disposal.
Now the good news is, that while everyone typically falls into a category of being a spender or a saver, with the right advice and support, anyone with the right mindset and resolve to plan for the future, can improve their financial situation. While spenders may innately lack financial discipline, behaviour can be changed over time when there is a solid plan and actionable framework in place. It is a bit like getting fit, whether you love exercising or hate it, the right support will help you reach goals faster. A good personal trainer will keep you motivated, give you exercises that meet your personal conditions and goals and they will help keep you on track. When it comes to building wealth, this is exactly how the right financial planner can assist you.
Even if you are a saver, future financial freedom is not a given. There are many people who have saved hard all their lives, yet they are not happy with their lifestyles as they not feel secure and confident that their savings will last the distance. If you are a saver, seeking financial advice can also further advance your financial situation. While saving is a great thing, everyone needs a structure to maximise their savings so that you can plan their future with certainty. Ask yourself, are your savings actually working hard for you? Can you invest your money so that it works harder, minimising risks and maximising the outcomes? Will you be truly rewarded in the future for your diligence today and are there ways that you can restructure your finances so that you are saving more, without necessarily changing your spending habits?
Either way, if you are a spender or a saver, if you are committed to a better future, a financial planner who understands your goals and has your best interests at heart can help. The sooner you seek professional guidance, the less sacrifices you will have to make along the way as often, compromises and small changes in behaviour today, will reap real long-term benefits in the future.
No matter if you are a spender or a saver, if you want to think about your future with more confidence and thrive financially, get in touch today and start the conversation.
I look forward to hearing from you!