Thursday, April 24, 2014

Are you a Saver or a Spender?

Ideally, it would be beneficial to be a balance of each.

Savers love to see their money grow. It gives them great pleasure to open bank and brokerage statements and see the values increase. It can be physically painful when account values drop, even a small amount. Hence, savers avoid risk for fear of losing money. They may even deprive themselves of creature comforts and the joy of giving.
Spontaneity is out.

Spenders take bigger risks feeling somehow the money will appear. Negative consequences don't even enter their minds. They are big spenders, big tippers and very generous with friends and family. They get tremendous joy from making others feel good.

Serious issues arise when a spender marries a saver. Then the sparks fly!

Ideally, you want both aspects. Once you recognize your strengths and weaknesses you develop strategies to managing your money and spending habits.

A simple spending plan will give a saver permission to spend and set limits for the spender. Going back to "know your numbers" - knowing how much you have budgeted for clothing or entertainment puts you in control and gives you the power to make good money decisions.

Knowing you have alotted $1000 for clothing (or sports) for the year lets you buy that special dress (or golf club) without guilt. Keeping tab mentally lets you keep track and leads to a better spending decision.

You will be giving yourself a gift of confidence by striking a balance between enjoying today and enjoying tomorrow. You will truly Be $ Smart!