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What Type of Spender Are You?

by Ryan Guina

Some people have a hard time spending money, while it easily slips through the hands of others. Why is this?

There are a lot of reasons, but a lot of it has to do with our internal motivations and attitudes toward money. For example, I find it easier to spend money on other people than I do to spend money on myself – especially if I am spending money on my children. It’s not that I’m scared of spending money or that I have an overly restrictive budget. It’s just that I usually have a bigger long term goal for my money than buying myself the latest and greatest in clothing/gadgets/cars/fill in the blank.

what type of spender are you?

What type of spender are you?

When you take a moment to reflect upon your spending habits, you will likely learn a few things about yourself. For example, through the years I have learned that I prefer taking a long term approach with my money, and if I do make a big ticket purchase, I want it to be something that I will truly use and enjoy, not just a purchase that was made to fulfill a fleeting emotion.

Your spending patterns often show direct correlations with your priorities and overall financial health. Good indicators of your priorities can be often be seen in the amount and type of debt you have (for example, large amounts of consumer debt), or in your savings and investment accounts. If you are big believer in delayed gratification, you most likely have a larger retirement fund than people who buy things at whim.

Three Types of Spenders

If we want to break things down further, we can take a deeper look at our spending habits. It’s possible to break things down into three general types of spenders. They are:

  1. Minimalists – Less is more
  2. Consumers – More is more
  3. Investors – Spend to make more

Minimalists. If your primary expenditures are only items you need, such as food, clothing, shelter, and normal bills, then you may be a minimalist. There are a lot of great things about living a minimalist lifestyle, and it works for many people. But in it’s truest definition, a minimalist lifestyle doesn’t work for everyone. Abstinence and delayed gratification can be beneficial, but self-denial can be detrimental to your physical and emotional health. Trying to force yourself to do something that isn’t in line with your beliefs or lifestyle is a quick way to being unhappy.

Consumers. Do you think shopping is a sport? Do you go shopping for fun, or to lift your mood? Are you an early adopter of new technology and gadgets? Then you may be a consumer. Spending money in and of itself is not bad. It only becomes a problem when it interferes with your lifestyle or ability to meet your financial obligations or other commitments.

Investors. If you primarily spend money to make money*, then you are most likely an investor. (*excluding normal bills). This includes traditional investing, such as buying stocks, bonds, and other “traditional” investments. But it can also include investments such as rental properties, a small business, education, or anything else where you can receive some short or long term ROI.

We Are All a Little Bit of Each

It’s easy to jump to conclusions and say you are only one type of spender. But most of us are a combination of all of these, at least to some degree. And that is a good thing.

If you live your entire life as a minimalist, you may miss out on some of the things you or your family enjoys. Spending money is good, but not if it means you are living in debt or struggling to make ends meet. Investing is essential for your long term planning, but not at the expense of giving up your ability to enjoy a healthy or happy lifestyle in the present.

A Healthy Balance is the Key

Many people will tell you how you should spend your money – the most common example being that you should cut your spending to get ahead in life. But that is broad, and quite frankly, baseless advice. It’s all about setting and maintaining your priorities to achieve your financial goals. You should spend your money how you like – so long as you are in control and your financial habits aren’t hurting you. Money is only a tool. It can buy you things and it can give you security, but it doesn’t buy happiness.

Which type of spender are you?


Published or updated April 2, 2012.
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{ 7 comments… read them below or add one }

1 Get Rich Point

It is very difficult for me to purchase anything for myself because I don’t believe in instant gratification but when it come to gift my loved ones I choose the best things. I have set aside a separate fund to meet my investing activities and though I am not a millionaire I never feel that I have less money. It was not like this always but, it seems that, over the years I have learnt to strike a balance between the three kinds of spending habits.

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2 Kurt @ Money Counselor

No question, I’m a minimalist. My wife however doesn’t fit well into these three categories. She’s a ‘bargainist.’ It causes her great psychological pain to buy anything that’s not on sale or otherwise a good value, like at a thrift shop. But, she’ll buy stuff she and we don’t need, just because it’s at a great price. Hence the mantra I often recite: “Buying things on sale that we don’t need does not save money.” But she’s extremely good with money overall, certainly not a ‘shopping for sport’ type.

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3 Jeremy @ Modest Money

Lately I have become a lot more of a minimalist. I made the mistake of being mostly a consumer in the past and realized how much money I wasted. These days though, I rarely spend anything on myself besides the occasional food treat. When money is good, I definitely shift into more of an investor. So for me it mostly just comes down to how I’m doing financially at the time.

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4 Ryan Guina

I’ve personally gone through phases where I was primarily one of these three types of spenders more than the others. Right now I am trying to buy fewer “things” but to make sure that when I buy something, it is quality, and something I will enjoy and use. I am also trying to be a better investor and spend more money on things that will provide a return in investment in the long run. For me, that involves things such as traditional investing in my individual and retirement accounts, as well as investing money into my business.

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5 Jeremy @ Modest Money

If it seems like just a phase, do you think it’s still important to find balance during that time? Obviously it’s more important to watch out if that is a phase of being a consumer, but what about if you are obsessed with minimalism of investing for a while? Is that necessarily a bad thing?

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6 Ryan Guina

I don’t think it’s a bad thing to be obsessed with minimalism or investing for certain phases of your life – it helps you better understand your personal values and what is important to you. Being in a minimalist phase, for example, can be good, because it helps you disassociate “stuff” with happiness. But it can be a problem if it casuses undue hardship or sucks the fun out of life. The same thing goes for investing. Putting extra money toward your investment goals can help you reach them more quickly, but if you sacrifice your quality of life today for the promise of tomorrow, then you are kinda missing the point.

The key with all things is balance, and if you find your current way of life too restrictive, or causing unhappiness for you or your loved ones, then it’s time to reevaluate things and adjust.

7 Jim

I hate money, but unfortunately I have debt that I have to pay so at the moment I am a minimalist/investor. It’s just a means to an ends I suppose, but I wish it was actually backed up by gold or our government would print our own money instead of using some fiat currency not even worth the paper it’s printed on that all goes oversees by the end of the day.

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