What's your spending style?
Learning about your financial bad habits and weak spots can save lots of grief later.
Many people fall into a particular way of spending their hard-earned cash. Are you like any of the following?
Drip, drip, drip
It's the little things that mean so much. Well they all add up anyway, sooner or later. Money doesn't rush away from you like a one-off tidal wave; it's a slow and steady trickle. You're the person that goes out to buy a paper, but comes back with a paper, a magazine, some chocolate, a scratch card, and a swanky take-away coffee. And a muffin. You probably own stacks of little useless things that you will never need, or even want. It just seemed like a good idea at the time. You get to the end of the month and wail where does all the money go, it's not like I spend it on anything?
Kablam!
You are the power spender. You love those big purchases, especially if they're hard to get hold of, or status symbols. Whether it's a flash car, exotic holiday, top of the range home entertainment system or a designer wardrobe, you want want want it. So much so you'll run up an overdraft, hammer your credit cards, or take out a loan you can't realistically afford to pay back. The bank manager feels nervous, but finance companies love you and will push more and more credit at you until something eventually goes ping.
The addict
You spend to cheer yourself up, because you deserve a treat, or to take your mind off bad days or bad feelings. You may even think of yourself as good at shopping, or a spending expert. It's a thrill, or a rush. These bouts of spending can be occasional or they can go on for days, and are followed by sensations of fear or guilt. You may try to hide the extent of your purchases from family or partners. Thinking about how much you owe makes you feel sick or afraid, so you may even pretend that those debts aren't piling up at all.
Super-scrimper
Too much spending is bad for you, yes, but too much saving is unhealthy too. If you have enough to live on, and save enough too, is it really necessary to scrimp? Your friends might get fed up as you become more and more neurotic, or avoid social activities because they're too expensive. It is often rooted in fear, especially if someone grew up in poverty or other hard conditions. Some people also use miserly behaviour to control or manipulate others, we all know someone who has more money than us but still avoids buying their round in the pub.
Loosen up, you tightwad. Buy us a pint.
If you want to get the balance of saving and paying for bills just right, have a go at the FSA's budget calculator to help you spend without any guilt.
