You ditched take-out coffees, deleted UberEats from your phone, and downloaded a budgeting app.
And yet, you still feel like you should be saving more money, whether it’s because you’re nowhere near enough for a security deposit, or you just want a little more security for it. to come up.
Perhaps you are missing a trick by not tailoring your approach to saving to your personality type.
In any case, this is what Clare Framrose, head of savings at the Atom bank, thinks.
Clare says there are six personality types when it comes to money management, and everyone needs to use different techniques to increase their savings.
So which one are you? And what should you do?
“A worrier is often risk averse, experiencing stress, sleeplessness and panic – all of which can potentiate a very vicious circle of worry around money,” explains clinical psychotherapist Dr. Jo Gee.
“They often go to great lengths to avoid making mistakes due to a general lack of confidence, so we are likely to witness a ‘worried’ who prepares for financial disasters and is obsessed with the amount of money. money they have. ”
You’re probably more worried if you often wake up at 3 a.m. panicking about your financial situation, experience deep fear when checking your bank account, and feel like you don’t. no idea what you are doing.
Clare suggests that the worried string up external support. Knowledge is power and talking about your concerns is essential.
“Concerns will benefit from more open and positive discussions about money, especially with a financial advisor,” she notes. “If the issues impact their daily lives, it might even be worth taking a financial awareness course.
“To avoid unnecessary doubts, I would suggest to someone who is worried about money that they store their savings in an instant savings account – so that they can be sure they can access their funds at all times, if needed. ‘
You’re the type to put your head in the sand and pretend everything is fine.
“For people who like to hide from their money problems, adopting fun spending habits that track any potential financial problems – before you catch them up – is a great way to keep them interested and engaged,” suggests Clare.
“If that’s you, you can try to complete a challenge without spending, which means minimizing or reducing your spending in a specific area.
“You can also try not to buy clothes, eat out, or drink alcohol for a week, and then put the money you would normally spend on those things into your savings. It can be an exciting way to challenge yourself, just make sure you don’t ‘spend’ most of your life. ‘
The compulsive spender
Compulsive spenders love to splurge. They’re the type who always feel the need to indulge themselves – even when they know they can’t afford it… especially not for the fifth time this month.
You are an impulsive, emotional spender who is in a rush to buy stuff.
Clare advises, “For those of you who feel like spending compulsively and want a sense of control, I suggest that you put a percentage of your income into a fixed savings account – because, of this way your money won’t be so readily available so that you can get out on a whim.
“This invisible barrier will prevent you from making unnecessary deductions from your bank balance without proper thought and consideration.”
Mario Weick, a psychologist at Durham University, also recommends setting a specific future goal that you can focus on.
“The benefits of saving money materialize over time, so focusing on a future goal can facilitate savings,” he notes. “If you focus on the here and now, you can encourage further spending. The key to building your savings is to make the process easy, user-friendly and fun. ‘
The compulsive saver
In contrast to the above, this personality type feels the need to save every penny – and struggles with guilt when spending, well, anything.
It can be good for your bank balance, but it’s not a good path to financial or mental well-being.
“Neither extreme spending nor extreme frugality is a path to happiness,” explains Mario. “Uncontrolled spending can lead to guilt and debt, but, on the other hand, being too frugal can be tedious and cause undue worry about how you spend your money.
“A healthy balance between restraint and allowing yourself pleasure and spontaneity is probably an optimal strategy for stimulating happiness – it’s the golden formula.”
Clare suggests “setting aside a small budget for ‘fun’ each month – a sum of money that is purely used for having fun and working on your inner happiness.”
The risk taker
You make quick decisions and don’t always think about the potential consequences. You like to play.
“Risk taker behavior is driven by the production of dopamine from neurons in the brain’s reward circuitry, which creates a sense of pleasure and excitement over the concept of risk and reward,” explains Jo.
“The short-term gain should never outweigh the long-term pain, so these personality types should set limits around their financial risks, define them with a financial advisor, and get therapeutic support if their behaviors seek of sensations become a problem. “
Clare suggests creating a barrier to spending, explaining, “If you often find yourself making financial decisions with little forethought, it is essential that you stay aware of your trends and be aware of how much money you are. must set aside to maintain financial stability.
“A fixed savings account is paramount for this personality type because it sets a clear stopping point for spending.”
Do you start every payday with the best options, transfer money to your savings, and promise to stay on a budget… end up in your overdraft over and over again?
If you are, you are the Saver-Splurger type – and you are definitely not alone.
“While most of us who get paid monthly plan our finances each month accordingly, this may not be the most viable route for a saver-splurger,” Clare tells us.
“I would recommend that savers always have a monthly budget, but then break it down into weekly expenses so they don’t lose sight of the month and end up in trouble as payday approaches. ”
If you want more money saving tips and tricks, as well as money discussing and alerts on deals and discounts, join our Facebook group, Money Pot.
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