Is it better to spend or save? The surprising answer

We all have our own money personality that represents our beliefs and behaviours around our cashola, and part of that is our identity as a spender or a saver.

Like many things, when it comes to being a spender or a saver, there’s often said to be a spectrum or a scale on which we all sit. Despite this, research has shown that generally we can all self-categorise as one or the other.

So which are you?

I’ll start. Hi, I’m Emma and I’m a natural spender.

I’ve always been a spender. It’s just the way I am. I was also the kid that would eat all my allocated lollies in one go and get jealous of the ones who saved theirs.

My natural spender tendencies meant I spent most of my life wishing I was a saver. Just like I envied the kids that saved their Skittles, I envied those that seemed to have this miraculous ability to hold onto their money.

“Life as a saver must be so great”, I’d think to myself. Never wondering where all your money went. Never feeling that wrath of getting to payday and having to dip into yet another attempt at saving.

But is being a saver actually better? Recently, I’ve come to question exactly that.

Traits of a natural saver

Research in the financial psychology field has established that our life experiences create a set of financial beliefs that inform the way we think and feel about money. Commonalities in beliefs and their correlating behaviours have led experts to develop four different ‘scripts’ or narratives for individuals to identify with – one of which is known as money vigilance.

Money vigilance is most strongly associated with the traits of a natural saver. Things like frugality, fears of not having enough, need for security, and a greater desire to retain money than to spend it.

On paper, a money vigilance narrative often makes for “better” financial outcomes. Natural savers tend to have more money in the bank, less trouble holding onto their income, and even an ability to disconnect with the idea of spending on enjoyment.

Your bank balance isn’t the only marker of financial wellbeing

While natural savers might have a higher savings rate (the percentage of their income sent to savings) or more money in the bank, natural spenders may actually be better positioned to achieve financial wellbeing.

That’s because a savvy saver’s juicy savings balance can actually be a sign of fear and anxiety around money. When we have fear around money running out or obsess over saving, our overall levels of wellbeing can decrease. These types of savers often find it hard to enjoy life as a result of their obsessive saving behaviours.

Saving all your money sounds great in theory – but what’s the point if you never use it for anything?

Savers carry a lower risk tolerance

Natural savers may also experience a lower risk tolerance than that of a spender. Being extremely fearful of risk can hold savers back from wealth creation behaviours like investing, or even things like mortgage debt.

Resistance around investing in assets that have the potential to outperform inflation can actually leave a savvy saver worse off in the long run.

While everyone has a varying risk appetite, spenders may be more able to see the value of buying things like shares or property, because they’re used to parting with their money in exchange for a benefit.

Are spenders better able to optimise their behaviour?

Now don’t get me wrong. Me and my fellow spendy Susans aren’t immune from limitations of our natural tendency to splurge.

The writing is on the wall. Overspending and overconsumption is common in the modern world of e-commerce and buy-now-pay-later. Every dollar spent is one less dollar that can be saved.

But as a reformed overspender myself, I have a theory. I reckon spenders have a greater appetite for behaviour change in their finances.

We know we can be a bit splurgey. We know we have to work that little bit harder to save for a rainy day.

But we’re more aware of the need to modify our behaviour to better our financial reality.

Savers are so used to being celebrated as embodying the ultimate financial ideal that it can actually be harder to recognise the benefit of modifying their financial beliefs and behaviours.

Ultimately, being too much of either spender or saver is a bad thing. But when we unpack the beliefs and behaviours of a spender, it can actually be easier to modify your spending behaviours than to get a saver to get comfortable parting with their money.

生词记录

personality 个性，性格；名人，名流

cashola 现金，货币

spectrum 范围，各层次，系列，幅度；光谱

scale 标度，刻度，等级；比例，比例尺；大小，规模，范围

categorise 将…归类，对…进行分类

lolly 棒棒糖

tendency 倾向

miraculous 奇迹般的，不可思议的

wrath 愤怒，愤慨

payday 发薪日

trait 特征，特性，品质

commonality 共通性

narrative 叙事，陈述

vigilance 警觉，警惕

frugality 节俭

retain 保持，保留

on paper 理论上

savvy 常识，实际能力；有见识的

juicy 多汁的；生动有趣的，有吸引力的，富有刺激性的

obsessive 着迷的，迷恋的，难以释怀的

outperform 超过，胜过，比···做得好

worse off 变得更糟

part with sth 不情愿放弃，舍弃

immune 有免疫力，不受影响，受保护，免除

splurge 挥霍，乱花钱；大量的东西

the writing is on the wall 某个事情即将发生或已不可避免

reform 改过自新的，悔改的

save for a rainy day 有备无患，以备不时之需

unpack 解释，说明；打开箱包