The Five Types of Money Spenders - which kind are you?

When you are preparing to buy a home, you are best positioned to become as aware of your money spending habits as possible. Especially if you are part of a couple, going forward into home ownership, because couples usually express more than one kind -- often opposing -- spending styles.

When you realize your Spending Style, you can apply logic to pure impulse, and go against your grain, in order to experience new things with money. To shake it up, and make life interesting now and again. Rebelling from your natural spending style doesn't have to mean losing your balance. In fact, it can mean bringing some balance to your habits with money, if they are too polarized.

For example, if you are extremely frugal, you might recognize that in yourself, and purposely go get a massage or take a hot air balloon ride--just to mix it up, and realize the world won't come to an end if you spend money lavishly once in a while.

Likewise, if you are impulsive and self-indulgent with money, you might challenge yourself to commit to a savings plan so that you can experience an enduring ability to reach long term goals -- such as homeownership.

Which of the following Money Spending Types are you?

The Super Saver
The super saver will drive across town to shop with doubled coupons at the grocery store. Will not buy anything unless it is marked down or on sale, or the best bargain. Keeps a chilly house in the winter, and a warm one in the summer. Holding on to money makes them feel secure, and spending money makes them feel anxious. Theirs is a fear-based relationship with money.

The Conservative 
The conservative doesn't enjoy shopping as a past time. Saves 10% of paycheck, and brings a lunch from home to work most days. Never buys something new when an old one will do. Is nervous paying on credit, prefers to save up for purchases. This relationship puts satisfaction into the future. The conservative wants money in order to have things in the future--not now.

The Free and Easy
The carefree spender wants nice things, and thinks about them until she can get them. Always has one major debt to pay off, but always pays bills on time. Buys what he can afford, within reason - spending habits fluctuate with income. Has little or no savings, but enjoys spending the money she worked to earn. The free and easy spender has a positive relationship with money, but can lack the focus and perseverance to achieve long-term goals.

The Big Spender
This spending style takes lots of vacations, buys clothes in the latest styles, and loves to treat his friends and leave big tips. Spending is a way to show her power and effect in the world, as well as a way to make herself feel good. Often borrows up to his credit limit, paying interest on purchases. Doesn't mind working to pay for things, but wants them now.

The Overspender
Is always hoping to win the lottery. Has had to put all her debts together and turn in her credit cards. Owes money to the IRS. Moves to a more expensive place when he has more money, and moves to a less expensive place when he has less. Agrees to buy things even if she doesn't have the money for them. Will over-buy things, and then take them back to stores for refunds in order to keep checks from bouncing. Spends money to make himself feel important, and pretends not to have money problems.

So...which of these remind you of yourself? You may recognize family and friends and your partner in some of the other profiles as well. Are you satisfied with how you deal with money? What would you like to change?

Is a house worth altering your natural spending style?


Adapted from the NeighborWorks America homebuyers manual, 4th edition.