In last week’s segment we started the discussion about savers and spenders. Before you can really gain control over your money, you have to understand your natural tendencies toward money.
Whether you are a saver or a spender, don’t worry, you can still handle your money well, accumulate wealth and enjoy the ride. You will need a plan, but the way you go about implementing that plan will be different based on your dominant saver/spender tendency.
If you took the test last week, you already know which one you are. If your money is tied to someone else, like a spouse you will need to know whether they are a saver or a spender too.
Once you are armed with this information you are ready to set your plan in motion.
If you are a saver or you are a saver in a relationship with another saver, your path to creating wealth is much easier. You each have an “in case of” list and together your combined list is huge. This will provide you with plenty of motivation to save money.
Your challenge will be to enjoy your life without the constant focus on buying the cheapest thing so you can save more money. Keep your eye on your saving target and splurge once in a while.
If you are a spender or you are a spender in a relationship with another spender you will have the hardest time accumulating wealth.
You won’t have the hardest time making money because spenders love the risk of trying new things and sometimes it will pay off with big monetary gains. Your challenge will be to save some of it.
You won’t be able to do it alone and you will have to make an agreement with yourself and your partner if you have one to handle all of your money issues together. You will have to shine the light on your money to keep each other on track. If you work together, you will find that you are a powerful team. If you don’t, you will continue to struggle with your money.
Here are two other combinations of savers and spenders in relationships.
The saver/spender relationship where the saver controls the money. This is the only one that has any chance of working because the saver will do what they can to put some money away and make sure the bills get paid on time. The problem in this dynamic is that the saver generally thinks they can dictate to the spender how much they can spend. The saver will have to make an agreement with the spender that the spender agrees to. Here is what must happen to make it work.
The spender must have their own spending account where they keep their own spending money. They must agree to…
1. Not use credit
2. Not touch the family money and in return,
3. They do not have to account for where they spent the money in their spending account.
A note to the Savers in this scenario:
If you structure your money this way, you will have set up a system where the spender won’t mess up your ability to pay the bills so you can still put some money away. Your spender will be happy and you can avoid uncomfortable money discussions in the future.
Our final dynamic is where you have a saver/spender relationship where the spender controls the money. It is important to note that in this dynamic, the spender does not want to deal with the money, they just want access to it.
You both have to sit down and agree to having the saver control the money and the bills. The previous example works the best but if you just can’t agree on that, the compromise is to handle all of the money together. Like two spenders have to.
Remember, savers want to save money “in case of…” and spenders need the thrill of buying. The two can work together and be successful, but you have to set it up correctly.