Receive regular updates via email

Are you a saver or a spender?

Figuring out if you are a saver or a spender seems to be a simple proposition. Simply put, if you spend more than your make, then there is no chance that you can be a real saver, since your liabilities will be greater than your assets.

If you have a BBT checking account with a balance that makes you feel good when you look at it, but at the same time you have a credit card bill that is higher than the bank balance, then your are fooling no one but yourself.

Rather than staring at a bank balance, one should think about saving in a more general way. Think of savings as an attitude or a habit that makes it more likely that you have positive financial things happening in your life. Having a savings habit doesn’t guarantee that positive financial outcomes will happen, but it makes it more likely that they are happening in your life.

In the following simple example, imaging that the following money habits or money situations are true:

  • Having a savings account with a high interest rate is better than having one with a low interest rate (note that banks typically give higher rates for accounts with higher balances).
  • Paying off a car loan is not as attractive as owning a car free and clear.
  • Paying off a card in full at the end of a month is better than carrying a balance.
  • Spending less than you make every month is better than having some months where you run out of money or have to dip into your savings.
  • Believing that savings is easy is better than thinking that savings is hard.
  • Saving for a special project or for your health or education is better than not doing so.

Reading about good examples stimulates your mind in one way, and looking at pictures stimulates a different part of you mind. You can check out at the infographic below and the words above and between the two you should be about to figure out what good money habits would work for you.

Savers Vs Spenders Infographic by Newcastle Permanent Building Society

Money in marriage

This is a post that discusses this post about a man who finds out that his wife has been hiding credit cards from him while he’s been working to pay off their debt. It’s an interesting story, but what really got my attention was the comments.

The post describes a husband dealing with his wife’s duplicity in finance. Many of the commenters were also men who wrote about their wives who hid their spending, were heedless overspenders, or were generally deceitful. There were also several women saying “It’s not just women who are bad at money, my husband’s the spender and I’m the saver…” and many comments to the tune of “Of course this happened, women are all bad with money and love to overspend, don’t marry them or you’ll be wasting your time and hard-earned cash.”

Being a female saver, I don’t like the tone that these men took. I wouldn’t like it even if I were a spendthrift, because they were stereotyping women, using their own experiences and the “stereotypes become stereotypes because they’re generally true” excuse for calling all women bad at finances.

This is, flatly, not true. Yes, there are certainly women who are terrible spendthrifts, either intentionally or accidentally, because they love it or to make up for some other psychological lack. There are men who are the same way. There are women and men who are masterful with their finances. A handful of people’s experiences doesn’t prove anything. The plural of anecdote is not data.

There’s truth in the idea that women are less knowledgeable about and less responsible for their money on average, absolutely. This is because our society is still growing out of the societal norm wherein men earned money and were expected to handle it, while women got allowances and weren’t expected to know anything about finance. That’s changed, fairly recently and perhaps too suddenly for some; there are women out there who know nothing about money because they haven’t been taught and haven’t been expected to learn, but suddenly they have access to $20,000 in credit and no real idea of what that means.

But you can always find an example of whatever stereotype you prefer to hold. The bigger truth is that it’s not women who are bad at money or men who are bad at money; some people are bad at money. And if you’re married to one of those, it’s important to understand that and be able to work with him or her to figure out your finances together. And it’s vital not to assume that your wife is a compulsive spender because she’s female, just as it’s important not to assume your husband can fix your car because he’s male.

There’s some interesting information here on how marriage and money interact (including a poll that says, among other things, that husbands tended to underestimate “how much women care about almost every financial issue”). But possibly the more important thing you need to know about money and marriage is the simplest: that your marriage and your money need to be dealt with in the unique way you and your partner decide on, not based on other people’s stereotypes and outmoded cultural ideas.