Spending vs Saving: Which One Do You Do?

Going into 2024, you must figure out what you are best at.

If you are good at saving money, then well done to you as you are better than most.

However, if you know you prefer spending money instead, you should make adjustments in your life to solve this. 

Money management is a skill that only a select few have. Other people have to teach themselves to be good with their money.

This is a life skill people learn from a young age when given pocket money; however, not everybody has that opportunity.

Let’s see if you are a spender or a saver before we go into 2024. 

Do You Spend Or Save? 

Let’s get straight into it and ask yourself, do you like to spend money or save it?

If you spend more, you should look to save/invest more, but you don’t want to save all your money.

You should also feel the enjoyment of spending some of your money to a certain extent. Let’s look at the traits of a spender. 

Ask yourself whether you are happy to spend money or impulse buys such as shoes, a new television, or even a fresh piece of steak.

Something else you need to ask is whether you are willing to take on debt or invest your money.

The final thing is that are you willing to buy nice things rather than look for cheaper options?

If you are answering yes to at least two of those things, you are a spender. 

What about the traits of a saver? Well, a saver will tend to be more cautious with their money, even when buying drinks/food with friends.

Savers will also want to avoid debt as much as possible and not want to invest their money.

Furthermore, they are likely to spend less on a new phone or clothes as they prefer to have a healthy bank balance. 

How To Find The Right Way To Spend and Save

Although being a saver is a good thing, you still need to feel the enjoyment of spending money.

You don’t want to be tight with your expenses every month to avoid debt. Although it is a good mindset, it isn’t the perfect mindset to have with your finances. 

Creating a budget plan is essential to getting enjoyment from both.

Not only will it allow you to pay off all your expenses each month but let you enjoy the little things such as the odd takeaway or a new pair of trainers.

If you want to enjoy both, you must consider the spend and save ratio. 

One of the most common methods to enjoy spending and saving money is the 50-30-20 rule.

It is a common method many financial advisors advise. Even some financial debt advisors suggest this to help you pay off your debts.

The 50-30-20 is simple. 50% of your income goes on rent, bills, mortgage, groceries and transport costs. 30% of your income should be on fun things such as paying for Netflix, eating out with friends or even booking a holiday.

The final 20% is money you should use to pay off debt, invest or put into a savings account.

You can also split this 20% into a savings and investment account. 

Summary

Finding out which you are best at is important to a healthy, financially stable life.

You don’t want to be that friend who doesn’t go out because they are saving money.

Furthermore, you don’t want to be that friend who can’t afford to put a deposit down on a house because they are always spending their money. 

Tags: Money management, Saving, Spending

Category: Family Finances