Which spending personality are you?

Have you ever set a financial goal or promised yourself to make a change, only to let old spending habits take over? If this is the case, you may want to discover your spending personality type, as it could be holding you back financially.  

Your spending personality describes your emotional response to money. It’s a product of your childhood experiences, observations from your parents, and your level of financial literacy. Your spending personality largely determines how you manage money as an adult. There’s no ‘cookie cutter’ profile of someone who gets into financial trouble. While the reasons, facts, circumstances, and events that lead to financial difficulties are unique, certain spending personalities are more likely to carry higher debt loads. 

Understanding your spending personality can help you identify your triggers and the emotional responses they lead to. Knowing your type can help you recognize, break, and make new spending habits.

These three spending types have the most debt. Do they apply to you?

The impulsive spender

The impulsive spender focuses on wants instead of needs and tends to make purchase decisions in the moment. This personality type seeks out opportunities to spend, whether it be on large or small items. Consistent, unplanned purchases are common with this personality type, and due to their spontaneous nature, impulsive spenders usually carry higher amounts of credit card debt. Even if there’s no cash in the bank to buy the item, the need for instant gratification takes over, easily fulfilled by credit cards.  

You might be an impulsive spender if you: 

• Spend money on things you don’t necessarily need 
• Find yourself shopping to feel better 
• Shop without a budget or spending plan 

The social spender

Social spenders are those who make purchases for themselves or for others to boost their self-esteem. They tend to be the one who always insists on picking up the dinner tab or buys unexpected gifts for others ‘just because.’ Social spenders care what others think about them and want to be seen as generous, admirable, and needed. Lavish spending behaviours and extreme generosity often don’t come from having wealth but rather anxiety about maintaining social and financial appearances. Social spenders are willing to put their financial stability at risk to fund their image, resulting in the overuse of credit and large amounts of debt. 

You might be a social spender if you: 

• Go over the top for holidays, birthdays, and anniversaries, ‘just because.’ 
• Experience fulfillment or pride when treating others. 
• Feel you must give gifts to achieve social acceptance or appreciation. 

The avoider

The avoider 

Avoiders don’t have money management on their radar. This spending personality is uncomfortable discussing their financial situation and simply avoids the topic. For many, this behaviour comes from growing up in a household that didn’t talk about money or from a past stressful financial situation. The danger with avoiders is that they generally have no idea how much is in their bank account. They also neglect important aspects of financial wellness, such as their credit score, budgeting, and emergency savings. Often, avoiders let unopened bills and emails pile up because they’re uncomfortable or uncertain about how they might feel when opening them. Their ‘out of sight, out of mind’ approach to financial management can be very damaging, typically resulting in poor credit and a large amount of debt.  

You might be an avoider if you:

• Spend freely without a budget or sense of your financial standing. 
• Ignore bills, emails, and phone calls that have to do with your finances. 
• Avoid discussing your finances because it makes you feel anxious or ashamed.

How do I change my spending habits?

It can be intimidating to address how your habits impact your financial well-being, especially after years of building them. The good news is that changing your spending behaviours and relationship with money is possible! Even the smallest changes can yield big results. Follow these tips to start taking control of your finances: 

Stay informed. Broadening your financial literacy skills will help you confidently make financial decisions, meet your goals, and manage your money effectively. A great place to start is our debt help hub for simple, easy to use resources.

Know where you stand. Looking at your current financial situation can help you understand what changes you need to make. A good place to start is by understanding your credit score and how you can improve it. 

Build a budget. Following a budget is the most important tool for those struggling with spending habits. New to budgeting? Check out our budget guide to help you get started. 

Set a goal. A financial goal is a target to aim for when managing your money. Financial goals give you a sense of direction, help guide decision making and act as a source of motivation. We’ve developed a financial goal-setting guide, with examples you can achieve this year.

Your spending personality isn’t permanent, and neither is your debt. If debt consumes your financial well-being, it’s time to speak to a Licensed Insolvency Trustee. We offer judgment-free, 30-minute consultations to help you find the best path to debt freedom. Book online or call us today at 1-844-4GT-DEBT to start your path to a brighter financial future.