Tis the season to be jolly. With the 2020 holiday season officially underway, people are busy trying to figure how they are going to be handling their spending during the holidays.
This isn’t likely to be a normal holiday season. With the Covid-19 pandemic still wreaking havoc on the lives of people all over the world, it’s difficult to predict how much they will be managing personal finances this year.
With nowhere to go, people will likely still spend money, in light of the fact they have been shuttered in the house all year. A little holiday shopping to prompt getting out of the house might be exactly what the doctor ordered to deal with the stress people are reporting. Of course, employment issues will likely dampen the enthusiasm for the holiday for a lot of unfortunate families. That’s the point. With everything in disarray, it’s difficult to predict what’s going to happen this year.
Regardless, it’s a good bet that people will be driven to spend or save based on their personality. Yes, everyone has a guiding light that directs the way they manage their finances.
Factors That Determine the Desire to Spend or Save
All of us are the sum of our life experiences. Somethings we learn from others, and somethings we learn by trial and error. With this in mind, experts have been working to try to pinpoint the factors that play a role in forming our attitudes towards managing personal finances.
For certain, you can assume part of your feelings about money come from your family upbringing. If your parents were staunch savers, there is a reasonable chance you carry with you the discipline to put savings away for a rainy day. Conversely, you probably have problems managing your finances if your parents had a habit of spending money frivolously. By the way, children tend to emulate their mom’s habits, not dad’s.
Another factor that might be influencing your approach to financial matters is your life experiences. It is noteworthy that after the great depression in the early 1930s, people began to hoard cash. After losing family fortunes, people were driven to protect their financial stability at all costs. This is a normal reaction to a stressful event.
If you think about it, likely, something has already happened in your life that is affecting your views towards financial matters. It’s also possible that future occurrences could change your attitude in an entirely different direction.
Surprisingly, there is no evidence to suggest that someone’s income impacts their money habits. It’s simply a matter of proportion. People with more financial resources either spend more financial resources or save more financial resources.
The Psychology of Spending
Ultimately, the way you manage your finances will depend on how comfortable you feel with handing your cash over to a merchant. If your focus is more on what you get in return, you are likely a spender. If letting go of financial resources causes you to experience stress, you have the personality of someone who prefers saving for financial stability, a saver.
Let’s take a closer look at these types of personalities.
The fact someone prefers buying over saving indicates they don’t mind living life to the fullest. Instead of worrying about how much money they will have in the future, they prefer investing in the here and now. They see shopping and buying as great forms of entertainment.
The spender also tends to be someone who is easily distracted and easily becomes bored. They see their financial resources as a means for creating excitement in their lives. Of course, the potential for going too far is always there. If someone goes out on impulsive buying binges to deal with personal issues, they could end up getting themselves into financial trouble.
Finally, spenders can be a little self-absorbed and sometimes narcissistic. They use the things they buy to create a persona of importance. These are the kinds of people who are always out there competing with the Joneses. A little harmless buying competition is okay as long as things don’t get out of hand.
The personality traits associated with a saver can be divided into two categories: the traits of a strict saver, and the traits of someone who truly struggles with the idea of using their financial resources.
The strict saver is often obsessed with the idea of saving money. They tend to constantly monitor their bank accounts and don’t often allow themselves to enjoy the finer things in life. For them, financial security is the finest thing in life. These are people who only buy at bargain shops and often troll newspapers and publications for coupons and discounts.
While the strict saver will make purchases but do so with an eye on being frugal, the person who struggles with spending truly hates the idea of buying anything. Sometimes, their obsession with holding tight to financial resources causes them other difficulties in their lives. Things like self-neglect come to mind.
In general, the folks who fall within these two categories tend to be mildly sad. They don’t seem to focus much on doing things to make themselves happy. They make a budget and plan to ensure they have ample savings for the future and retirement. Unfortunately, they often get to the future and retirement without having had the opportunity to experience some of the amazing things life has to offer.
As you head out to take part in the hustle and bustle of the holiday season, you might want to think about your own psychology as it relates to your money habits. Remember, nothing is etched in stone. After reading this information, you now have a new level of awareness about how you view your personal finances.