Understanding your spending habits is important to creating a plan that will ensure you reach your financial goals. We all spend money for personal reasons, often times on a whim, and can easily end up with purchases we regret, and debt we can’t afford.
In the worst cases, mounting debt that you can’t repay will affect your credit score. A low credit score can hold you back, but Wonga offers a helpful guide to understand your options, along with tips to help you improve your credit score.
Find out what kind of spender you are with our list below:
Sentimental: You spend money on items that remind you of someone you love, someone you lost, or of a time that was special to you. You might indulge in retail therapy because it makes you feel good. These aren’t items you need, but items you want.
Sales: You can’t resist a bargain, and will always shop a sale. You see a reduced price tag as saving you money, even though it’s not really an item you would have bought at full price. You feel like you’re missing out if you don’t go into a sale.
Influenced: You’re taken in by a good marketing campaign, and seduced by the right words and pictures. If you’re shopping with friends and family, you’ll buy as much as they do, and are influenced by what they choose to buy.
Needs: You only buy something when you need it, and make a list each time you shop. You stick to your budget and don’t buy things you don’t need.
Whimsical: If you like something, you buy it. You don’t give much thought to the price tag – you can put it on your credit card. You’ll worry about paying it off later; right now you’re having fun.
Generous: You usually spend money on other people. You buy things you think they might like, or that you think would be good for them – no occasion necessary.
Online: You spend a lot online, and the click of a purchase gives you a rush. You enjoy looking for deals or bidding on online auctions. You don’t really keep tabs on how much you spend online.
Once you’ve identified your spending style above, ask yourself what your triggers are, and what can you do instead of shopping when you feel a certain way. Also, ask yourself what kind of spender you want to be.
Most people are a variety of the above, or might find themselves being particularly flighty or frugal at different times of the year. When it comes to reaching your financial goals, understanding what motivates you to spend and why can go a long way toward helping you control your spending, and reigning it in if needed.