We’re quick to point out our partner’s financial flaws, but not so much our own — and that’s the stuff breakups are made of. How to tell if you’re truly a saver or a spender.
Knowing this could save your relationship.
People are more than twice as likely to say that they’re a saver, while their partner is a spender, versus the opposite, according to new data from SunTrust Bank. Turns out 28% claim that they’re a saver, while their partner is a spender, yet only 13% say that they’re a spender and their partner is a saver.
While it’s not clear exactly why there’s such a large discrepancy, it may be because we’re more willing to explain away our own spending as being due to external, justifiable factors, while we blame our partners spending on their innate characteristics. “It may be that people see their partner’s poor spending habits as a result of their partner not being a saver. However, when people who believe themselves to be savers don’t spend wisely, they believe it’s due to circumstances — there was a big sale so I’m justified in spending,” explains L.A.based-psychologist Crystal Lee. And Brian Nelson Ford, a financial well-being executive at SunTrust, says that “people are naturally inclined to think that what they buy is really necessary, but what their spouse or partner buys is frivolous or wasteful.”
Money fights are common – half of married Americans or those living with a partner say they fight about money – and spending habits are the No. 1 cause of money fights in a relationship. And those fights lead to breakups. Indeed, data from financial firm TD Ameritrade found that 41% of divorced Gen Xers and 29% of Boomers say they ended their marriage due to disagreements about money, and a study of more than 4,500 couples published in the journal Family Relationships found that if you’re arguing about money early on in your relationship, that’s the No. 1 predictor of whether you’ll end up divorced.
And yet, people are still telling themselves that they are savers while their partners are spenders — which is likely to drive big-time arguments and ensuing breakups. It’s also likely untrue: More than six in 10 Americans (61%) say they don’t even have enough in savings to cover a $1,000 emergency like a visit to the ER or car repair, according to a Bankrate.com report released Thursday — even as experts recommend that Americans have a least three to six months of income in the bank to pay for unexpected emergencies. What’s more, the vast majority are majorly under-saved for retirement with 1 in 3 literally having put nothing away.
Another reason people may think they’re savers? They don’t understand what it means to be one — and really do think they are one even when they’re not. So we asked experts: how do you know if you’re a spender or a saver. These questions can help you answer that.
Do you earn enough to be able to hit the big savings milestones — and yet you don’t?
Experts say that you should have about six months of income socked away into an emergency fund, and be putting away 10% or more of your income into retirement savings. “A spender is someone that is able to do all of these things but chooses not to,” explains certified financial planner Jean Marie Dillon, a principal at Freedom Financial Counseling.
However, she notes that just because you don’t do these things doesn’t mean you are a spender: “Some are financially unable to do all of these things based on their incomes. This doesn’t make them spenders. They are survivors,” she says. You also may not be meeting these savings goals because you are paying down debt, but if you’re doing that quickly (paying way more than the minimums on higher interest debt for example, and forgoing a lot of spending to do that), you may also be a saver.
Does putting money away from a rainy day — or your retirement — give you joy?
Kimberly Palmer, a personal finance expert at NerdWallet, says that a saver “is someone who enjoys saving money — it may not always be possible to save a specific target, like 15 percent of your salary, but savers are constantly striving to do so and take genuine pleasure from transferring money into their savings accounts.” Meanwhile, spenders”take more joy from buying things than from saving for the future.” Take a look at recent purchases and savings this month and think about what category you really fall in.
In general, are your savings growing or is your high-interest debt growing?
We all have setbacks — emergencies like a car that needs fixing, or a medical bill that must be paid — that can waylay our savings rate, but in general are your savings growing and/or your is your debt getting reduced quickly? If that’s the case, you’re likely a saver. “Meanwhile, people whose “debt is growing, particularly consumer debt … are almost always spenders,” explains certified financial planner Scott Cole, founder and president of the ColeFP and Wealth Management.
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