By Shawndi Purselley, CFP®, CDFA®, Owner and Co-Founder, Wealth Advisor

Lord knows I have my share of personalities! However, have you ever considered what your “spending personality” is? I think a person’s spending personality is an important concept to understand. If you can grasp the type of spender you are, then you can focus on changing your bad financial habits. I will be the first to admit that when I was thinking through these, I found that there have been instances when I have exhibited each of these personalities depending on what the circumstances were.

Below are the four spending personalities I see most often when working with women as a financial advisor.

The YOLO Spender. This woman spends money based on the “you only live once” philosophy. I admit, a YOLO spender is a fun woman to hang around. However, they probably don’t have a great financial plan in place. It’s very easy for this type of spender to go overboard on lavish purchases and justify it all in the name of YOLO. My argument to this point is “what if you live longer than your money?” I tend to find myself YOLO shopping on vacation. Due to this YOLO habit, I set a budget for myself for vacay spending.

The Emotional Spender. This woman is not necessarily a woman that just loves to shop or spend money. Rather, she allows her emotions to affect her spending habits. The Emotional Spender will spend money to go out to eat after having a great day just to celebrate. Or, she may go buy a pair of shoes to forget about a bad day. If this woman has had a stressful day, she may opt for one of those “expensive” pedicures instead of the express mani/pedi combo. This spending personality is best squashed for me if I don’t carry around credit cards but instead rely on my budgeted “carry around” cash or my debit card. I tend to feel the sting of spending my cash and/or knowing it is coming out of my checking account right away. This method definitely curbs any emotional spending.

The Savvy Spender. This woman is very well balanced. She is always willing to spend money, but always with a frugal mindset. The spender believes in quality over quantity and will pay more for something that they feel is worth it. For example; instead of buying 5 pairs of cheap shoes, she may buy two pair of nice, classic style shoes that are comfortable and will last. A savvy spender also tends to spend her money on experiences vs “stuff.” I think I have naturally gravitated toward this type of spender with age. I know when I was young, I wanted a shoe in every color. Now, I just tend to buy the basic neutrals.

The Miser. This woman views ANY sort of spending as stressful and guilt-induced, even when necessary. She tries to cut corners at all costs. This type of spender usually has a personality that is based on some sort of fear about not having enough. Large purchases tend to bring out this personality in me. When I am faced with having to spend money on things like a whole vacation, upgrades to my home, or college expenses for my kids I tend to become a miser. I have an emergency fund and started 529 plans for my children when they were young. Having the money set aside and budgeted for these types of expenses has helped me with the stress of large purchases. That being said once I have money in a savings vehicle, I feel guilt induced by needing the money and spending it. It is something I continue to work on and remind myself these exact expenses are the reason I have saved the money in the first place.

Build a plan for spending. Overspending happens easily without a plan. I believe most of these spending habits (personalities) can be controlled by simply building a plan for consumer spending as well as for those needed large expense items. How do you get started? My suggestion is to track all of your spending for 60-90 days and then categorize each dollar. You can then see where you are overspending. Then, create a family budget around your “needs” and “wants.” It is easier to build a plan going forward when you know where you have been. For example; if you find you are spending $500 a month on going out to eat, then agree to reduce this to $250 per month. My suggestion for large expenses is to set aside an alloted amount of money each month into a separate account earmarked for those specific expenses (such as car, home repair, college and large trips). With these simple tips, I think you will be well on your way to becoming a savvy spender. Please be sure to give us a call if you would like help building a tailored plan that is just right for you and your family (and spending habits!).

Investors should consider the investment objectives, risks, charges and expenses associated with municipal fund securities before investing. This information is found in the issuer’s official statement and should be read carefully before investing. Investors should also consider whether the investor’s or beneficiary’s home state offers any state tax or other benefits available only from that state’s 529 Plan. Any state-based benefit should be one of many appropriately weighted factors in making an investment decision. The investor should consult their financial or tax advisor before investing in any state’s 529 Plan.