We all make purchases that reflect our unique relationship with money. The following are a few scenarios to illuminate what I mean, see if you relate to any. You drive all the way to the other side of town, walk into the retailer and make the purchase you have been waiting for weeks to be on sale. Alternatively, you are the type that you use shopping as therapy, as a way to cope and unwind from the stresses of life. To you a new purchase is relaxing. On the other hand, you are the type that only buys brand names at the most prestigious shops to emulate the lifestyle of your favorite celebrity. You would not be caught dead in a discount chain like the rest of us commoners. In this blog post, I want to question your spending personality and ask you. What type of spender are you? How is your spending type affecting your financial goals?
Spending Personality Questionnaire
While preparing for my Credit Counseling Certification test I came across this spending personality assessment by Grady Nash and wanted to share it here. Sadly, I couldn’t find the original on the web but I did find the exact one from my study materials online here at (www.fundamentalfinanceacademy.com). Take the time to take the assessment. Place check marks on the descriptions that you can relate to and the one with the most marks reflect your spending personality.
Here is the questionnaire:
Shopper One 1. You shop for weeks for the best price_____ 2. Others consider your bargain hunting to be excessive _____ 3. You neglect quality in an effort to save money_____
Shopper Two 1. You make unplanned, impulsive purchases often_____ 2. You have little willpower when considering a purchase_____ 3. You buy items you don’t need because they’re on sale_____
Shopper Three 1. You put off making necessary purchases_____ 2. You are easily persuaded by salespeople_____ 3. You blame the product or salesperson when the purchase is unsatisfactory_____ 4. You rarely ask questions or feel insecure when talking to salespeople_____
Shopper Four 1. You shop to escape the pressures of life_____ 2. You spend money to get back at your spouse or significant other_____ 3. Buying certain items makes you feel superior_____ 4. You buy gifts out of guilt or to gain approval from others_____
Shopper Five 1. You prefer to shop in prestigious stores_____ 2. You avoid discount chains like Wal-Mart or K-Mart_____ 3. You buy items because others have them_____ 4. You buy items to impress others_____
Shopper Six 1. You have a collection, hobby, or activity others might consider excessive_____ 2. Others consider your spending on it to be excessive_____ 3. The collection, hobby, or activity is potentially harmful to your health or finances_____ 4. The collection, hobby, or activity is the cause of family conflicts_____
Shopper Seven 1. You worry about important purchases_____ 2. You put off important purchases for weeks and then make a sudden decision to “get it over with”_____ 3. When faced with complex financial decisions, you tend to get overwhelmed and make quick choices rather than thinking through all the variables_____
Here is an explanation (according to Grady Nash) of each type of shopper as well as strategies to overcome problem spending in the same order as above. For example, Shopper One is The Fanatical Shopper below etc.
1. The Fanatical Shopper. This is someone obsessed with getting the lowest price and is giving up a lot of time and energy; he/she is not seeing the big picture. Some fanatical shoppers hunt for months to save ten or twenty dollars but think of all the time and travel expenses involved. The effort just doesn’t make sense. Placing a value on your time and energy is a way to overcome fanatical shopping.
2. The Impulsive Buyer. This is the most common type of spender. That is why retailers put all those nick-knacks near the check out! Impulsive buyers lack control and do not plan before they shop. Leaving money at home while shopping is a way to overcome impulsive spending.
3. The Passive Buyer. Passive buyers are pushovers. They are easily persuaded to buy items they may not really want or need. They generally do not like to shop and put very little time and energy into making purchases even for big-ticket items. Asking questions when talking to salespeople is a way to overcome being a passive buyer.
4. The Ulterior Motive Spender. This type of spender uses shopping as a means of escape or to deal with stress. Often there are hidden emotions at play. For example, the ulterior motive spender may shop as a form of revenge against someone. They may also spend money as a way to win someone’s approval. Exploring other ways to manage daily stress is a way to overcome ulterior motive spending.
5. The Esteem Spender. This spender tries to “keep up with the Joneses” by shopping in the prestige stores and buying in order to impress others. Identifying what you value as opposed to what other people think is important is a way to overcome esteem spending.
6. The Special Interest Spender. This type of spender has a hobby, collection, or activity that is eating up a good deal of income. In some cases, the special interest spender is addicted to gambling, alcohol, or drugs. Reasons behind this type of spending could be boredom or a need to be unique. Finding new less expensive hobbies is a way to overcome special interest spending.
7. The Hot Potato Spender. These spenders procrastinate and worry about making new and unfamiliar purchases. Then, at the last minute, they buy as a way to quickly put the ordeal to an end. Trouble is, what they bought is probably far from what they really needed. Researching products before you buy them is a way to overcome hot potato spending.
After taking the Spending Personality Assessment, I discovered I am the Fanatical Shopper mixed with the Impulsive Buyer. I am a Fanatical Shopper because I buy most of the things I want (don’t necessarily need) during black Friday. I put off purchases for months to get those savings and to get the best deal. My motto is why pay more for the same thing. I am trying to keep as much of my money in my pocket. In addition, I always try the cheaper brand before I buy a named brand in most purchases. Over the years, I've learned and I am learning what I can buy cheap and what is worth buying for quality. I am part Impulsive buyer because I have bought items for no other reason except that they were on sale. I have items I never used or worn because they were on sale.
Strategies I use to combat my fanatical problem spending are to value my time and to take into account the gas costs when thinking of traveling far for a better deal. In addition, I research my purchases online for reviews and compare prices before I buy. Lastly, some stores have price match and will match competitor’s prices saving me gas money. To combat impulsive buying I make a list and take it with me when shopping and buy those items. In addition, when thinking of purchasing something on sale I had no interest in buying before seeing the sale sign I wait and I sleep on it. If I still want, I buy, but usually I do not. Lastly, I simply I ask myself do I need this and will it help or hinder my financial goals.
I hope this blog was informative, fun and interactive.
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