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Do You Have a Spending Personality? |
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Many people have a primary spending personality that may affect how they use money. J. Grady Cash wrote a book entitled Seven Deadly Money Mistakes in which he identifies seven
spending personalities. We will feature seven of the most common personalities including impulse buying, fanatical shopping, passive buying, avoidance shopping, esteem buying,
overdone buying and hot potato buying.
Keep in mind that we understand that consumers acquire debt for various reasons. We realize that many times family or medical emergencies can create financial circumstances beyond
your control. This article is simply intended to provide some insight on how you may relate to money and question certain spending habits.
Impulse Buyer
Scenario: Ellie goes to the grocery store to buy a loaf of bread and a gallon of milk. She leaves the store with bags full of food. Her next stop is the discount department store
and she plans on purchasing a toy for her niece's birthday. When she is in the store, she starts browsing through the aisles and puts some items in the cart that she thinks are
great deals and absolute necessities. As she is leaving the store, her jaw drops when she looks at her receipt and realizes that she spent nearly $100 on purchases that she did
not plan on buying.
Solutions: Ellie should have considered sticking to her list at both stores. Large grocery orders are usually better planned ahead of time instead of buying a lot of food
randomly. She should not have bothered to browse at the department store, which can easily lead to impulse spending. If she saw something that she may want to buy, Ellie should
have walked away and thought about the purchase for 24 hours.
Like any spending personality, impulse buying exists in people to varying degrees. In severe situations, impulse buying can become a habit and a clinical addiction. Impulse
buyers enjoy the instant gratification and the emotional rush from buying. For most people, impulse buying is a personality that exerts itself more frequently with smaller
purchases rather than larger purchases.
Fanatical Shopper
Scenario: Doug prides himself on being able to find the lowest price in town. Every week, he studies all of the advertisements in the Sunday paper and makes lists of the items he
is going to purchase at every store. He also cuts out all of the coupons and spends many hours organizing them. His Sunday routine would include traveling to Store #1 because
they have toothpaste and juice on sale. The same store also has shampoo on special. But, he plans to go to Store #2 even though he has to drive 7 miles out of his way because
it is 20 cents cheaper when he uses a coupon.
Solutions: This short scenario indicates that Doug is certainly concerned about his finances because he does put forth effort to find good deals. However, he may need to consider
the time and resources in an attempt to save just a small amount of money. With gas prices at record highs, driving around town to find the lowest price may not always be the
best solution.
Fanatical shoppers have a compelling desire to control money, perhaps an insecurity that they will not have money in the future. Therefore, they see every purchase as a win or
lose proposition. If they do not get the lowest possible price, they feel defeated. The ironic thing about fanatical shopping is that quality, time, and money are often ignored
during the quest for the best deal.
Passive Buyer
Scenario: Linda does not like to shop, especially for major purchases. She needs a new laptop for her small business and has limited knowledge of technology. She goes to an
electronics store and a persuasive sales associate convinces her that she needs a state-of-the-art computer even though she knows she only needs it for simple tasks such as
e-mail and word processing. As a result, she will spend $4,000 for her new laptop.
Solutions: Although Linda does not know much about computers, she could have researched prices online or looked at advertisements to find average costs for a basic laptop.
She could have also gone to the store with a friend or relative that was more familiar with computers.
Passive buyers can be a salesperson's dream. Some have the potential to be good shoppers, but feel they don't have time or do not place a high priority on saving money. They
do not comparison shop and are too embarrassed to ask questions even if they do not understand. Passive buyers do not want to appear uneducated. This can leave them vulnerable
to salespeople talking them into expensive "extras" such as extended warranties.
Beyond Your Personality
For years, society never recognized compulsive spending as a psychological addiction. In fact, some individuals would make jokes about this problem. Many retail stores still
sell novelty items such as mugs and t-shirts that read, "Born To Shop," and "When the going gets tough, the tough go shopping."
At this time, most psychological professionals do acknowledge compulsive spending as a disorder. As with other addictions, compulsive debtors use shopping as a way to escape
from emotional problems and stress in their life. Similar to Alcoholics Anonymous (AA), a 12-step program called Debtors Anonymous (DA) exists for individuals who are trying to
overcome compulsive spending. If you think you may have a compulsive spending problem, consult a licensed therapist or visit
www.debtorsanonymous.org for more information on the organization and meetings in your area.
Avoidance Shopping
Causes: Shopping instead of dealing with problems or shopping to get even
Solutions: Face underlying problem, be honest with yourself
You may have heard the phrase, "When the going gets tough, the tough go shopping." Avoidance shoppers use shopping as a way to escape the stress of life. Unfortunately, this
spending personality can cause a downward spiral and lead to excessive spending. When shopping in an emotional state, it is difficult to spend smart. If this avoidance becomes
a habit, the underlying problem does not disappear, it may only fester and becomes worse.
Esteem Buying
Causes: Peer pressure, desire to appear successful, wants to gain self-esteem by shopping
Solutions: Separate self-worth from possessions, gain self-esteem in other ways
Esteem buying is the second most common spending personality after impulse buying. It is common among those influenced by their peers (teens, social climbers, etc.). Possessions
may make esteem buyers feel happy and successful. They also tend to imitate the behavior of individuals that they admire. "Keeping up with the Jones" is one of the major
contributing factors to exploding consumer debt.
Overdone Buying
Causes: Usually related to an excessive hobby or behavior; can be a dependency
Solutions: Acknowledge the behavior, avoid situations that encourage the spending
Overdone buying is typically related to a hobby or behavior. The problem of this personality arises when one becomes infatuated with a habit or hobby to the point where it causes
financial problems. Overdone buying may include classic examples such as drugs, alcohol, eating, gambling, etc. These habits may cause a double whammy. They not only ruin your
financial situation, but may also cause health problems as well.
Hot Potato Buying
Causes: Preceded by an emotional event, worried indecision about purchase, impulse shopping
Solutions: Step back from the situation, educate yourself, make a decision only when calm
Hot potato buying are two phases of extremes. It typically begins with an extended period of consideration and worried indecision, followed by impulsive action. The behavior is
very similar to passive buying. Hot potato buying usually occurs with a major purchase or financial decision and is often preceded by an emotional event. A good example would be
when a spouse or relative dies and the survivors must decide what to do about investing the estate proceeds. The financial magnitude of this decision can make hot potato buying
one the most dangerous spending personalities, even though the circumstances happen rarely.
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