Are People Natural Savers and Spenders?

It seems that there are people you meet that just seem to be naturally “good with money” or naturally “never have a dime to their name.” There are the people that easily buy a home, have a retirement fund as soon as they have their first full-time job and know the difference between their IRA and their 401(k). There are also, inevitably, the friends that can’t meet you for dinner “until payday” or the ones that are borrowing from their parents or girlfriends well into adulthood.

The question to be asked here is, where do people learn these behaviors? Are financial habits environmental? Are certain people natural savers? Are there others who naturally spend everything they have, overdraw their checking accounts and seem to always be veering financially out of control with little idea how to stop themselves?

We asked Richard Cayne, financial planning consultant with Meyer International, if he believes that people are natural savers or natural spenders, where people learn their financial habits and whether there is any chance of bringing a natural spender back to the saving side.

Talking About Money Leads to Thinking About Money

“The tendency to save or spend is nothing that you’re born with. It’s a social thing that you pick up and a product of the environment you are born in. If you’re around people that talk about money all day, you think about it all day – that’s the truth and it’s a proven fact,” said Richard Cayne.

“If people around you never talk about money, you are less likely to spend time thinking about it or have an awareness of it. For people like this, money tends to exit their wallets very swiftly,” he continued.

Family Ties

People definitely learn what they think about money from watching their parents – but what effect what they see has on them can be vary. People can grow up to have very similar money habits to their parents – or become financial polar opposites.

Think of the child that grew up poor that swears they won’t live that way when they grow up – they don’t want to constantly worry about money as their parents did. Or the rich kid that denies his family’s fortunes and decides to live penniless.

However, if people grow up with parents that manage their money well and have enough for what is needed – a healthy attitude towards money – the children will usually end up with the same habits.

According to Richard Cayne, “Some people end up just as useful or useless as their parents, others take a lesson from that and learn new money skills,” said Cayne, who has seen clients of both kinds.

Can People Reset their Tendencies?

Yes, people can do anything they want to do. Cayne likens it to someone who has been overweight for a while. “You can lose the weight, it’s not easy but you can do it.”

“Habits are hard to change and it’s scary but the more you think about it and the more devoted you are to it, the more realistic it gets,” he said.

Cayne suggests that anyone wanting to change their spending habits start by working backwards. Start by knowing how much you need or want to save each month to reach your goals and work on your budget backwards from there, cutting the unnecessary as you go.

Whatever your goals, a certified financial planner can sit down with you and help you figure out how to reach them.

For further information about saving, spending and other investment topics, Richard Cayne and Meyer International can be reached at (+66) 02 611 2561