What’s Your Money M.O.? Here’s A Guide To The Most Common Spending Habits

What do your shopping bags say about you? We’re not talking about your sense of style, but rather how you’re choosing to spend your cash. The holiday season is one of the most expensive times of the year. With travel, party prepping, and gifting, it all adds up fast — so much so that the average American racked up more than $1,000 in holiday debt last year, up 5 percent from the previous year. So, how do you put the kibosh on creeping debt and avoid getting swept up in spending fever? For starters, figure out your financial personality.

“As women, our relationship with money tends to be complicated and emotional,” explains Cary Carbonaro, a certified financial planner, author of The Money Queen’s Guide: For Women Who want to Build Wealth and Banish Fear, and expert on Tone Network. But an emotional response to money isn’t necessarily a disadvantage, she adds. If managed right, it can actually help determine your money M.O. and put you on a path to reap future financial rewards.

Start by reviewing your recent purchase history and pinpointing any emotions your purchases bring up. Joy? Anxiety? Frustration? “We all have conscious or subconscious reactions to money — it’s how we make our decisions,” explains Carbonaro. “In fact, women approach money with three emotionally rooted responses, which is part of what I call the ‘Money Mind.’”

The first response is happiness. If you have a happiness money mind, she explains, you get excitement and gratification from spending money. The second is fear: “If you have a fear money mind, you can never have enough money because you’re so afraid you’re going to lose it, run out or need more,” she says. “Sometimes this fear paralyzes you from making important decisions in your life, especially surrounding finances.” The final response is commitment, in which you are more focused on taking care of others than taking care of yourself.

Why does this matter? Identifying what camp you fall into, which you can do by taking Carbonaro’s test, can help you understand what’s driving the spending decisions you’re making on a daily basis. Sometimes these choices become so automatic and habitual, we don’t even think twice about them, distancing ourselves from the decision-making process altogether. But when you start becoming more mindful and managing your emotions around money, you’ll get more bang for your buck.

Below, Carbonaro shares her tips on how to tackle some of the most common spending habits.

Impulse Spending

Impulse shoppers want instant gratification, falling under the happiness money mind, says Carbonaro. You want that purse? Sleep on it and see if you still want it the next day, she suggests. Then, figure out if you can afford it. “If not, set yourself on a positive path and budget for it.”

Stress Spending

Using shopping as a coping mechanism is another characteristic of the happiness money mind; however, this habit can lead to even more anxiety post-purchase. Browsing shelves and websites is ultimately a distraction from what’s stressing you out. “Try to figure out your triggers and find an alternative outlet to stress than retail therapy,” says Carbonaro.

Frugal Spending

Frugal shoppers fall into the fear money mind — you don’t want to spend a lot and always stick to strict budgets,” explains Carbonaro. “Get over your fear of spending by researching and planning your purchases carefully. Make sure your budgets are realistic for what you’re buying, and never go shopping without a list!”

Frenzied Spending

For the holiday season in particular, the commitment money mind can run rampant. You want others to have the best gifts possible, often at the expense of your budget and credit line. Organize your finances ahead of time, says Carbonara. When gifting, look for sales and shop around for deals to make sure you get the best value for every item on your list. Most importantly? Don’t guilt yourself into overspending on others.

Clueless Spending

As for those of us who buy into the whole “I’m just crap with money” mantra? Carbonaro asks, “How do you know? Where is your money going? What are your bad money behaviors?” Remember, you have complete control. “It’s just a matter of becoming more financially literate and really thinking about your financial choices and their consequences. Women love to spend money, but don’t necessarily want to grow it or maximize it or invest it. Anyone can learn this and put it into practice.”

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