Are You a Saver or a Spender? The Why.

I had an interesting conversation with Penny last week. It went something like this:

  • Penny: McKinley is a saver. I’m a spender.
  • Me: What makes McKinley a saver and you a spender?
  • Penny: McKinley just saves all of his money. I buy things. Like my waterproof camera. Well, I guess I’m more of a saver, then a spender.
  • Me: What’s the point of McKinley saving his money? What is he going to do with it?
  • Penny: I don’t know. He just keeps it.
  • Me: Dad and I are savers. But do you know why we save money?
  • Penny: So we can go on vacations and dad doesn’t have to work until he’s old.
  • Me: Right. Money isn’t worth anything if it doesn’t have a purpose.

I think this conversation is worth having with people of any age. Are you a saver or a spender? We think of spenders as self-proclaimed “Mall Rats” that just spend money as fast or faster as it comes in. We picture savers as the cheap, money-hoarding misers. But in reality, both of these financial profiles are unhealthy. It’s not good to participate in “retail therapy,” but it’s equally bad to hoard money for the sake of having money. It’s unhealthy. Being a “saver” in that context leads to selfishness, greed, and not enjoying life.

An important part of the discussion is always balance. Some things are worth sacrificing today for more money opportunities later. Some tradeoffs (for us, our two cars), are not worth it.

Become a Saver, then a Spender

I like Penny’s definition of what she is: “I’m a saver, then a spender.” That is the ideal middle ground. So how do you make sure you’re not skewing to either side of the scale? Allow me to suggest a few steps:

  • Step 1: Solidify Your Future Dream – “Oh great. There goes Maggie again telling us to stop dreaming about swimming in money! Will she ever stop?” No. No, I will not stop. If you do not have a solid vision of what your future will be with that money you are saving, that money is worthless to you. Swimming in index cards may not be as much fun, but that’s essentially the same thing. And that makes no sense! What do you WANT? Freedom? Freedom from what? What will your days look like each day? You want a house? You want a car? You want to get out of debt? Visualize it. Print off pictures. Make it real.
  • Step 2: Make Changes Toward That Dream Now – Sometimes our dreams are simple. We want more time together as a family. We want to enjoy a vacation every summer. There’s no reason to wait on those priorities. How can you change things now to get more time together? What budget-friendly vacation would fit all of your hopes and dreams for a family vacation?
  • Step 3: Identify How Much Money the Rest of the Dream Requires – Step 2 changed your life a little bit. But you’ll need more money to go full-throttle on your dream future. How much money do you need for that? Looking to pay off your debt? Calculate your total debt amount. Looking to buy a house? Figure out how much houses go for in your dream neighborhood. Looking to retire early? Calculate your expenses and start a chart.
  • Step 4: Ask the Question: “Does This Money Provide As Much Joy to Me NOW As it Would Later?” – Life is full of trade-offs. But if you spend your life being miserable, you’ll eventually hit your goal and be wealthy and miserable. Be conscious about your spending. Live in the present. Don’t waste money on things that don’t genuinely bring you lasting joy now. And don’t scrimp too much on things that do. Life is unpredictable and worth living now.

I’m striving, like Penny, to be a Saver, then a Spender which is perfectly aligned between saving and spending. In this prime location, money is a tool to help you move forward. When you move too far to either side of the spectrum, money becomes an obsession and loses its functionality. On one end (Saver), money becomes a hurdle. You assume that there will be some arbitrary number where you will finally feel comfortable spending more money. The fact is, if you don’t change your life now to find joy, that arbitrary number will fail to provide you that joy as well. If you move too far over to the other side (Spender), money loses its function. It comes in, it goes out and it does nothing for you. Don’t let that happen either.

Where do you fall in the Saver/Spender Continuum? Is it different for different things? How do you manage to stay in the middle?


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  1. This is so great, and true! I used to be strictly a spender. When I got my first job, I spent my paychecks within 48 hours of getting them, and those habits continued on until it was too late. Being a saver, then a spender has truly been what I’ve been working towards. I’ve gotten really good at the saving part but now I am afraid to spend. So it becomes hard to find a balance for me. I guess I’ll just have to follow these steps 🙂

    • MaggieBanks

      I find it’s a constant battle to stay in the middle. We are constantly over-compensating for being too spendy or too savey. 🙂

  2. I think it’s great you’re having those conversations so young. I would say it’s a tough balancing act between being a spender and a saver. But naturally I’m not a spender. I spend when I have to. I also spend on things that I know will be fun for me and make memories. Like travel and visiting friends and family.

  3. At only five years old, Goofball is developing a pretty good understanding of spending versus saving to spend. He talks to us about making choices when it comes to money. If we don’t spend money on something, he will explain how we’re saving it so we can go on our big roadtrip. I’m really hopeful that he will remember how we’re working hard now, to have more freedom later.

    • MaggieBanks

      Discussing trade-offs is a constant in our house! It’s a great starter discussion for all important finance discussions in the future!

  4. Tawcan

    This is a great reminder. You can’t be a saver all the time as you can’t take the money with you when you die. Saving for the future so you can spend is the right way to do.

  5. I’m a spender… Spend, spend, spend, and I didn’t realize that until I met Mrs. SSC who is more of a saver, then spender. Also, my family is a spend it before you have it mentality, so in that context I was a saver, and good with money, and that’s where I went wrong. Thinking I was good with money, and that having credit card debt for stupid stuff was worth it. Now, I’m in the save, then spend camp, and it’s nice, but it took a big mindset change and a lot of hard work to get to that point. I still slip up occasionally, but I don’t beat myself up about it, I just accept it, and try to do better next time. 🙂

  6. It’s nice that you have these discussions with your kids and that they get to reflect on the topic, this might come in handy one day!
    I would be tempted to say that I’m a saver, then a spender, but I realize that it really depends who’s judging.
    Compared to friends with similar incomes, I would definitely put myself in the ‘savers’ category. I regularly save over 50% of my income and I spend on what matters to me.
    However, compared to some family members, I would be in the ‘definitely super spender’ category considering how much money we spend on travel. That’s the one thing we regularly splurge on and don’t feel any guilt about because it makes us very happy. It’s like we work to travel ha!

    • MaggieBanks

      I’m right there with you. Work to travel is the way to go! I think the chart is different for everyone. And that’s what makes it tricky to figure out where you’re at on it because it’s all about feeling the right balance: Am I giving up too much today for tomorrow? Am I squandering too much today and stealing from tomorrow? It’s a constant pull back and forth.

  7. Trying very hard to be a saver now! 🙂 It’s awesome that you’re talking about money with your kiddos–they will appreciate this when they are older.

  8. J

    Great post (and points), Maggie! I agree with money having a purpose. Before I started having financial goals, I was a serial saver but I honestly didn’t know what I was saving for. The money was there but it had no job and my progress was slow because I wasn’t working towards a goal. I guess now I found a balance… I am a saver so I can spend later on. And I make sure whatever I save has a purpose, otherwise, I just spend the extra moneys. Haha, I kid. 😀

    • MaggieBanks

      It’s tough to save without a specific purpose. It doesn’t make you happy or motivated. A purpose helps you save more but have better life balance. 🙂

  9. My daughter just finished getting the first “big” toy that she had to save for, and I was pretty glad to see her find enough motivation to carry it through. Now that she’s got it, of course, she has a list of dozens of wants, and she’s a long way from being a “rainy day” saver, which is where I like to fall: I don’t need a specific reason to save, but willing to spend for a good purpose.

    • MaggieBanks

      that’s a great balance. And tough for kids. Now that my daughter earned her camera, she hasn’t done any extra chores to earn money for three months! 🙂

  10. Ha ha I’m still chuckling at the line ‘So we can go on vacations and dad doesn’t have to work until he’s old’ I bet he was proud of that line!
    I think I’m a natural saver, although I do like spending! But I think now I have a bigger picture reason linked to my goals, it is much easier to not spend.

    • MaggieBanks

      The bigger picture reason, as you say, is SO IMPORTANT. So much that I like to yell about it. 🙂

  11. Love this. Another super wise post! (And how fantastic that that wisdom often comes from your kids!) This is definitely where we are now — savers, then spenders. And your point about purpose — I’m writing a post about this for next week. Mapping out what our money’s for. I’m sure it will be more of that same wavelength stuff, as usual. 🙂

    • MaggieBanks

      I love these conversations with my kiddos. It shows me that they’re thinking about money and helps me teach them good financial principles on their time. And I’m excited for your money mapping!

  12. I am a saver, trying so hard to be a saver then a spender. I keep setting stretch saving goals and tell myself that after I reach that I can loosen up a bit. With that said, I’m not a miser, so maybe I’m closer to the middle than I think I am.

    All good food for thought!

    • MaggieBanks

      I really think it’s a constant battle back and forth. We swing back and forth and have to constantly evaluate where we are and how to get back to the middle.

  13. Thank you for this post! My sister and I are savers in different ways (but if I didn’t save, I would probably spend every penny). She just stuffs everything into her old savings account that has no interest whatsoever, while I invest and do all the other shenanigans. Something that really bothers me with her savings is that it doesn’t have any sort of purpose. She has this sense of scarcity, but no direction for her money.

    • MaggieBanks

      Money for the sake of money is never healthy, in my opinion. There won’t ever naturally come a day where something clicks and you’ll have a healthy relationship with that savings account. It’s a constant need to learn how to do that along the way.

  14. I’ve never been a natural saver. But like you said, money that is saved for a purpose is a huge key to shifting your lifestyle from a spender to a saver. Now, I am very much a saver. I spend money on almost nothing – even when I legitimately NEED something, that doesn’t necessarily mean that I will spend the money to buy it.

    The key in all this was purpose. Our purpose is financial independence and retiring from full-time work. It is a goal that saving money is helping us to achieve. But without that goal, I honestly can’t say whether or not I’d be all that much of a saver. 🙂

    • MaggieBanks

      It’s a total mindset shift once you have a real, solid plan for the future! Thanks for your thoughts, Steve.

  15. That’s remarkable that your imparting such wisdom on your children. As they say, more is caught than taught so you’re clearly doing something right! 🙂

    I’ve been a “spender” all my life. Truth be told, I still am in some respects…as you mentioned, it’s all about finding the right balance. To note, even with our spending, we are still on pace to exceed our financial goals for the year and have thus far been saving (saving + paying off debt) at a rate of about 60+% for the year.

    For the majority of my life, up until our son was born about 18 months ago, my thoughts and plans for the future didn’t extend beyond a few years. Once he was born and provided the “ah-ha” moment of realization, now I think in terms of 10, 20, and even 30+ years. Thinking in those terms, it completely revolutionizes how you go about things in all aspects of your life, financial and otherwise.

    It truly excites me to one day have these types of conversations with my own son as he grows. Learning from our “mistakes” and starting good habits from an early age, I envision him having the ability to reach his own version of FIRE at a remarkably young age…it sounds like your little one is on track, as well. Thanks for the excellent post!

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