Home Stories The Psychology Behind Spending and Saving: Why Everyone is Different

The Psychology Behind Spending and Saving: Why Everyone is Different


If you think about the behaviors of the people you know when it comes to money, it’s likely that everyone will be different. Some will be more frugal than others, while some will take a more frivolous approach to how much they like to spend.

Ultimately, there’s no hard and fast rule on how much we should spend or save, which begs the question “what is it that makes everybody different and determines the way we behave?” Here we take a closer look at the psychology behind this and consider the factors and circumstances that can influence our attitudes.

A Representation of Our Emotional Behaviours

In this interview, psychologist Dr Peter Collett discusses this issue and makes the point that our ‘financial and emotional behaviors are linked’ and that ‘historical and cultural factors’ can have an effect too.

An example of this could be where an individual prefers to save rather than spend because they grew up in an environment which fostered this. For instance, if this individual’s parents didn’t have a great deal of disposable income they may have needed to save and the exposure to this behavior could have instilled a more frugal approach to money management.

Dr Collett also discusses how a wider cultural attitude of a nation can also have a bearing on the way people act with their finances. An example he gives is how ‘putting money away for a rainy day’ is not a belief generally ‘shared by citizens of the UK…The United States and Greece’ and as such, the emphasis is more about securing credit and ‘immediate consumption’.

Learned Helplessness

There are other beliefs that those who claim they are unable to save, or who say they simply ‘can’t’ save money, suffer from: something known as ‘learned helplessness’.

This is where a person essentially falls victim to their own lack of self-belief and if they haven’t had someone supporting or helping them be more financially responsible, they simply believe they are incapable.

Support and Advice

Fortunately, we are in a position where this kind of attitude doesn’t have to be the case and moreover, people can find the support and guidance they need to learn. In addition, there is now more choice when it comes to financial products, savings accounts and methods of securing additional capital.

Final Thoughts

To return to a key point from the start, everyone has different behaviors when it comes to their money often as a result of their upbringing, but this shouldn’t mean they don’t have the ability to change. So, if you fear you might be falling into a savings or spending extreme, then seek additional support from experts, friends, and family.