Spender or Saver?

Crown Money, where we show you how to pay your home loan off in up to half the time of a normal bank loan. Welcome to today's episode. I'm Jessie Edge and I'm joined by Scott Parry.

Hey, how are we?

Good, buddy. Now, in our work, there's always two sides to money management and debt reduction. The two sides are structure and then psychology. And it's super fascinating how much of an impact the psychological side has to people's accomplishments or successes in debt reduction.

It's your money blueprint and no one's conscious of it, no one's spoken about it, no one's taught you about it. It just forms. In your formative years as a child, watching what your parents do, how did they spend? What was their language around money? You know, if you had a parent who was saying, oh, money doesn't on trees, blah, blah, blah, blah, you're like, holy shit, this is real scarcity mentality. And save for the rainy day, you don't know what's going to happen. But then on the other side of the fence, if you had a parent who was like, yeah, easy come, easy.

Go, yeah, no savings, no nothing, let's just have a fun time.

Credit card, you only live once.

Woohoo. Yeah, absolutely. It has a massive influence and it will do. It'll go one of two ways. It'll either you will form in their image or you will go completely opposite and you'll go, nope, I don't want to be like that. And you will actually bounce back the other way, which is really quite interesting as well.

Or you'll grow up in a family that was broken because your mum was a saver and your dad was a spender. Yeah.

And this is a great topic. So spenders versus savers. And I think if you were to ask somebody most people actually do know, they've just never wanted to admit it or never been confronted with the question before. And it's very, you know, it's pretty straightforward. Are you a spender or are you a saver? What are you, Scott?

I'm definitely a spender. I think that I love to buy experiences. I savings all well and good, but just doesn't excite me.

You hate saving.

Spending excites me. So, I mean, I know my own weaknesses and so that's why I designed this structure to save me from myself.

I think as well, with you, spending in your mind is also investing. You love investing. You just, you don't want to have money in a bank account, whereas, you know, I, you know, I do Think that I'm a spender, but I spend very little. Whereas I have to have money in a savings account. I find it really stressful if I don't. And it's those sort of financial goals. And I never have credit cards, personal loans, anything like that. It's really important to me that I only have my owner occupied debt and my investment debts and then I have my savings. So I'm definitely a saver.

And it's not no wrong or right. It's not like you're a bad person if you're a spender or a bad person if you're a saver.

I would definitely rather go to a party with a spender.

For sure. Everyone would. Yeah, he's more fun. So it all really comes down to, okay, what formulated that in your money blueprint? Was it that one of your parents died early and so your mindset is, man, I didn't know how long I'm going to be on this earth. I'm just going to spend, spend, spend, because I might not get to retirement versus on the other side of the. You could have a parent who was just destitute and now they're on a pension in retirement and they're actually living off $230 per existing.

Let's be honest.

So everything's formed for a reason. It's not like you're born a spender or a saver. You actually learn to be one of these. And so where it comes from is I think our parents, what we see, how they operating money and then we then take that into our life. And the craziest part is your kids are watching what you're doing.

Yes, because we're not really taught about money in school. Definitely not the psychology of money. We're just taught about the basics and things like that. Very little, to be perfectly frank. And so you're never taught about what are my spending habits and why, why am I thinking this way? And so it does get picked up through behavioral recognition, watching other people do things and you starting to pick that up. So something to be very conscious of if you're a parent, every single financial decision or money behavior that have you are going to be inadvertently passing that on to your kids.

One of the craziest things which I've just started doing relatively recently is asking people what they would rather, what would make them happier. Would you feel happier if you had your savings account growing or would you feel happier if you had your home loan reducing?

Yeah, great question. I love this one.

And this is what I found is the savers would rather see their home loan reducing, but the spenders would rather see their savings increasing. And I, I thought, why is that? Because it's quite a common theme and I really feel that you always want. We don't have. And spenders have never got savings growing and savers have never got their home loan going down because they've always got the savings growing.

But I think it's also the way that we are motivated. So as people, you're motivated in one of two ways. You're moving away from pain or you're moving towards gain. And so spenders, they want that pleasure, that gain of purchasing and enjoying, whereas the savers are moving away from that pain of not having money. They want to have that little savings. So I feel like that's a little bit translated in that what we were just talking about as well is that moving away from paying what, your debt to go down, moving towards pleasure. You want your savings going up. So, yeah, interesting.

One, another thing to take into account. If you are married or dating a saver and you're a spender, or vice versa, what do you do? How do you get around this? Because the chances are 50% of marriages are breaking up and I think 70% of the ones that are breaking up are because of money. Because of money. And so this, and I bet you.

Anything if we looked at that stats, it would be because one was a spender, one was a saver.

Yeah, very likely. Very likely. So let's say you are a spender and you're dating a saver, or vice versa, you're a saver, dating a spender. What do you do? How do you deal with this? I think the very first thing you need to do is just acknowledge, I'm a spender, you're a saver, have the conversation, let's talk about what do you value about money? Why is money important to you? I'll tell you what, money is important to me. Then we can compare notes and then we actually have to join. What are the, I think, what's the word?

Similarities.

Similarities of what you want and what I want. What do we both value? And let's really make those a core goal and then build out our own benefits. So I am a spender. Just give me 200 bucks a week to spend however I want, where I want, guilt free.

And I think, you know, in a relationship you do want to make the other person happy. Like you want to go out of your way or you're breaking up.

Like, what do you want?

But you need, you need very clear, like boundaries. You need to understand why each other is doing it. And like you said, if you're a spender, give, give them. If you've got a spender in your relationship and you're a saver, give them a spending amount. It's really simple.

And guilt free is the most important. Don't give me a spending amount. And it's, oh, you went and spent 90 bucks on whatever it may be. I'm like, oh, feeling like, yeah, you feel guilty for your so bad you can't have any guilt attached that spending because it kills a spender's vibe.

Yeah.

And on the flip side, if you are a spender and you're with a saver, you've got to give them how much per week do you want it to save? To make you feel comfortable and secure.

Yeah, yeah. Like set a goal as a family. We want to save 20 grand a year or whatever it may be. We need to do X amount a week. Okay, let's do that. We can do that. Let's budget for it. We can have both. Both of you can be happy. What happens is when we don't talk about it and there's this underlying tension and the spender is sitting there going, oh, my God, I can't believe I married such a tight ass.

She's such a scrooge.

The savers, like, oh, my God, this is reckless. Ruining our beauty. Reckless.

Just out of control is so loose. This comes back down to finding out what you both value. Making sure you meet the other person's needs.

Yes.

Because your needs are being met. And don't try and change that person. Trying to change a saver into a spender or trying to save change of spender into a saver. You've got to rewire their money blueprint. Do you know how difficult that is? That's not just a conversation on the.

Oh, look, buddy, I really need you to rein in your spending.

Heard it all before. And that's when you can remember, why did my parents fight money for me? My parents thought about money a lot. I mean, we went to the private schools. They were really tight. We grew up in a very, I'd say average family. My mom's a teacher, dad drove taxis. Nothing crazy, but I can always feel that energy around money was stressful and they never really spoke about, okay, let's talk about what's important to you about money. Let's compare notes. I'm going to make sure your needs are met. You meet my needs, and then we can live happily ever After. And I probably would have grown up in a family that stayed together if they had that conversation. So all I want from this is to have one family that actually doesn't get divorced because of hearing this. Holy shit. She's a spender or a saver. I'm a spender or a saver. Let's talk about that. Where it gets real funky is when two spenders start dating.

Dangerous.

That's like credit card debt. You just spent 500 over there. I'm going to spend thousand over there.

Yeah. It becomes a bit of a competition. Yeah, absolutely.

And you just bury each other just trying to get one up.

And that's when you need outside help, like you really do. You need somebody that can introduce the self discipline and structure. Structure.

And make sure that you save yourself from yourself. Like if you have two spenders, then you both really have got to make sure that's outsourcing, that money management, outsourcing the actual structure. So you guys have got your set amount once again. There's your 200 per week. Blow it however you want. I'll take my turn away. I blow it however I want. But we've got to limit our spending or splurging because once all of a sudden you do a big lump sum and a impulse buyer, then I'm like, you just bought this flat screen TV for five grand and I'm.

Or you just bought a new car. I'm going to go buy a new car. And then you're, you know, 60 grand down in debt because of two really quick and bad decisions.

Nice one. Yeah, of course. Why don't you get the new car? I'm working hard.

I would definitely do that if my.

Husband got a new car. Like, yo, where's mine? Yes.

But I think as well, like, even if you do have a relationship where it's one spender, one saver, it is again, great to have some external help because the saver, you know, you'll have those conversations, you'll set up the structure, you'll set up, you know, that weekly spending amount for them that they can blow and guilt free. But there's still going to come times where they have to be confronted by the fact that, you know, one's a spender, one's a saver, and it's a difficult, you know, there might be a difficult conversation that needs to be had. Oh, look, I really do need a brand new car. Or I really do need this. It's like, no, you don't. You want it. And that is where having somebody externally that can jump in so the blame isn't shifted onto the saver.

I've got a great story. So I remember this so clearly. I went through basically someone who was referred to me by another client, sat down with them at their kitchen table and that sort of in their mid-30s. And so I could feel the energy was really cold, it was icy. I was, oh, these guys aren't doing so well. And so we sat down, went through what their financial position was. I had credit cards, car loans, personal loans, home loan, huge amount, like five or six different debts. And so she was obviously quite stressed about this, not feeling safe and secure, which for all women with kids like those, want to nest and to feel safe and secure. I don't think he was sort of had any answers to how to fix it. And so sitting down, going through it all and just mapping all that, say, okay, this is what we need to be doing. This is the structure, this is how we're going to run it. This is the financial strategy to pull you out of this. And we took their loan repayments for all their debt from I think it was 3200 down to like 2100. So we saved them like over a thousand $250 per week in repayments. And then the wife said to the husband, how long have you known about Scott? How long have you been. And then the husband, I saw his face just dropped and he's like, oh, my friend Mark told me about him five years ago, man. The wife picks up the glass. I'm like, whoa, whoa, don't throw the glass at him. Just wait until I leave. I just got to get out of here before we've got a full blown domestic. So tidied everything up for them. Two weeks later, get a phone call from the husband. I'm like, hey, how are you, mate? He's like, yeah, good, good. Mate, I just want to have a quick chat with you. I don't know what you've done to my wife. I said, oh man, I haven't touched her, I promise. No. He goes, I don't know what you've done to my wife, but ever since you left, we're having sex again. What? What do you mean? He goes, I don't know, mate. Ever since you left, we're having sex again. And I thought, wow, how crazy that you take the financial stress off their shoulders, out of the relationship, they can go back to being husband and. And then all of a sudden that umpire, I'm the bad guy. Yeah, she's no longer the bad person. Saying you can't be spending this. You can't be doing that. And all of a sudden, he's not having to sort of have a go at her. And you take that energy out, they can just go back to being a family.

Yeah. That's amazing. That's a great story.

You get the financial structure right, you're gonna have more sex.

I know the long bow, but I love it.

Stretching, pushing the friendship. Pushing the friendship.

I think, you know, what it comes down to is having the conversation, figuring out what each person needs and why. Like, we all have a reason why. And just making sure you've got the structure in place to allow both people's needs to be satisfied. Like, it really. It's essential because money, like you said, equals security, which is one of our very basic human needs. Yeah.

No one, no one has ever gone bankrupt. Owning your own home. Debt kills. And the faster you're out of debt, the happy you're going to be. The better the lifestyle. The more holidays, more experiences, more time with your family, the better everything is. And so that's why we're so keen to get people out of debt. Every 23 days, we have a client of ours pay off their house using our strategy and program. And as a result of that, I hear their voice. I hear how excited they are, what their future looks like, how much more traveling they're going to be doing, how much sooner they're going to stop working.

And also, if you've paid off your mortgage, one's a spender, one's a saver, you have got your entire incomes to spend and save. Absolutely. It's just like, yeah, okay, we'll just split it down the middle. 50% of my income is going to be savings. 50% is going to be blown on whatever the hell I want because I can. Like. It's the ultimate outcome for both spenders and savers.

When I make that phone call every 23 days to that client who's paid off their house, I ask them one simple question. Do you know what you can do now? You don't have a mortgage repayment. Any effing thing you want. Love it.

Well, on that note, I think we'll finish for today. Thank you so much, Scott.

No, thank you, Jess. Pleasure.