Self-image is half the battle for spenders who want to save

Are you a saver or a spender? According to new research, one in five (20 per cent) of us think of ourselves as a spender, while two in five (39 per cent) favour saving over splashing out – leaving the other 41 per cent somewhere in the middle.

Changing habits of thought can be a lightbulb moment for finances. Picture: PA

Hargreaves Lansdown’s survey of more than 2,000 people found that just 29 per cent of spenders say they feel confident they’ll be able to afford to retire, compared with 39 per cent of savers.

Savers, of course, tend to have more in the bank too, with just one in 20 savers saying they have less than £500 in their account, compared with one in five spenders. Only a fifth of spenders feel confident about meeting their savings goals, compared with two-fifths of savers. They also risk running out of money if circumstances change – 40 per cent admit their savings would last less than a month.

“Big spenders might be having all the fun, fun, fun right now, but there’s a risk they’ll come to regret it,” says Sarah Coles, a personal finance analyst at Hargreaves Lansdown. “We can all be tempted to spend too much every now and again; there’s a multi-billion-pound advertising industry designed to persuade us to do exactly that.”

So can you change your ways? Coles says yes. Here are the five steps Hargreaves Lansdown says spenders can take to break the cycle.

Let go of the idea that it’s OK to be a spender

Identify your spending weak spots and use techniques to keep them under control. If you enjoy the thrill of buying on impulse, try giving yourself a 48-hour “cooling-off” period to see if you still want an item. Also consider trying to avoid temptation by shunning specific shops and online retail sites, or trying not to buy anything in the week after payday – to make your income stretch for longer.

Start regular monthly savings

Set up an automatic payment to put a monthly sum into a savings account, and also boost your monthly pension savings – before the cash has a chance to hit your bank account and be spent.

Engage with where your money is going

Don’t just dump your emergency savings into an account with the same bank as your current account, look for a competitive rate on an easy access account. If you know you won’t have time for regular searching and switching, consider an online savings marketplace, which lets you compare and switch between banks in a handful of clicks.

Set specific goals

Prioritise short-term spending you know is coming up – like holidays or Christmas – alongside building up a cash safety net of three to six months’ worth of salary for emergencies, and boosting your pension. If you can only dip in for specific items, it’ll stop you spending as fast as you save.

Finally, enjoy the thrill of being a saver

Spending brings small bursts of short-lived pleasure, so don’t just try to remove this from your life or you’ll end up fixating on it. Make sure at least one of your savings goals is something that brings you real joy – like a debt-free Christmas, or a holiday.

Take the time to check your savings regularly, feel good about what you’re achieving, and bask in the pleasure of getting closer to your goals.