The Personal Finance Spectrum

The Personal Finance Spectrum

Just as our background, hobbies, and beliefs are varied, so do Americans’ money habits. Some people refer to themselves as savers, who hoard every penny and put it to use for something more long-term, while others like to spend it as quickly as possible, leaving very little thought to the future.

However, most people are not one or the other, but fall somewhere on a personal finance spectrum, with one side representing extreme savers, and the other side consisting of people that are extreme spenders, with a few other categories sprinkled in the middle.


People that are completely on the red side of the spectrum operate paycheck to paycheck, with anywhere from 0-2% of their finances going to savings. They consider very little to be actually investments, usually buying the most expensive homes and cars they can afford and trading them out as quickly as possible. They also pay down debt very slowly, usually only making minimum payments, if that.


Despite not being completely day-to-day as the people in the red group, the orange section are still considered more of a spender than a saver. They make some debt payments to accelerate that process, but they also like to spend the majority of their income on everyday pleasures. About 15% of Americans fall into this group in some way, and even though they’re more forward-thinking than the red group, they still are not quite where they want to be.


Located squarely in the middle between spenders and savers, the yellow group has read more than a few books on personal finance and wants to retire early while still maintaining a semblance of day-to-day luxuries. They don’t tend to eat out very much, except for social events or special occasions, make their coffee at home, and drive used cars when they could afford something new. The yellow group values financial freedom and early retirement, which makes this stage not so much a permanent destination as much a stopping point on their financial journey.


This group has barely a spending bone in their body. They value reliable, used cars, and drive them into the ground, at which point they buy another used, reliable car. They maintain their own home, choose entertainment that is relatively cheap or free, and save roughly 15-25% of their paycheck every time. They’ll splurge on the things that they use regularly, but most of their purchases are very practical and calculated, especially in response to the red group mentioned earlier. Normally, these are people that want to retire fairly young or have decided later in life to make financial responsibility a priority.


For people who take pleasure in budgeting and cutting costs whenever possible, the blue group is for you. While they insist on socking away nearly half their paycheck into savings, they’re still not as extreme as some people who choose to save nearly everything. Their lifestyle is not dependent on financial situations, because they’ve been able to save so much money in the meantime. As a result, early retirement is not just a dream to these people, it’s a very near reality.


Edward Schinik has been with the Investment Manager since 2009 and has been with one Affiliated Investment Manager since 2005.

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