Are you a spender, a saver, or somewhere in between? Do you view your money with an “easy come, easy go” attitude or focus on saving all you can, “making hay while the sun shines”? Your overall financial philosophy doesn’t just affect your day-to-day spending decisions. It may also impact your long-term financial trajectory. Below, we discuss a few of the ways in which your attitudes toward money may shape your financial decisions.

Optimism vs. Pessimism

You may assume that having financial optimism can lead to freer spending decisions—after all, why worry about saving money for a rainy day when more is surely on its way into your accounts? However, the opposite is often the case. Those who are optimistic and grateful are committed to maintaining financial security, while those who have a financially pessimistic attitude may tend more toward over-spending. Those who view money as a dwindling resource may feel that saving is futile and that it’s better to have the items that money buys than the flexibility of the money itself.

Quality vs. Quantity

Another way in which your overall financial attitude shapes spending decisions comes down to matters of quality. Higher-quality items often tend to last longer, but they often tend to be more expensive. When deciding whether it’s wiser to buy a cheaper version than to shell out for the top-shelf item, some factors to consider are how often you may use the item, whether you may be able to easily replace it when the time comes, and the collateral costs of replacement (like the time it takes to go to the store or order and install a new item).

Prioritizing Your Goals

For most people, achieving both short-term and long-term financial goals requires some careful prioritizing. Your budget may allow you the freedom to purchase many of your wants, but it’s unlikely to fund all of them. This means you need to choose what’s most important to you and figuring out the spending plan that gets you there.

For example, if your home is your refuge and you hate the thought of a commute, it may make more sense to rent or purchase a higher-priced home in the heart of the city and take public transportation rather than spend the same amount on a car payment and a home in the suburbs. By knowing and committing to your goals, no matter what they may be, you work toward the financial future you’d like.

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