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What kind of budgeter are you?

Being able to budget is one of life's most important skills. Budgeting properly can open the doors to all sorts of opportunities: from saving for your dream vacation or home, to ensuring that you and your family are prepared in case of a financial emergency. Not everyone can, or wants to, budget the same way. Factors such as age, income, and lifestyle can all influence our approach to budgeting, which is why it's crucial to find a budgeting style that suits you, your specific needs, and is something you will keep up with.

For some people, it’s all about living in the moment, while others prefer the delayed gratification of a future reward. Certain budgeters set money aside for specific rainy-day scenarios, while some seek to strike a balance between living well and saving. Many are just starting their budgeting journey and should utilize educational resources and tools frequently to help them along the way.

Discover what kind of budgeter you are by taking this First Merchants quiz!

3 mins

Spending and savings habits in detail

As First Merchants has previously revealed, half of all U.S. adults overspend monthly, emphasizing the importance of developing budgeting skills.

One very apparent thing is that differences are heavily prevalent along generational lines. For example, 43% of Gen Z overspend weekly compared to 19% of Gen X, and just 5% of Baby Boomers. There are several potential reasons for this disparity. Older generations are typically further along in their careers, meaning they earn higher salaries. In other words, it's harder to overspend if you're earning over $70k a year as opposed to $30k. Baby Boomers and Gen X also have more financial experience than Millennials and Gen Z and this can manifest in their approach to budgeting.

On a similar note, just under a quarter of Millennials don’t feel confident when it comes to budgeting and managing their cash flow, demonstrating the importance of financial education. Negative emotions are frequently associated with budgeting for some generations, with 1 in 4 millennials saying they feel stressed, anxious and guilty when managing their finances.

Overall, fewer than a third of adults feel very confident when it comes to budgeting. Part of this lack of confidence can be attributed to not knowing where to begin, particularly if you have never budgeted before. Utilizing budget calculators and expert budgeting advice is an excellent way to get started and build your budgeting confidence.

To discover more about budgeting habits across generations, read First Merchants primary research.