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Just as you have a core personality type, you also have a core financial type. This type contributes to not only your current financial state but to many of the financial decisions you make in life.

After years of experience as a financial advisor, Jordan Goodman (editor of Money Magazine) began to notice that peoples’ behavior towards money seemed to fit into six definable personalities or Money Types which he calls: The Strivers; The Ostriches; The Debt Desperados; The High Rollers; The Coasters; and The Squirrels. Although you may notice that you relate to many of the different types, Mr. Goodman explains that there is one specific type which makes up your “normal” dominant state or financial personality.

I’ll cover these six different Money Types below. The descriptions are based off of Goodman’s book, Master Your Money Type intermixed with my own thoughts and interpretations.

The Strivers

As a Striver, you seem to have a sense of entitlement. Your primary motivation in financial matters is in seeking status. You buy things primarily to show others how well off you are. It’s the outward appearences that matter most, and because of your strong will, you’re capable of going to great lengths to achieve these desires (such as working hard at creating new revenue sources). Strivers often make excellent entrepreneurs.

Some of the common problems you face is a lack of cash flow. This doesn’t necessarily mean you’re broke, you just tend to live above your means which leads to debt as well as strife in your relationships.

Your biggest challenge as a Striver is learning how to use your strength of will to match your expenses with your income. Are you willing to forgoe some of your present-day wants for your future needs and peace of mind? If you are, then with your will and abilities, you’re well on your way to financial plenty.

The Ostriches

Financial Ostriches get their names because of the apparent ability to stick their heads in the sand and hope that by ignoring it, all their money woes will just take care of themselves. If you’re an Ostrich, money may intimidate, confuse, or even embarrass you. Many of you tend to be intellectuals who just don’t want to be bothered with all the boring details surrounding personal finance and investing.

It’s not that you are deep in debt or have any ‘huge’ financial issues. Actually, it’s one of your strengths that money doesn’t consume you. Your problems lie in the fact that you don’t budget, you don’t know how much you owe or spend, and you haven’t taken any real thought for the future. You’re the type who gets a late start on saving and investing, only realizing much later that you should’ve done this a while ago, and now have to play catch-up.

Your Challenge: Realize that it is YOU and only YOU that can determine your financial future. Get over the embarrassment of not thinking you know enough. Use those brains that earned you your doctorate and apply them into learning about personal finance.

The ability to use the internet to put your finances on autopilot, seems to have been tailor-made specifically for your type. Set up automatic savings and investing plans. Use automatic online bill payments. Buy some of the all-in-one mutual fund packages. Do something…anything. And make it automatic.

The Debt Desperadoes

My friend, who I spoke of in The Courage to Live Debt Free, is the quintessential Debt Desperado. You also may be this type, if you’re a spending addict who won’t admit you have a problem, or the recipient of the bad luck of circumstance, caused by medical issues or some other personal catastrophe. One of your tools of survival is to open new debts to pay off old debts coming due, thereby digging yourself even deeper. Not willing to admit it, you need some help…and quick.

You’ve fought hard to keep yourself afloat for this long. Use that ability to pull yourself out of the mire of debt, and this time stay out!

The first step is acceptance. You’ve gotten stuck in this mess, now marshall some confidence in your ability to get out. Stand up to your creditors and remember, you need to take care of you and yours first. This means that no matter how much they demand full payment, remember that you have the right to pay for your needs first (home, food, utilities etc). You can always work out a payment plan with them. Most of them are happy so long as you’re paying something. If you need advice, seek a certified debt-relief counselor.

The High Rollers

You are the gamblers of the world. Attracted to risk, you seek out the emotional rush of the long shot. A close cousin to the Strivers, you are part of the group that seeks out the bigger and better things that life has to offer and you’re willing to put everything on the line to make that happen.

One of your common problems is that you are driven by emotion. Although having a high tolerance for risk taking can be a positive thing, on the flip side you tend to underestimate the potential for bad results. As a gambler, you’re not just found in casinos, but investing in high-risk stocks, or laying it all on the line to build your business.

Your challenge is learning to be more selective in your risk taking. If you’re blindly risking most of the time, you’re bound to lose most of the time – it’s the nature of the beast.

What you need to do is, establish a safety net for your risks. If you fall, at least you have something to catch you. Set goals. Come up with entry and exit strategies. Leverage the knowledge of expert people. Most of all, check that the pool is full before you dive in. A little forthought will be most beneficial for you.

The Coasters

Many people in this group are, for the most part, financially stable and secure. It’s likely you have a good chunk of retirement savings, decent insurance converage, and meeting your monthly expenses is not something you worry about.

Your problem is complacency.

Your goal then is to use the sure footing you’ve created, as a launching pad to bigger and better things. Unlike the Strivers and High Rollers, you lack vision. Take a lesson from those types and realize that you can be so much more. You have all the tools, now you need to put them to work.

Take some time and figure out exactly what your financial situation is in this moment. Now project that into your retirement years. Will you be able to afford the lifestyle that you want? Look for ways of improving your investments with a greater range of risks. Seek other ways to take a more active part in your financial life instead of, as your type is famous for, coasting along.

The Squirrels

Storing away your money in various savings accounts for that possible rainy day is your M.O. You are the penny pinchers, the coupon cutters, and live by the motto, “a penny saved, is a penny earned.” You consider investing to be way too risky and you would rather have your money sit safely tucked away in some savings account or CD then on Wall Street.

What you need to realize is that money doesn’t age well. Inflation slowly eats away at your savings like salt on an ice-cube.

Because you are the most patient of all the personalities, you are a perfect match for long-term, low-
risk investments, but remember this: no risk, no return.

You can learn to mitigate risk by diversifying your holdings among different investment vehicles. Dividend-paying stocks, immediate annuities, and short-term bond funds are low-risk investments that can give you higher returns than most savings accounts.

If you’re having fun with those, take the leap and try out some moderately risky investments like index funds, rental property, even certain corporate bonds. The more you have to invest, the more you should be open to a wider range of risk.

Conclusion

Your Money Type is the set of attitudes, fears, behaviors, and values you have towards money. Understanding what type you are, allows you to leverage your personal strengths and avoid the problems caused by your weaknesses.

How you feel about money, ultimately affects what kind of financial decisions you make. When you can learn to face the issues that are the cause of your money troubles, you will move closer to emotional and financial well-being.

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