7 Different Kinds of “Money Types” – Which One Are You?

What is a Money Type? We all have ways of relating to money. Many of us love to spend, some like to hoard while others would prefer never to think about money and pretend it comes from the tooth fairy or grows in a very special tree in the back yard.

Your behavior with money has a long history.  

Most children are introduced to money when they are 4 or 5. Kids go to the store with mom or dad and these days may help mom swipe her credit card to pay for groceries. Children hear their parents talk about money, they learn basic math from counting and sorting coins, they get money to buy a toy or an ice cream cone.

Some kids get allowances for doing chores around the house as they get to be 7 and 8 and may be encouraged to ask neighbors for work mowing a lawn or doing other odd jobs. All the while they are forming attitudes about money and developing emotional reactions to both having it and not having it.

For example, one client tells the story that when he was 10 he mowed a neighbor’s lawn and the guy gave him $20 for the job. Now a very successful entrepreneur, he remembers as if it were yesterday that when the neighbor put that $20 bill in his hand a light bulb went off: Work hard, get money. That image stayed with him and motivated him through high school, college and beyond.

The atmosphere of either abundance or scarcity characterizes the emotional climate around money in most households.

If parents are comfortable with the money they have, share similar or complementary money beliefs, have a healthy regard for its uses and live within their means they most likely will create an atmosphere of abundance and ease their kids will absorb. On the other hand, if the parents have financial dis-ease, live out conflicting values, and don’t live within their means, these unhealthy attitudes will be absorbed by the children and the children will experience a sense of scarcity, conflict and even anxiety.

Peers, especially as children become pre-teen and teenaged, also influence a child’s money behavior. Comparisons with “who has what” begin as children and become more pronounced during the teen years. Some teens have jobs and have money to spend, others have an allowance or parents who put few limits on spending. By this age many teens have developed their own relationship to money and lean toward either spending or saving. By the end of high school there is a further crystallization of behavior and “money types” emerge.

There are seven descriptive money types that were developed by a pioneer financial therapist in the 1980s, Olivia Mellan. They are categories that capture the essence of a person’s behavior with money. Some people have qualities that are found in several types but everyone usually has a predominant type that endures and is active particularly in stressful times.

The Spender

Let’s start with The Spender. A Spender is someone who loves the experience of shopping and acquiring new and shiny things.

The immediate gratification, the affirmation they feel from sales clerks, and the excitement of getting something they value all combine to make shopping a “must do” activity. The only problem comes at the end of the month when they get the credit card bill and find they have gone overboard.

The Hoarder

At the opposite end of the spectrum is The Hoarder. Hoarders are afraid to “let go” of their money, want to keep it under their mattress and live in fear of becoming penniless. The only thing that makes them feel safe is to save and not spend.

Hoarders can be their own worst enemy. In their desperate need to feel safe they can be so tight fisted that they can’t enjoy what they have and fall behind with investing because they are scared to invest in anything but guaranteed CDs.

The High Roller

Then there is the High Roller. High Rollers love the excitement of a high risk deal and the possibility of a “big win.” Burdened with the Gambler’s Fallacy they don’t keep track of their losses and exaggerate their wins.

They love the fanfare and accolades that are due them when they do succeed and are not shy about sharing the good ne

The Money Monk

Opposite the High Roller is the Money Monk. Money Monks have the attitude that money is “dirty lucre.” They know they need it but want to stay as far away as possible from dealing directly with it, as if they will be morally tainted if they appreciate it or enjoy it.

They are happy when someone takes care of their finances and just gives them occasional updates.

The Amasser

Next is The Amasser. Financial advisors love Amassers because their main motivation with money is to have it grow.

Rather than enjoy immediate spending they would rather delay gratification and watch their portfolios grow over time, put their money into businesses and watch them grow or into their children’s education and watch them put it to good use.

The Avoider

Finally there is The Avoider. Avoiders are made so anxious at the thought of money they will do anything to avoid thinking about it: avoid looking at their bank statements, avoid conversations about it or dreaming about it.

Of course the longer they avoid the worse their situation can become. Denial of money’s importance and existence can become so extreme that taking some kind of action is preferable to further avoidance.

Clearly, some types are better to be than others. The truth is that there are advantages and disadvantages to each type and elements to envy and elements to disdain in each type.

The Money Master

The one final both type AND goal is The Money Master. Money Masters are balanced, can enjoy the money they have and don’t despair over the money they don’t have. They save for the future and spend in the present.

When they retire they have plenty to live to a ripe old age because they have strategized and planned well and trusted trustworthy advisors to help them with financial decisions. Money Masters convey a strong sense of pride in what they have accomplished for themselves AND they are usually in their 60s and beyond.

So be encouraged that as you identify and become aware of your money type you can “borrow” other behaviors that seem effective and productive from other types and send yourself on the adventure of becoming a Money Master!