Money management goes beyond numbers and spreadsheets. Behind every financial decision lies a complex web of emotions, beliefs and behaviours that shape our relationship with money. These psychological factors often go unnoticed, but they can have a profound impact on our financial well-being.

It's no secret that people around the world have different attitudes towards money. From viewing it as the root of all evil to seeing it as the driving force behind the world's workings, our beliefs about money run deep. And it's these beliefs that guide our actions, sometimes without us even realizing it.

Take, for instance, the way we react to financial decisions. Some of us are guided by fear, avoiding risks at all costs. Others are more inclined to take bold risks in search of potential rewards. Our financial behaviour is a mirror of our underlying beliefs and values about money.

Enter the 8 Money Types

These archetypes serve as mentors, shedding light on our individual financial strengths and weaknesses. By understanding our own money psychology, we can make more informed choices that align with our goals. The following are the money types as developed by bestselling author and founder of the Money Coaching Institute, Deborah Price:

1.      The Innocent: Denies financial reality, relying on others' advice and remaining trusting like a child, requiring continued education for empowerment;

2. The Victim: Blames external factors for financial woes, often appearing powerless, seeking rescue, and holding historical grievances;
3. The Warrior: Takes control of finances, excels in decision-making and investing, but struggles to distinguish adversaries from growth opportunities;
4. The Martyr: Prioritises others' needs, rescues, but is often let down, oscillating between control and neediness, with potential to become a healer;
5. The Fool: Pursues financial shortcuts, takes chances, a mix of Innocent and Warrior, remaining optimistic and focused on the present;
6. The Creator/Artist: On a spiritual or artistic path, conflicted about money, struggles with materialism, needs to integrate both worlds for prosperity;
7. The Tyrant: Uses money for control, lacks fulfillment, seeks power, often appearing successful but suffering from chronic dissatisfaction; and
8. The Magician: Ideal money type, transforms reality, combines material and spiritual dynamics, manifests financial prosperity through self-awareness and empowerment.

Top of Form

As our financial awareness grows and our habits evolve, our approach to handling money transforms as well. This is where money types come into play. They provide guidance as we navigate our way towards financial success. But before we can harness their power, we must first assess our current relationship with money.

Understanding the psychology of finance extends far beyond budgeting and investing. It allows us to see beyond the surface and delve into the hidden drivers of our financial decisions. It reveals the connection between money and other aspects of life, such as career choices and relationships.

By exploring this field further, we gain valuable insight into our own behaviours and their influence on our financial choices. Armed with this knowledge, we can effectively manage our finances in alignment with our life goals. We can make conscious decisions that lead to long-term prosperity, rather than chasing short-term gains.

So, why embark on this journey of self-discovery? Because understanding the psychology of finance offers a holistic perspective on managing our money. It equips us with the tools to make wiser financial decisions and achieve greater success over time. By unlocking the secrets of our past experiences and embracing future opportunities, we can pave the way to financial freedom for ourselves and those around us.

Luca Caruana is a Certified Money Coach (CMC®) and founder of the Money Coaching Hub