Which Type of Money Manager Are You?

There are many different types of money managers. Which type are you?

Whether we like it or not -- and no matter how much (or little) we have in our checking accounts -- every one of us is a money manager. And most of us fall into certain categories of behavior that have become entrenched over the years.

We've waded through what financial psychologists have to say and come up with five categories of money managers. Which one are you?

1. Scarlett O'Hara, the avoider

As I sit here researching money management types, I can't help but think of Scarlett and her habit of dealing with issues "tomorrow." She was the ultimate avoider. If you don't keep track of where your money goes, will do anything to get out of planning a budget, and often spend more than you earn, you may be an avoider.

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Steps to control your inner Scarlett:

You are not alone -- many Americans struggle to keep on budget. In fact, even some of the people who bring in the big bucks still live paycheck to paycheck. If you would rather have your teeth pulled than organize your finances, it's time to stop putting it off. 

• Break free from the mental blocks that are stopping you from creating a simple budget. Don't overthink it -- sit down today and map out your income and expenses and look for fun ways to live within your means.
• Plan a time each week to review your budget and make sure everything is paid.
• Check your credit report, dispute any errors, and make sure your bills are paid on time. Building your credit score is the best way to lower the interest rates you pay on any debt, which will put more money in your pocket.
  
  

2. Gordon Gekko, the big spender

Gordon Gekko is the epitome of '80s culture. He's the character who made a rallying cry out of the phrase, "Greed, for lack of a better word, is good." You surely know someone who's always flashing their cash around, or an old friend who's dripping in jewelry. Let's call them the big spenders.

Maybe you find yourself caring a little too much about what people think of your car and house. Or, if status means the world to you and you can't imagine being caught in public without designer clothes or premium kicks, you may be a big spender. 

The truth is that most big spenders rely heavily on debt to make themselves look good -- and looking good is what it's all about. They're the most likely to dive into an investment that sounds too good to be true (mostly because it is too good to be true) and fall for get-rich-quick schemes.

Steps to control your inner Gordon:

• Look at ways to get your spending under control. Make a detailed budget and track your spending so that you can see when you're splashing out on things you can't afford. 
• Make an appointment with a financial counselor who will provide a picture of what life would be like if you allowed your money to work for you. 
• Consider speaking to a financial therapist who could help you get to the root of why you toss money around like confetti and so develop a healthier relationship with your finances.
  
  

3. Real Housewives of Anywhere, the shoppers

The "Real Housewives" franchise could also be dubbed extreme shoppers. Shoppers consider shopping a hobby, a form of relaxation, and a necessary step toward social status.

Obsessive shopping can become an addiction for anyone, male or female. It's a thrill that numbs the real world -- until the debt comes due. If you shop for things you don't need or find yourself shopping in order to lift your spirits, you may have a problem. If your shopping habits mean you rarely have money left at the end of the month and can't save and invest for the future, then you definitely have a problem. 

Steps to control your inner Real Housewife:

• Make new friends. Seriously. If you are surrounded by people who care more about designer labels than your well-being, it's time to branch out. Does anyone really want to live in a world where their friends would think less of them if they didn't have plastic surgery or spend hours a week scouring high-end stores for clothes and jewelry?
• Volunteer your time. Being around those in need puts life into perspective with the efficiency of a Swiss Army knife. Volunteering also lowers your blood pressure, makes you happier, and ultimately may lead to a longer life.
• Visit a financial therapist who will help you work through your relationship with money, specifically, why spending makes you feel good.
  
  

4. The Edies, financial hoarders

If you haven't seen the documentary Grey Gardens, you are missing out. It tells the story of a mother and daughter, Big Edie and Little Edie -- two brilliantly funny, wonderful, quirky women who are both called Edith Beale. They also happen to be hoarders, unable to part with well, much of anything. Financial hoarding can also be a burden, a detriment to planning for your future. 

If your household budget is as strict as a parochial school teacher in the 1950s, you avoid all luxuries, and you are cautious about how every penny is spent, you may be a financial hoarder.

In terms of financial management styles, hoarding doesn't sound so bad, does it? After all, you're not frivolously throwing your money around. Here's where you may get in trouble, though: Carefully guarding every penny make you so afraid of losing money that you hide it away in totally safe, low-interest accounts instead of higher-interest investments. 

Steps to control your inner Edies:

• Take time to learn everything you can about investment strategies. The more you learn, the more comfortable you'll feel about taking the plunge. And frankly, once you experience the power of compound interest, there's no turning back. 
• Learn in whatever way works best for you. Read articles and books, watch videos, and/or take investment classes. Learning to invest is a lot like learning to ice skate. You start off holding on to the rails, but stick with it and after a while, you'll be gliding across the ice.
   

5. Warren Buffett

Warren Buffett is the ultimate investor. He's smart with his money, conscious of how his behavior impacts other people, lives within his means, and makes careful and balanced decisions. He diversifies his investments and makes sure his money will work for him far into the future. Furthermore, he uses his riches to help those in need -- making him a great investor and pretty great human being.

If you're an investor -- a Warren Buffett -- we can only say, good for you. Oh, and keep it up!