What’s YOUR ‘money type’? Scientists say there are 3 financial styles

What’s YOUR ‘money type’? Scientists say there are 3 financial styles,

It may seem unfair that your friends go on regular holidays while you struggle to pay your bills – but your ‘money behaviour type’ could be to blame.

Experts have identified three distinct financial styles, based on how people spend and save money.

The first is ‘Financial Explorer’ – those who are highly engaged with their finances. This group is good at budgeting, saving and investing.

‘Habitual Savers’, meanwhile, are cautious and conscientious, prioritising traditional saving and avoiding debt.

The third group, ‘The Disengaged’, encompasses those who do little financial planning, minor budgeting and have hardly any savings.

The team said the behavioural profiles aren’t a ranking system, as each have pros and cons.

Instead, they can be a useful tool to improve financial habits and boost economic security.

‘There’s no perfect money type here,’ co–author Dr Steffen Westermann, a financial planning lecturer at Griffith University, said. ‘Each group does some things well and others less so.’

This spider diagram shows the different financial habits used by Financial Explorers, Habitual Savers and The Disengaged

For the study, published in the Pacific–Basin Finance Journal, the researchers recruited 519 people aged between 18 and 35.

Participants were asked to rate the frequency with which they engaged in certain financial habits.

These included saving for emergencies, shopping for the best deal, budgeting, using apps to invest, using buy–now–pay–later services, and using a credit card.

The researchers were then able to group the participants into three different clusters – showing that not all young people have the same attitude and approach to money.

1. Financial Explorers

This group frequently engage in all financial activities including budgeting, saving and investing.

Financial Explorers are more likely to discuss financial matters with their partner and extended family and friends compared to the other groups.

This cluster had the highest proportion of male participants – but also were more likely to be overconfident about their financial skills.

Young people are becoming more savvy with their money, sharing tips online about how to save thousands of pounds

2. Habitual Savers

This cluster appears to rely on themselves rather than seeking advice from others, the researchers said.

They tend to be more conscientious and are likely to have higher spending control compared to the other groups – finding it easier to save their leftover pay rather than spend it.

‘In summary, it appears that Habitual Savers are a group of young adults with personalities and perceptions that may enable them to sacrifice current impulses to maximise future utility,’ the team wrote.

While Habitual Savers generally feel in control of their spending, they might also miss opportunities to build long–term wealth.

3. The Disengaged

This group are the least likely to engage in financial activities – except for ‘buy–now–pay–later’ schemes.

‘These financially disengaged young adults do not appear to have developed any clear financial habits,’ the researchers wrote.

‘At most, they sometimes shop for the best deal, occasionally monitor their finances, and use buy–now–pay–later services.’

Those who fall into ‘The Disengaged’ category are also more likely to experience financial stress.

Lead author Dr Jennifer Harrison, from Southern Cross University, said the findings have important implications for financial education, policy and support services.

‘One–size–fits–all financial literacy programs are unlikely to be effective,’ she said.

‘Young [people] are not a homogeneous group when it comes to money. They bring different habits, confidence levels, and social influences into their financial lives.’

Instead of treating all young people the same, the research suggests more tailored approaches could better support different groups.

For example, helping Financial Explorers better assess risk and navigate information sources and supporting Habitual Savers to build long–term wealth through appropriate investing.

Meanwhile providing The Disengaged with simple, low–effort tools and support could reduce financial stress and build basic habits.