With over one million Americans in personal bankruptcy, and nearly two million people losing their homes to foreclosure, we have entered into perhaps the most difficult financial time since the great depression in the 1930’s. The personal financial crisis affecting the lives of millions is tragic and will undoubtedly have a ripple effect that will take years to unfold. In my over twenty years as a financial advisor and now, as a Money Coach, I have repeatedly witnessed the consequences that our collective lack of financial education and unconscious money patterns have on our ability to make informed financial decisions. Although we have evolved socially and technologically, we remain highly underdeveloped when it comes to money, which is proving to be hazardous to our personal and national health.

As a Money Coach, I am faced daily with how to help these people to pick up the pieces of their lives. I am saddened that I didn’t meet these people earlier. I know how much they needed coaching and objective advice to prevent them from making the financial mistakes that have now devastated their lives. While the damage has been done and the fallout great, hindsight is valuable in understanding that much of this could have been prevented. Yes, the government is responsible for deregulating the mortgage industry and not properly watch-dogging their practices. But how else might these people have been spared? If we cannot rely on our government to do their job, which is increasingly the case, then we must learn to rely upon ourselves, and our own knowledge. Part of that formula has to be to demand financial and critical thinking education, which is virtually absent in our schools. Without this, this cycle of financial illiteracy will never end. We do not need more advanced algebra. Few of us ever use this in our daily lives. What we do need is financial education, knowledge of how our monetary system and the markets work and personal finance, which is part of our daily lives. But we need even more than that.

Our financial systems have become so complex and our knowledge so minimal, that I fear that without our knowing it, we are becoming increasingly vulnerable to being victimized. One of the ways we can proactively decrease our vulnerability (in additional to being more educated and getting objective advice), is to understand our own patterns and behaviors around money. Armed with this knowledge we are less likely to be blindsided. In my work as a Money Coach, I use eight archetypes (referred to as “money types”) to help clients understand their personal behaviors and tendencies around money. This knowledge is highly useful in helping them identify and change their financial behaviors, which is a major step toward making good choices.

The knowledge of archetypes and their impact on our lives was advanced by psychologist Carl Jung and later by others such as Joseph Campbell. If we look at the archetypal patterns held by the majority of Americans impacted today, we can easily identify the “Innocent” and the “Fool” archetype, as the predominant “money types.” Characteristically, the Innocent money type takes the ostrich approach to money management. They are generally fearful, anxious, naïve and avoidant around money. The Fool archetype is inclined to take risks, be impulsive, not look at the fine print, or conduct the necessary due diligence. These are the people who are now losing their homes or are in bankruptcy. Many of them will move right into the “Victim” archetype which often blames others and (possibly rightly so) feels angry, betrayed, and becomes trapped and disempowered by their story. This is a hard place to rise from for most people. And unfortunately the more this “energy” pervades the collectively unconscious, the greater the likelihood that we will create a national self-fulfilling prophecy.

When it comes to identifying and changing our money patterns, there is little help or even real understanding of these issues. Even most psychologists admit they are not trained or educated around money issues. And, while Behavioral Finance has begun to delve into this arena, it is not actively in the trenches with the people who are impacted.

I worked with a couple a few years ago who had been having issues in their marriage that were largely attributable to a series of “bad” financial choices that occurred over a ten year period. The wife was a classic “Innocent” money type and the husband was the “Fool” money type. Basically, the wife hated dealing with money and abdicated all financial responsibility and then became “victim” to his choices and felt very angry and betrayed. The husband had consistently made lots of money but each time he made it, he lost it. He never diversified, was impulsive, over-confident and highly speculative. The last straw was when he leveraged their home to buy a piece of speculative property and they had run out of money trying to develop it. By the time they reached out to me, their marriage was on the rocks -- as were their finances.

I proceeded to first work with them to understand their underlying patterns and how they played off of one another. After helping them both see their own part in creating the circumstances and claim responsibility for their choices, they became motivated to make changes. Once this was accomplished, I worked with each of them to see how their financial behaviors were self-sabotaging and gave them specific strategies for communicating about money and changing their behavior. When the time came to help them clean up their finances, they were able to see how they needed to get out of the spec property quickly, even at a loss. This was a difficult choice but necessary to prevent further financial risk. They sold the property and have completely reclaimed their lives and their marriage. They are out of debt and live within their means. They have completely shifted their archetypal patterns. This occurred less than two years ago...just before the collapse of the real estate market. They had a sub-prime loan and I am certain they would have been among the millions of others who lost their home.

The most important thing about this story is not what I did to help them but that they recognized they had a problem and sought help. And they were willing to do the work to understand their patterns so they could then make the right choices. Our patterns and behaviors are what dictate our choices so we must seek to understand them or risk being unconsciously ruled by them. Here are some important tips to avoid the pitfalls of the Innocent or Fool money type:

The Innocent money type needs to:

• Understand where their fear and anxiety originates, Chances are the Innocent had a parent who was very fearful and/or anxious around money and thus inherited this pattern.
• Stop being so trusting of others.
• Develop a clear financial decision-making process that helps overcome indecision.
• Avoid putting their financial security solely in someone else’s hands.
• Learn to become financially independent; even little steps will increase self-esteem.
• Speak up when things don’t feel right or fair financially.
• Become educated – take a financial literacy course.
• Know that even a decision by default is still a choice and you are responsible for it.

The Fool money type needs to:

• Inquire into why they are in such a hurry to make uninformed financial decisions. Learn to slow down the decision-making process.
• Take time to do the research and read the fine print.
• Review with others the pro’s and con’s of their choices to make sure they’re not fooling themselves.
• Learn to set consistent and realistic financial goals and expectations.
• Discuss risk factors in detail before signing on the dotted line.
• Be willing get to get objective advice.

If we are to rise above the financial circumstances that exist today, we all need to look at our own money patterns and collective “money wound.” Money can either be left as our “shadow” or be transformed by our willingness to look deeply into ourselves and take responsibility for our own choices and destiny. No good will ever come from accepting victimhood as our fate, nor is that a legacy to leave our children. Each of us, individually, creates the collective. One by one, we need to get the help we need to heal and transform our relationship to money so that together, we can make our country sustainably prosperous and whole again.

Deborah Price is founder of The Money Coaching Institute (www.money-therapy.com), a training organization that helps financial advisors, therapists and coaches understand and better serve their clients.

Money Coaching is a step-by-step process for understanding and changing one’s relationship with money in order to live a more purposeful and prosperous life. Through education and awareness, The Money Coaching Institute is committed to empowering others around money, both personally and practically.

A former financial advisor for over twenty years with firms such as Merrill Lynch, Mass Mutual, AIG and London Pacific Advisors, Deborah left the financial industry to pioneer the field of Money Coaching.

She is the author of Money Therapy: Using the Eight Money Types to Create Wealth and Prosperity; Money Magic: Unleashing Your Potential for Wealth and Prosperity; and Start Investing Online Today.

She has appeared on numerous radio and television shows throughout the United States and is considered a leading expert in her field.

Deborah works with individual and couples and is a consultant to both corporations and non-profit businesses. She resides in Petaluma, California with her family.

Contact Deborah at: dprice@money-therapy.com