Rewriting the Script

Ross Menke

WHAT DO YOU BELIEVE about money? I’m talking here about money scripts—subconscious beliefs developed since childhood that influence your financial behavior.

These beliefs have been studied extensively by Ted and Brad Klontz, the father-and-son team who founded the Financial Psychology Institute and authored Mind Over Money. Here are some common money scripts:

  • “Avoid debt at all costs.”
  • “Money is the root of all evil.”
  • “We can always make more money.”

While there’s an element of truth to each, problems arise when we accept them as absolute truths: They can spur damaging financial behavior and cost us dearly. Beliefs about money can be categorized into four broad categories—three of which will likely hurt your financial well-being:

Money Avoidance. Folks in this category believe that money is somehow bad, leading them to overspend and ignore financial problems. They may vacillate between believing money can solve all of their problems and being scornful of those who have money. Money avoiders typically end up with little money saved.

Money Worship. Money worshippers believe that more money and possessions will solve all their problems, and yet they also think that they’ll never be able to afford the life of their dreams. This can lead to unhealthy financial behavior, including working too hard to obtain more money, hoarding possessions and racking up consumer debt.

Money Status. Individuals in this category see a direct connection between their self-worth and their net worth—or, at least, their net worth as perceived by others. They feel a need to put their possessions on display, as they strive to “keep up with the Joneses.” Thanks to their overspending, which is sometimes coupled with a gambling habit and a tendency to lie to their spouse about their spending, people in this group often end up accumulating relatively little wealth.

Money Vigilance. These individuals tend to be very aware of where they stand financially and are overly concerned about their financial well-being. Common traits are hard work, frugality and a belief in never accepting a financial handout. Although there’s a level of financial anxiety associated with money vigilance, it often results in a higher income and net worth. This can ultimately be a good thing. But taken too far, money vigilance can cause folks to never truly enjoy the wealth they amass.

Do you have any of these traits? Since these money scripts have most likely been in place for your entire life or ever since a major, life-altering event, change likely won’t come easily. It may take a huge effort to reverse course and build new, positive habits—and, for that, you may need help from somebody with a sound knowledge of financial psychology who’s able to coach you toward better behavior.

Ross Menke is a Certified Financial Planner. He strives to provide clear and concise advice, so his clients can achieve their life goals. Ross’s previous articles include Paper ChaseStart Small and Never Retire. Follow Ross on Twitter @RossVMenke.

Do you enjoy HumbleDollar? Please support our work with a donation. Want to receive daily email alerts about new articles? Click here. How about getting our twice-weekly newsletter? Sign up now.

Browse Articles

Notify of
1 Comment
Oldest Most Voted
Inline Feedbacks
View all comments

Free Newsletter