By: Stephanie Burke, Candidate for CFP® Certification
What are your thoughts, feelings, and beliefs about money? What about your partner, and do they differ from your own? Sometimes, the conflict we experience around money in our personal lives can be attributed to incongruent money scripts with those with whom we share finances. Let’s dive into the term money script and how understanding it can help us achieve our financial goals.
Developed by financial psychologist Dr. Brad Klontz, a money script is an unconscious belief formed, often in childhood, around money. He identifies four general money scripts that affect people’s attitudes and beliefs about money.
Money Avoidance
Individuals with money avoidance tendencies take a backseat approach to their finances, even ignoring them entirely. This person avoids conversations about their financial matters, preferring to let someone else take the lead. They may avoid necessary tasks like bill paying and expense tracking and be vehemently opposed to investing.
Money Worship
Money worship is characterized by the belief that more money solves many of life’s problems, to the point that there can never be enough money. The core of this belief is a feeling that if one could simply get that raise/buy this item/live in this house, they would finally feel the happiness they crave. This person might constantly prioritize work over family and tend to overspend in pursuing more.
Money Status
While similar to worship, an individual with a money status script may feel that their entire self-worth is tied to their financial status. This person needs to have the best clothes, cars, and other luxury items to symbolize success to those around them. This person is concerned about what others think of their financial status, even if the outward projection does not align with what their net worth statement reflects.
Money Vigilance
A money-vigilant individual is attentive and diligent about their finances, albeit somewhat cautious. This person strives to save regularly and live within their means but may have trouble letting go and spending that hard-saved money, even if it’s to spend on the very thing that has motivated them to save. This person may feel anxiety about having enough money saved, which could cause a tendency to hoard resources and obsess over finances.
Increasing self-awareness around your money script and those with whom you have a financial relationship can reduce friction and improve communication with those closest to you, including your financial advisor. Ultimately, understanding our biases regarding personal finance makes us more intelligent investors and may help us make healthier choices with our money.