Money is often analyzed as a straightforward tool for managing and allocating resources, but for many of us, it’s far more than that. It’s wrapped in emotions, personal history, and deep-seated beliefs that can influence how we handle finances—whether we’re aware of it or not. This idea lies at the heart of the work of financial psychologist Dr. Brad Klontz, whose book Mind Over Money and recent discussions shed light on how these "core money beliefs"—also known as "money scripts"—dictate much of our financial behaviors.
A revealing recent article on CNBC explains how our financial attitudes are shaped by unconscious scripts, often formed in childhood, that guide our behavior when it comes to earning, spending, and managing money. These scripts can be empowering, limiting, or even self-sabotaging. By understanding these money scripts, we can gain insight into our financial lives and make healthier, more intentional choices.
Let’s dive into the four core money scripts that Klontz identifies as influencing the financial lives of many Americans.
What Are Money Scripts?
According to Dr. Klontz, money scripts are unconscious beliefs about money that develop in response to our upbringing, cultural norms, and life experiences. These scripts shape the way we think about money—often without us even realizing it. Klontz, who has spent years studying the psychology of money, argues that identifying and challenging these money scripts is the key to improving our financial health.
In his work, Klontz identifies four main categories of money scripts. Each of these scripts represents a different way that individuals can relate to money, and they can have a significant impact on one’s financial behavior and well-being. Interestingly, only one of the four is at least sometimes linked to improved financial well-being.
1. Money Avoidance
People who have a "Money Avoidance" script may view money as dirty, evil, or morally corrupt. This script often originates from early experiences or family beliefs that money is inherently bad or that wealth is associated with greed or selfishness. Individuals with this mindset might struggle with feelings of guilt when they acquire money or avoid dealing with their finances altogether.
As Dr. Klontz points out, people with Money Avoidance scripts may:
- Avoid budgeting or planning for the future.
- Experience anxiety or discomfort when talking about money.
- Struggle with saving, even when they know it’s important.
In extreme cases, individuals with Money Avoidance may even subconsciously sabotage their financial success. They may fear success because it could lead to negative consequences, such as being perceived as greedy or unworthy.
2. Money Worship
On the opposite end of the spectrum is the "Money Worship" script. People who identify with this script tend to believe that money is the key to happiness, security, and social status. They might think that financial success will solve all their problems, or they may equate money with self-worth.
Klontz notes that individuals with a Money Worship script often:
- Prioritize money above other values, such as relationships or personal well-being.
- Feel the need to constantly accumulate wealth to feel secure or validated.
- Overwork or overspend in the pursuit of more money, sometimes at the expense of their health or happiness.
While having financial goals is important, those with a Money Worship script may find themselves in an endless cycle of striving for more, believing that if they just earn a little more, they’ll finally be happy. Without proper management of both expectations and of the earnings increases themselves, this mindset can lead to burnout, dissatisfaction, and disappointment.
3. Money Status
The "Money Status" script focuses on the idea that wealth is a symbol of social worth or success. People with this script derive their sense of value and identity from how much money they have or how they compare to others. They may be driven by the need to display their financial success outwardly, whether it’s through owning luxury items, driving expensive cars, or maintaining a certain lifestyle.
Dr. Klontz explains that individuals with a Money Status script often:
- Make financial decisions based on what will enhance their social status, rather than on practical considerations or long-term goals.
- Feel pressure to keep up with peers or maintain a certain image, even if it means going into debt.
- May struggle with feelings of inadequacy if they perceive themselves as less successful than others.
While striving for success can be motivating, those with Money Status scripts might find themselves stuck in a cycle of comparison, constantly measuring their self-worth against others' financial achievements (or perhaps more importantly, others' financial displays).
4. Money Vigilance
Finally, there is the "Money Vigilance" script, which is characterized by a cautious and careful approach to money. People with this script tend to be highly aware of the dangers of financial instability and prioritize saving, budgeting, and planning for the future. While this can be a healthy attitude, it can sometimes tip into excessive worry about money and an inability to enjoy the present.
Klontz explains that individuals with Money Vigilance scripts often:
- Feel anxious about spending money or taking financial risks.
- May over-save, to the point of neglecting their own enjoyment or life experiences.
- Struggle with the belief that it’s always better to save than to spend, even when it’s necessary or beneficial to treat oneself.
While vigilance and planning are important for long-term financial stability, an excessive focus on money can lead to chronic anxiety and a failure to enjoy the wealth or resources one has accumulated.
How to Reframe Your Money Scripts
Only the last of the four ("Money Vigilance") is associated with increased financial wellness. Such vigilance, to some degree, is essentially required to stay on top of your finances and make tough decisions when needed. That said, all virtues can become vices when taken to extremes.
Dr. Klontz believes that the first step in transforming your financial life is to become aware of your money scripts. By recognizing which script resonates most with you, you can begin to question whether it is serving your long-term financial well-being. This awareness can help you challenge negative beliefs and adopt healthier financial habits.
For example, if you identify with the Money Worship script, you might work on balancing your financial goals with other values, such as relationships and personal growth. Working with a professional to tie concrete financial goals to monetary outcomes can play an important role.
If you relate to Money Avoidance, you could start by facing your finances head-on and confronting any feelings of guilt or fear. A commitment to regularly scheduled meetings to directly address money goals, processes, and outcomes may be the most important thing you can do to make improvements on this mindset.
Klontz encourages individuals to reframe their core money beliefs by asking:
- Where did my money beliefs come from?
- Do these beliefs serve me, or are they holding me back?
- What new beliefs can I adopt to create a healthier relationship with money?
The Path Forward: Empowering Your Financial Life
The good news is that by examining and changing these core money scripts, individuals can shift their relationship with money and create more positive financial outcomes. Whether it’s breaking free from the constraints of Money Avoidance or finding a constructive and worry-free (or at least worry-less) approach to Money Vigilance, we can improve financial health by addressing the deeper psychological drivers of money behaviors.
Money isn’t just about numbers—it’s about emotions, beliefs, and behaviors. Understanding your money scripts can help you break free from self-limiting financial patterns and build a healthier, more empowering relationship with money. Working with someone experienced in working with (and working through) these psychological factors can be a big step in the right direction toward taking a healthy level of control of your financial future.
---
Sources:
Financial psychologist: Americans have 4 core money beliefs | https://www.cnbc.com/2024/08/01/financial-psychologist-americans-core-money-beliefs.html
2024-7356739.1 Exp 11/26