What's Your "Money Script"?

 Most of us think we’re in full control of our financial decisions, but the truth is, many of our money behaviors are driven by subconscious beliefs we’ve had since childhood. These are known as "Money Scripts," according to a concept developed by financial psychologist Dr. Brad Klontz. According to Klontz, Money Scripts are:

• Learned in childhood from parents, relatives, and the environment we grow up in, peaking at age 6-7.

• Often unconscious, meaning we don’t even realize how much they influence our behaviors.

• Passed down through generations, perpetuating the same financial behaviors within families.

• Partial truths that may have worked in certain circumstances but are often incomplete or inaccurate.

• Ultimately responsible for our financial outcomes, determining whether we experience success, struggle, or stagnation with money.

Take a moment to pause and let that sink in: you are making decisions about saving and investing and budgeting based on what other people value, and using their biases -- not your own! Did your dad grow up in a single-parent household with five siblings and nothing to eat? I bet you also are a penny-pincher who never takes a moment to enjoy your hard-earned paycheck, even though you are doing great budgeting and saving for retirement, and can easily afford a vacation or two. Or maybe your favorite grandparent was always complaining about how "rich people are greedy and 'money is the root of all evil," so now you do everything in your power to avoid budgeting. You support a lazy sibling, spent recklessly, and always pick up the bar tab just to make sure you don't become wealthy and go against what grandma always preached.

There's nothing honorable or impartial in any of this. After all, it's your life: you have a Dream Life you want to create for yourself and your family, you have goals, you have hobbies and plans and hopes, and you know you need a smart Personal Financial Plan (PFP) to take you there. And yet because of the influences of others that shaped your emotions about money when you were as young as 6 or 7, you just can't seem to get it together. In fact, you blame yourself, and money is a constant source of stress for you. Fortunately the reality is it isn't your fault -- and you can change.

The first step to changing is to take a hard look in the mirror and discover your Money Scripts. Once you know where you stand, you can quickly identify the specific risks and dangerous financial decisions you're likely to make, and take action to change your mindset and stop yourself from making mistakes.

Dr. Klontz's Money Scripts

Let’s dive into the four main Money Scripts: Money Status, Money Vigilant, Money Avoidance, and Money Worship. As you read, don't jump to conclusions as to which one applies to you and wait until the very end, then go back and take a second look. Not only might you surprise yourself as to what your script is, you may find you have two scripts!

Money Status

Definition: Those with a Money Status script equate self-worth with net worth. They believe that having more money or owning more expensive things will make them feel better, more important, or more successful. They are constantly “Keeping Up with the Joneses” buying new cars, clothes, and TVs.

Example: You went to high school where half the students came from a wealthy part of town and drove nice cars. The "Rich Kids" seemed to be more popular and have more freedom. Now, as an adult, you may feel the need to always have the best and newest things to prove your value.

Financial Risks:

• Overspending and falling into debt just to maintain an image.

• Hiding purchases from your partner or spouse and lying about expenditures.

• Engaging in risky behaviors like compulsive gambling, stealing, or borrowing from family.

Actionable Steps to Counter Your Script:

 1. Reflect: Ask yourself, “does anyone care about the new car I just bought?" Chances are you'll get a few comments from close friends the first week you drive it to work, then everyone will ignore you again.

 2. Set Tight Budget Controls: Open a separate debit account with a monthly allowance just for discretionary spending. Do not allow yourself to spend more than you budget.

 3. Delete Socials: Of all the Money Scripts, this is the one most likely learned from people who aren't family, such as celebrities. Get your nose out of your phone to quiet the lies that fuel your Status Script.

 4. Read: The Millionaire Next Door: The Surprising Secrets of America's Wealthy by Thomas Stanley uncovers the truths about wealth and status. (Hint: wealthy people do not waste money buying new or shiny things for status, no matter how much they are worth.)

Money Worship

Definition: Those with a Money Worship script tend to believe that having more money will solve all of their problems. They think that happiness is tied directly to wealth accumulation and may become obsessed with increasing their income, often at the expense of other areas of life.

Example: You spend a lot of time on social media and fantasize about having the big houses, expensive cars, and new drip of the world's few successful influencers. You mistake their extreme spending with happiness, comfort, and wealth, and start spending mindlessly to try and copy them.

Financial Risks:

 • Money Worshippers have lower net worth and higher credit card debt than any other group.

 • Neglecting relationships and personal well-being in the pursuit of wealth.

 • Believing that money alone will solve problems, and avoiding deeper emotional or personal issues.

Actionable Steps:

 1. Redefine Success: Take a step back and evaluate other aspects of your life—family, health, relationships—and recognize that wealth is only one part of the equation.

 2. Schedule Time for Fun: Make time every week for personal development, family time, and self-care.

 3. Donate: Give to charity to prove to yourself that giving away money still produces happiness.

Money Vigilant

Definition: Individuals with a Money Vigilant script are hyper-aware of their financial situation and are constantly in saving mode. They’re so focused on financial security that they’re often afraid to spend any money, even when it’s necessary or when they can afford it.

Example: Let’s say you grew up in a household where your family struggled financially, perhaps due to a layoff or other financial hardship. Now, even though you’re in the military and have a steady paycheck, you can’t shake the fear of losing everything, so you save every penny and feel guilty when you spend.

Financial Risks:

 • You may miss out on enjoying life now, even though you have the financial means to do so.

 • You are extra stressed about finances, even though you are doing better saving for the future than any other group, because you're constantly obsessing over money.

Actionable Steps:

 1. Shift Your Mindset: Remind yourself that military service comes with guaranteed employment, stable income, and great benefits, so you aren't in as much financial danger as the average American.

 2. Schedule Budget Reviews: Limit yourself to reviewing your financial situation on a monthly basis -- or once every two weeks at the most -- in order to reduce the level of obsession you feel over the numbers.

 3. Delete Budget Apps: Apps are constantly sending you alerts and reminders, which pull you back into a sense of anxiety. Delete the apps and use a Google Sheets budget planner and tracker instead.

 4. Create a Fun Fund: Give yourself permission to enjoy your paycheck today by setting up a new and separate debit account (within budget) for guilt-free spending while maintaining financial responsibility.

Money Avoidance

Definition: People with a Money Avoidance script often believe that money is bad or that they don’t deserve to have it. They avoid dealing with finances and may undercharge for their work or refuse to think about money altogether because they associate it with greed or negative emotions.

Example: Perhaps you grew up hearing phrases like “money is the root of all evil” or saw family members struggle with debt, causing you to shy away from finances altogether.

Financial Risks:

 • Extremely low savings rates and account balances.

 • Ignoring financial responsibilities resulting in high levels of consumer debt.

 • You may self-sabotage by underpricing your services or not asking for deserved raises.

Actionable Steps:

 1. Start Small, Stay Consistent: Set a 30-minute calendar appointment to review your finances once a week. The more you face your finances, the more you'll realize their just numbers -- nothing evil about it.

 2. Assign Value to Your Work: If you struggle with underpricing your skills, research industry standards and adjust your rates accordingly.

 3. Study the Wealthy: Read books or articles about the generosity and philanthropy of wealthy people to replace other people's beliefs that "money is evil" with facts that prove wealth leads to kindness and charity.

Doing Something About It

Were you able to identify your beliefs, behaviors, and financial risks with one (or more) of the Money Scripts you just read about? Did you find that you are also falling into the same traps of those who came before you, with either under-saving, falling into debt, stressing about finances, or never letting yourself spend a few bucks to have some fun? How did you feel about the "actionable steps to overcome"? Can you do it?

Remember: you're an adult now. Your Money Script was written by other people for you when you were a little kid, starting around age 6 or 7. Back then you had virtually no control over the lessons learned about money, or the emotions and beliefs you formed based on those. But now you do. Don't let 6-year-old you beat you in an argument about money, and listen to grown up you! Most importantly, replace those adolescent emotions and beliefs with facts and figures from a real financial education. With just 50 hours of self study, you're likely to be able to create $100,000 or more in net worth for yourself. One option for getting started is our book Service and Wealth, available in paperback or as an eBook from Amazon.

Conclusion

Your Money Scripts play a huge role in your financial outcomes, and while they’ve been shaped by your past, they don’t have to control your future. By identifying your specific script, reflecting on how it affects your financial behaviors, and taking concrete action, you can rewrite the story of your financial life. As Dr. Klontz puts it: “Becoming aware of your Money Scripts is the first step to overcoming the unconscious beliefs that may be sabotaging your financial success.”

The reality, sadly, is that "smart people do dumb things", and no where is that more true than in personal finance and investing. If you feel that hits close to home for your financial journey -- give yourself a break! It's just emotion getting in the way of your actual smarts: so long as you can quiet the emotions and rewrite the script, you will transform into someone who is in total control of your money and financial future!

References:

 • Klontz, B. (2022). Psychology of Financial Planning.

 • Hidden Brain Podcast (2022). “Rewrite Your Money Story, with Dr. Brad Klontz.” Aired September 23rd, 2024.