“As soon as we become aware of money, we develop beliefs about it-- beliefs we cling to, sometimes for the rest of our lives, often at the cost of our souls.”

The beliefs we hold about money are shaped by our family, culture and socioeconomic backgrounds.
The reasons we think, act and spend the way we do are as complicated as we are. But they don’t have to define us.

We inherited our beliefs and attitude towards money; they’re learned in childhood and passed down from our parents, who learned them from their parents. These deep-held beliefs–our money scripts–influence all of our financial decisions, for better or for worse. Chances are, you may not even be aware of them.

Financial psychologist Bradley Klontz and his partner Sonya Britt have studied money behavior extensively throughout their careers. Their studies suggest that all of our spending behavior originates from one of four money scripts: avoidance, worship, status and vigilance.

Do you identify with any of these money beliefs?

Money Avoider

According to Klontz, this is the most common money belief in America. Avoiders believe that money is inherently bad, or that they don’t deserve to have money. They have a lot of fear, anxiety and disgust about money and believe that people who DO have money are greedy and corrupt.

  • Wealthy people are greedy
  • I don’t deserve to have nice things
  • I am a better person because I don’t have a lot of money
  • It’s not okay to accumulate more wealth than you can spend in a lifetime
  • I just don’t want to think about money / I’ll worry about it later

Take action: Save 10% of all you earn, right off the top, and live on the rest. Develop a clear investment strategy, ahead of time, so you don’t have to focus on money decisions more than is comfortable. Share your plan with a trusted friend or family member to help hold you accountable to reaching your financial goals. As your savings grow, your comfort and confidence will grow with them.

Money Worshippers

Money Worshipers believe that money is the key to happiness and the solution to all of their problems, and one can never have enough. And yet the pursuit of money never fully satisfies them. This tension can lead to people prioritizing money over family and overspending in an attempt to buy happiness.

Money worshipers can have a tendency towards hoarding money, excessive debt and workaholism. You might fall into this category if these statements feel familiar:

  • If only I had enough money, things would be better
  • I’ll be happier once I have more money
  • I deserve this. I’ll just put it on my credit card
  • There’s not enough money to go around

Take action: Take control of your finances with a budget and pay off credit card debt. Take an honest inventory of your needs and wants. Don’t confuse the two.

If you don’t own your money, your money will own you—the choice is yours. Generosity is the best antidote there is for fear and greed. Switch this money script on its head and give time or money to the good causes you care about most. The act of giving feels good and promotes an abundance mindset, which can offset negative feelings associated with money.

Status Seekers

Money status seekers see net worth and self-worth as synonymous. They may pretend to have more money than they do, overspending as a result. They believe people are only as successful as the amount of money they have and may take unnecessary or unwise risks in the pursuit of more money.

You may have negative money status beliefs if this sounds familiar:

  • It is not what you know, it’s who you know that counts in life
  • Results speak for themselves
  • Only successful people have the right to an opinion
  • I need the right clothes / bag / car so people think I’m successful
  • If something isn’t the best, it isn’t worth buying
  • If I’m good enough, my needs will be taken care of

Take action: Implement a mandatory ‘cooling-off’ period before any big purchases. Ask yourself (and be honest) if the item you want to purchase will actually make you happier.

It can also be helpful to break down the real cost of a specific purchase in terms of your time. The median hourly wage in the United States is $20.00. That $2000 designer bag looks a lot less appealing when you realize it’s costing you 150 after-tax hours of your precious time to purchase. Money is a renewable resource, time isn’t.

Money Vigilant

The money vigilant are alert, watchful and concerned about their financial welfare. They believe it is important to save and for people to work for their money. If they can’t pay cash for something, they won’t buy it.

They also tend to be anxious and secretive about their finances and avoid discussing money with others, apart from those closest to them. 

  • I would be so anxious if I don’t have an emergency fund
  • I won’t buy it if I can’t pay for it with cash
  • I don’t deserve money when others have less than me
  • It’s wrong to talk too much about money.

Take action: Money vigilance is excellent for maintaining financial wellness, however it can lead to anxiety or miserliness if you’re not careful.

Help manage any stress you feel around money by putting together a savings and spending plan that addresses all of your financial worries. And if you’re not comfortable discussing your finances with others, check in with a trusted friend or family member to make sure you’re on the right track.

And don’t forget to have fun! Put some money aside in a ‘fun budget’ and make sure to do the things that bring you joy. Create time and space in your budget to enjoy the rewards of your hard work.

My Own Legacy of Avoidance

Klontz and Britt believe that some people operate from a curious blend of more than one money script.

I grew up in working-class neighborhoods in the west end of Montreal. Always tenants, my family rented a small three-bedroom apartment. Our primary playgrounds were streets, back alleys and factory fields.

When riding the bus through neighboring communities on the way downtown, I remember staring out the window at the well-maintained, red-brick character homes perched on manicured lawns. The soft, quiet, safe feeling of their tree-lined streets and big parks was in stark contrast to the forest of balconies and cracked sidewalks we played on.

Although I loved the neighborhood I grew up in, I could not escape the idea that the clean, neat, happy-looking people that lived in these affluent neighborhoods were better than us.

This idea was reinforced by my parents, who shared a money avoidance script that supported the ideas that they didn’t deserve money and that wealthy people were greedy and corrupt. My parents saw money as a source of fear, anxiety and disgust. My father took pride in working long and hard, for almost nothing.

As a young man, I rejected the hopelessness and despair that marked the poverty mentality I was raised with. I saw wealth as a cure-all, and I was prepared to go where I had to go and take whatever risk I had to take to get there. I put everything aside to pursue wealth. I had developed an unhealthy money worship script.

While I think it’s safe to say that today my main money script is vigilance–saving, investing, and protecting–I still wrestle with the less healthy scripts of my past. When my guard is down, the avoider and worshipper can both rear their ugly heads.

You CAN Change Your Money Scripts

Are your own money beliefs helping you towards building financial freedom? Or are they keeping you from achieving your money goals? If you struggle with following a budget, accumulating debt or saving for retirement, chances are your money scripts are holding you back.

You can change your beliefs and behavior. Knowing what drives your financial decisions can help you reach smart money goals, whether that’s saving more or spending less on impulse purchases. Once you’ve identified your thought patterns and behaviors, you’ll be in a better position to take action and reach your financial goals.

If you’re curious as to where you’d fall in Klontz and Britt’s four categories, you can take the quiz on their website yourmentalwealthadvisors.com.