The way you think about money says a lot about you as a person, and about how good you are at saving and planning for the future. One way to get to the bottom of how you think about money is using something called a Money Script.
What is a Money Script?
“Money Script” is a term coined by Brad Klontz, a thought leader in the world of financial therapy. Basically, money scripts are your unconscious beliefs about money, often rooted in childhood, that affect your adult behaviors and perspectives.
A common example: People who grew up during the Great Depression typically became very cost-conscious adults who were always concerned about saving money, even if they were very comfortable financially later in life. No matter how much they saved, they had a hard time justifying any expense.
If we asked you, “What is your first memory of money?”. The answer will tell you where your money script starts.
4 Basic Money Scripts
Money scripts come in seemingly infinite forms, but they primarily fall into four basic categories:
1. Money Avoidance
One of the most misquoted verses in the Bible says that “the love of money is the root of all evil.” People who fall into the Money Avoidance category probably agree with the more popular (and incorrect) version of this verse that people love quoting: “Money is the root of all evil.”
A few common money scripts in this category:
- All wealthy people are greedy.
- Poor people are inherently purer than wealthy people.
- Better to give than receive.
2. Money Worship
As you might have guessed, this one is the opposite of the first category. People in the Money Worship category pursue money as a stabilizing force in their lives, believing it will fill the void or provide the security they need. But they often don’t just sit on the money. They may overspend in the mistaken belief that more stuff=more happiness.
- Money is power.
- Money is freedom.
- If I just buy X, I will finally be happy.
3. Money Status
Whereas someone in the Money Worship category is using money as a way of “self-medicating,” those in the Money Status category directly connect their own sense of self-worth to their net worth. They believe that having more stuff than someone else makes them better.
- If I don’t buy the latest technology, I’ll be left behind.
- Wealthy people are happier.
4. Money Vigilance
This last category is the healthiest of the four, although it can also be taken to an extreme. Basically, people in the Money Vigilance category frequently evaluate their own spending and saving to ensure they are making wise decisions. Sounds good, right? But we all know that person who will never allow themselves to enjoy the things their money can do for them because they’re too vigilant about their spending.
- Never pay for anything with credit.
- Nothing you buy will ever feel as good as saving your money will.
10 Popular (and Unhealthy) Money Scripts
Brad Klontz put together a list of the most common money scripts, and I think it’s a great list, so I’ll just present it here with no commentary other than to ask yourself one question: Which ones look familiar to you?
- More money will make things better.
- Money is bad.
- I don’t deserve money.
- I deserve to spend money.
- There will never be enough money.
- There will always be enough money.
- Money is unimportant.
- Money will give me meaning.
- It’s not nice (or necessary) to talk about money.
- If you are good, the universe will supply all your needs.
How to Determine Your Money Script
So how can you determine which scripts are impacting your finances? Here are a few ideas:
- Think back – Ask yourself what is your first memory of money? How old were you?
- Draw it out – If visuals help you, draw what you think of when you hear the word money. Don’t think, just draw the first image that comes to you when you think of money. Then sit back and see if you notice anything about the image.
- Test the waters – Are your feelings towards money negative or positive? Are they empowering or self defeating?
- See what comes to mind – What phrases come to mind when you think of money? Old sayings we often hear from our parents like penny wise, pound foolish—do you still think of money that way?
- Journal – Journal about all these things and then talk to a financial planner about it. Make sure the financial planner has experience working with clients on money scripts. Any advisor with the RLP® (Registered Life Planner) designation can help you think through money scripts. If you need more help, you can also find financial therapists that are trained in this type of financial counseling.
Want to Talk About How a Money Script May Impact Your Financial Future?
At Clarity Wealth, our advisors are Registered Life Planners who can help you better understand your relationship with money—and help you set yourself up for success in the future.