The word “money” can bring up negative emotions and feelings for many people. In fact, money is the most cited factor that negatively affects U.S. adults’ mental health. Therefore, it’s important for us to reflect on our relationship with money, which can impact our financial decisions and relationships.
Many of our subconscious beliefs and attitudes toward money are developed in early childhood from our parents, environment, and socioeconomic status. For example, some children are taught that you should always save your money and try to not spend it. In other households, money is taboo and not discussed at all. Children may experience that when money is brought up it often leads to their parents arguing and creates tension.
“Financial flash points” also have a significant impact and are traumatic or emotional life events associated with money that drive our financial behaviors. For example, growing up in poverty and having uncertainty where your next meal would come from, having a parent lose their job and/or house, or parents getting divorced can make an impact on our financial beliefs as an adult.
Mental health professionals have studied the psychology of money and categorized these financial beliefs into several “money scripts.” There are four main money scripts: money avoidance, money worship, money status, and money vigilance.
Money avoidance is the belief that money is bad or that you don’t deserve money. Individuals with this belief often experience feelings of fear, guilt, disgust, or anxiety toward money. For some people, it may be difficult to accept gifts from others due to feelings of guilt. This negative association with money can create the belief that rich people are greedy.
Money worship is the belief that money is associated with freedom and the solution to all their problems. It’s the viewpoint that the more money you have, the better your life will always be. Money worshippers often seek fulfillment from buying more stuff, which can result in compulsive spending habits and never feeling satisfied.
Money status is the belief that self-worth is directly tied to net worth or financial status. There’s often a competitive nature to this belief, which can result in overspending to appear as being “better off” than others. Even though research has illustrated being too concerned about financial status has been associated with lower levels of well-being, increased anxiety, and unhappiness.
Money vigilance is the belief that money should be saved, not spent. Individuals with this money script often experience excessive wariness or anxiety about their financial future, which often prevents them from enjoying the benefits and experiences money can provide. They tend to be discreet and private about their financial status and hold the beliefs that you should work hard to earn money and people shouldn’t be given “financial handouts.”
There are notable limitations to money scripts theory, just like other human-categorizing theories such as attachment theory and the Myers-Briggs Type Indicator. While there are only four main categories studied, humans are complex, and we don’t all fall into one “box” or belief system. However, this theory provides a great framework to start reflecting on your attitude toward money and why you hold certain subconscious beliefs. This reflection can help you begin to change any mindset that may not serve you well financially and/or emotionally.
If you choose to evaluate and reflect on your own money script beliefs, it’s important to practice mindfulness. Negative emotions such as shame, guilt, and anxiety may come up during this process. Mindfulness is the concentrated effort to simply observe emotions rather than judging and reacting to them. These emotions can become a great learning experience for things holding us back that can later help us make better financial decisions.
Gene Gard, CFA, CFP, CFT-I, is a Partner and Private Wealth Manager with Creative Planning. Creative Planning is one of the nation’s largest Registered Investment Advisory firms providing comprehensive wealth management services to ensure all elements of a client’s financial life are working together, including investments, taxes, estate planning, and risk management. For more information or to request a free, no-obligation consultation, visit CreativePlanning.com.
