What Is a Money Script (And How Does It Impact Your Finances?)

Education, Financial Planning, Psychology & Money

Much of our daily behavior relies on habits. Take your morning routine. Do you jump right out of bed or do you snooze a few cycles? Are you a brush-your-teeth-before-breakfast or after- breakfast type of person? Do you tie your shoes with a single or double loop? Some of these things you might not even notice unless pointed out to you. They are learned behaviors and preferences that move you through the world, and they greatly impact your life. Researchers found this same principle applies to money.Your views, attitudes, and belief system about money shape the way you approach, discuss, and further your financial vision. The unwritten rules dictating your financial life are known as a money script.

Money scripts demonstrate your belief system about money and can illuminate both good and bad financial habits you’ve developed over the years. Knowing your money script can empower you to make actual, tactical changes to your financial life. 

What Are Money Scripts?

In 2011, financial psychologist Brad Klontz and his research team published a study in the Journal of Financial Therapy about people’s reactions to money-related statements like “It’s not polite to talk about money,” or “Things would be better if only I had more money.” 

These statements were meant to gauge people’s views and biases about money and how it operates in their lives. What Klontz and his team found was that people held four different systems of belief, which he called money scripts. He notes these beliefs are typically unconscious and likely learned during childhood and adolescence. 

Think back to the way your parents or guardians talked about money: 

• Did they pinch pennies and maintain a frugal lifestyle?
• Were they stressed about money?
• How did they approach the topic of money with you, if at all?
• Did they have disdain for people with either a lot of or very little money?

These questions help you think critically about money beliefs you’ve been internalizing for decades, and are correlated with your behavior and financial wellness. Let’s look at Klontz’s four money scripts and how they can help you understand your financial actions.

1. Money Avoidance

Does thinking about, talking about, or managing your money cause stress and anxiety? Do you envy people with more money? If so, you may fall into the money avoidance category. 

Money avoidance, Klontz found, is a fascinating paradox: someone can assume money is bad or tainted but still believe money will solve their problems. Money avoidance suggests that living without money elevates your moral status, which often leads to self-sabotage, doubt, and unhappiness with your wealth. 

Money avoidance may lead to giving away more money than you have (whether to family, friends, or charities) in an unconscious effort to decrease your worth.  Sticking to this script can also lead to not thinking about money, ignoring financial statements, and struggling to create and stick with a budget.

Actionable Resources to Fix Avoidance

Just because you fall into one of these scripts doesn’t mean the rest of your life is defined by them. Understanding your money script can help challenge you to make intentional improvements in your financial life. By employing healthy actions, you can assume a new outlook on how money affects your well being. 

Money avoiders benefit from:

• Checking-in on your money.
  • Instead of saving your statements for another day, make today the day you look at your credit card bill. 
  • Throw away the budget not working for you and start from scratch. Use a digital platform or app to track your spending habits.
  • Set regular check-in intervals, (i.e. weekly, monthly, or quarterly) to bring added structure to your plan. 
• Re-defining the role money plays in your life.
  • Right now you see money as a negative element. Re-think that space and list ways money can positively impact your life and others, like reaching your goals, eliminating debt, charitable giving, etc. 

2. Money Worship

Let’s start with a few money statements:

• Money is the key to happiness.
• Money can solve any problem.
• There will never be enough money. 

Do any of these statements ring true for you? If so, you may fall into the category Klontz calls money worship. 

This mindset leads people to believe that money is the end-goal. In the quest for accumulating wealth as rapidly as possible, people are left with an empty void since there will never be “enough” money to meet their ever-changing wants. People may prioritize work over family and other relationships and tend to overspend to maintain their prized status. 

Money worship takes retail therapy to heart by seeking to buy new things to bring a sense of happiness, purpose, and meaning. The problem is money can’t buy happiness, and this habit ends up leaving people miserable and in debt. 

Tips to Make Money a Means, Not the End. 

Money is a tool to help achieve your goals. But when money takes center stage, goals and dreams fall to the wayside. Here’s how you can redefine where money falls on your priority list:

• Bring your goals into focus.
  • Money is a vehicle to help reach your goals. When this gets blurry in the chase for more money, stop and think about your truest life goals. What’s at the top of the list? What do you value? How can your money bring about those values and goals? When money goes out of focus, your goals can take center stage.
• Give with intention.
  • Building charitable contributions into your plan can structure your finances in support of personally meaningful causes and organizations that also help others. Giving shifts your gaze from chasing money to seeing it work in other’s lives. 
• Curb impulse spending.
  • Let’s face it: shopping can be a thrill. It’s great to jump into a cozy new sweater or enjoy that new car smell, but the novelty wears off and can lead to buyer’s remorse. Before you purchase something new, take time to think about how that purchase fits with your goals. Does it further them or detract from them? Why do you want this new item? These questions get you thinking mindfully about what you purchase and why which can lead to better buying decisions.

3. Money Status

Closely linked to money worship, money status conflates net-worth and self-worth. This money script epitomizes the “Keeping Up with the Joneses” mentality. People lavishly overspend and maintain a lifestyle they can’t afford to impress those around them. This leads to lifestyle inflation which compromises their ability to save for the future.

Klontz’s research suggests a money status script can lead people to believe if they live a good life, the universe will reward them financially for their good behavior. He also found this script can lead to gambling and hiding spending habits from a spouse or family member.

Money status can be tough to deal with as society frequently pushes us to buy a house we can’t afford, upgrade our cars because we deserve it, and make random purchases under the guise of “self-care.” But this mindset doesn’t set you up for future success. 

How to Change the Definition

Money doesn’t define you. This can’t be said enough. While it might be hard to not indulge in the present, tracking your spending and saving will set you up for happiness in the future. When you manage your present money needs with foresight into your future needs, you can find that balance between saving for tomorrow and living for today. 

• Strive for financial and emotional health.
  • In life and in money, there needs to be a balance. It’s critical to find a balance that works for you and aligns with your values and goals. 
• Spend and save with intention.
  • When you spend with intention, you find you actually spend less. Before making a purchase, assess how it aligns with your goals and values. Is this purchase a bandaid or status symbol, or does it actually further your vision and improve your life?
  • The same idea applies to saving. When you have a goal for saving and investing money, you have more stake in its success. This brings about a more meaningful savings strategy so you can take that dream vacation, do your house remodel, send your kids to college, and retire with the lifestyle you want. 

4. Money Vigilance

This script involves people approaching their financial lives with swift practicality, logic, and thoughtfulness. Money vigilance tends to mean people view money as a byproduct of hard work, discipline, and frugality. People with this mindset aren’t waiting for a financial windfall or diligently scratching lottery tickets, instead, they approach money from a tactical perspective.

Unsurprisingly, Klontz views this script as the most financially stable and healthy one in the bunch. However, money vigilance can sometimes indicate a fear over one’s financial future, which can lead to anxiety and a lack of balance between spending and saving. This mindset can also mean people are private about finance matters and aren’t comfortable talking about their money with others. 

Tips to Save for Tomorrow and Live for Today

Money vigilant people can find it difficult to enjoy the money they have. Fears over the financial future can lead to anxiety, lack of sleep, and decreased life satisfaction. It’s key to find balance between spending and saving so you can enjoy your life now and in the future. 

Create a “fun” bucket in your savings account. This could be for anything you want — a day trip skydiving, dinner at your favorite restaurant, trying out a new hobby. Take time to enjoy the money you save. While frugality is an excellent trait, spending money on people, places, and experiences that mean something to you can lead to fulfillment and purpose. 

Rewrite Your Money Script

Remember, these money scripts aren’t set in stone and don’t have to define your future actions. Knowing how you relate to money now simply reveals previously undiscovered financial habits that can provide insight into how you view and manage money. 

No matter which category you fall into, take note of where you are and where you want to be. Ask yourself the following questions: 

• What steps can I take to improve my relationship with money?
• How can I balance spending and saving?
• What are my core values and are my current financial habits supporting those values?
• In what ways can my goals better align with my financial actions?

Our team loves helping people build a life they love. It starts by having a healthy relationship with money and using that healthy money outlook to expand your life. Ready to learn more? Set up a call today.