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What Are Money Scripts?
“Money scripts” is a popular, clinically based term for general beliefs about money that are often unconscious and learned in childhood or early adolescence. These categories of beliefs were created to help people with money problems seeking relief. Money scripts tend to be passed down through generations. These beliefs tend to be partial truths about money or those who have (or do not have) money. Beliefs are related to different financial outcomes. Money beliefs are often measured in financial planning or coaching to understand how financial beliefs might impact a client’s ability to achieve money-related goals.
We learn a lot about money from our parents and, potentially, even from generations before them. Sometimes, these “lessons” we pick up aren’t always the most beneficial for our financial well-being down the road.
Financial psychologists identified four types of unconscious beliefs that financial therapy patients have about money. These beliefs influence a patient’s financial behavior. Researchers believed that some individuals may be “taught” money beliefs by parents or caregivers. These beliefs may also be inherited from your parents or even previous generations. Unfortunately, they’re not always positive. Understanding the four basic money scripts described below may help you better understand (or rethink) your relationship with money. Here’s a breakdown of each money script category.
The Four “Money Scripts”
Money Avoidance
People who fall into the money avoidance category tend to believe money is evil. People with money are evil, having too much money is terrible. Even the accumulation or desire for wealth is negative. While it may have started as a coping mechanism for people in lower socioeconomic environments to feel better about their situation, it can lead to self-destructive financial behaviors. After all, you need money to survive, whether you like it or not.
Money Worship or Money Focus
People who experience the money worship script put money on a pedestal. They believe that money, or the things money can buy, has the ability to solve all their problems. You can see these people all over social media, leaning on sports cars and showing off their mansion-side pools. People who fall into the money-worship script want to show that they have money (whether they really do or not), which is a slippery slope to overspending and poor wealth management.
Money Status
People who experience the money-status script believe their self-worth is tied to their net worth. Even if they don’t necessarily have money, they want to flaunt their “wealth” to make themselves seem more important. This is related to the “keeping up with the Joneses” mentality and can lead to higher credit card debt and overspending.
Money Vigilance
Those experiencing the money vigilance script tend to be more anxious about spending money, perhaps even more than is necessary. They’re generally future-oriented and have a strong desire to maintain a financial safety net for emergencies. This tends to be a positive money script since it leads to healthy saving and investing behaviors that often lead to long-term financial success.
Can Scripts Change?
While you might not have been able to choose which money script you learned growing up, you can change how you think about finances as an adult. For example, if you know you fall into the money-status script, you can focus on saving more money rather than spending it to show off your wealth. Knowing which script you fall into is the first step to helping you make healthier financial choices in the future.
Money Beliefs in Financial Planning
Measuring money beliefs can offer valuable insight into a client’s financial psychology. While there are tools available to measure the trademarked “money scripts,” other tools provide a more robust and scientific alternative to traditional measures.
Exploring Your Money Beliefs
After taking a money beliefs test that can uncover experiences, ask these questions:
- When you spend money, what is it for? Is it for the bare essentials? Do you spend on “things” to make yourself feel fulfilled? Or do you want to show off for your friends and family?
- How do you feel about wealthy people? Do you feel like they are evil and corrupt? Or, do some rich people use money for good?
- Do you have a rainy-day fund for emergencies? If you don’t, why not? Do you feel like you need to spend and enjoy money today? Or, do you have a longer-term view?
Uncovering Money Beliefs in Financial Planning
Financial planners, therapists, and psychologists assess clients’ characteristics to help them achieve goals. Many professionals assess the client’s mindset to jump-start conversations about money experiences. Firms can add these types of tools to the client experience.