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What Are Money Scripts? Money scripts are general beliefs about money that are often unconscious and learned during childhood or early adolescence. 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. Money scripts are related to different financial outcomes. Money scripts are often measured in financial planning or coaching to understand how financial beliefs might impact …
Let’s Agree to Disagree Agreeableness is a personality trait that is often overlooked or misunderstood when managing our financial lives. The field of personality psychology generally recognizes five primary personality traits that are understood to form the basic foundation of individual personality (often referred to as “the Big Five” or “OCEAN model”). These include openness to experience, extroversion, conscientiousness, neuroticism, and agreeableness. Here we take a closer look at the last trait, agreeableness. We …
Our latest financial psychology term describes how we can sometimes fall prey to errors in decision-making about others. The American Psychological Association defines fundamental attribution error this way: the tendency to overestimate the degree to which an individual’s behavior is determined by his or her abiding personal characteristics, attitudes, or beliefs and, correspondingly, to minimize the influence of the surrounding situation on that behavior (e.g., financial or social pressures). Your neighbor who is still unemployed …
Article Title: Predicting Stock Market Performance: The Influence of Gender and Personality on Financial Decision Making Publication: Journal of Individual Differences (2021) Authors: Thomas Plieger, Thomas Grunhage, Eilish Duke, Martin Reuter Reviewer: Sean Bogart Examining Risk-Taking: Beyond Self-Report Studies A large amount of research assessing investor risk-taking has shown the presence of several factors that increase the likelihood of taking investment risks. Variables such as stress, particularly depression and negative affect, have been linked …
Budgeting. Investing. Spending. Each of us reacts to money-related topics on a scale from negative to neutral to positive. Money attitudes are not perfect predictors of financial behaviors. However, how we feel about budgeting, spending, and investing impacts our financial goals. Indeed, our attitudes can affect the entire financial planning process, especially when working with others who may not share our perspectives. What Are Attitudes? Let’s start with the basics. What is an attitude? …