What are your core beliefs about money?
The four "money scripts" and how they can shape our financial behavior
I’m back from a two week hiatus, full of newfound financial knowledge about things I’m less versed in like taxes, bankruptcy, insurance and how to buy a home. My AFC (Accredited Financial Counselor) exam is on the 9th. I need to keep using my time to study, but I’ll be back to posting weekly after that.
Before I disappear again I want to talk about an idea I came across in my financial counseling textbook:1
“money scripts.”
Money scripts are “unconscious, core beliefs about money that we developed in childhood and young adulthood and that drive financial behaviors.”2
They can affect people of all ages, of all cultures, in all tax brackets.
The researchers identified four of them:
Money Avoidance
Money Worship
Money Status
Money Vigilance.
I’m going to explain what these scripts are and what I think we can get out of understanding them. (All of the following quotes, unless otherwise noted, are from the book cited in the first footnote. The sources the book cites are also in the footnotes).
Money Avoidance
People who hold money avoidant beliefs, as the name suggests, tend to avoid dealing with money at all. They tend to spend money unconsciously (hello, 22-year-old me) and may even avoid spending money on necessary items. Money avoidant people often have the following scripts running through their minds: “money is bad or evil” and “wealthy people are corrupt and greedy.” (Klontz et. al. 2011; Klontz & Britt, 2012).34
In money avoidant people, money tends to trigger disgust, anxiety and fear (three Inside Out characters take the wheel). Money avoidance is also associated with compulsive buying and workaholism.
Single people and young adults are most likely to hold money avoidant beliefs, but people seem to slowly grow out of them: “money avoidance beliefs tend to decrease with age (Klontz et al., 2011).”
Money Worship
Money worship is the belief that more money = more happiness:
“Money worshippers believe that they can never have enough money, and that they will never be able to afford what they want (Klontz & Britt, 2012).
That is, they perceive that their needs will never be met resulting in a vicious cycle in which there will always be some dollar amount or physical item they believe will make them happier (Lawson, Klontz, & Britt, (2015).”5
Money worship positively predicted hoarding, compulsive buying and workaholism.
This money script immediately made me think of this famous quote from Joseph Heller, as told by Kurt Vonnegut. He and Vonnegut were at a billionaire’s party on Long Island and Kurt turns to Joseph:
“I said, Joe, how does it make you feel to know that our host only yesterday may have made more money than your novel ‘Catch-22’ has earned in its entire history?” And Joe said, “I’ve got something he can never have.” And I said, “What on earth could that be, Joe?” And Joe said, “The knowledge that I’ve got enough.”
Now anxiety about having “enough” means one thing for people living below, at or near the poverty line, but money worship beliefs seem to extend beyond the point of basic needs. No matter how much people with money worship beliefs earn, no matter how many things they buy, no matter the net worth they reach, they never feel like they have enough.
Money Status
You know the type:
“Individuals with money status beliefs endorse a tendency to buy the newest, most expensive things, and equate their self-worth with their net worth (Klontz & Britt, 2012).”
“They tend to be materialistic, and therefore, competitive in terms of wanting to acquire more than those around them (Klontz et al., 2011).
Those with money status beliefs think less about money facilitating individual satisfaction and more about using money to demonstrate their social standing and feelings of self worth:
“Money status differs from money worship in that money worshippers are concerned with the positive feelings money can give them, whereas those with money status beliefs are over focused on an outward display of their money to garner the respect of others (Lawson et al, 2015).”
It’s externally focused. This script calls to mind influencers who pay to take pictures next to private planes. It’s less about actually getting on a private plane and more about what the appearance of riding a private plane communicates about them.
Not to say we aren’t all susceptible to this one, at least a little. I think this money script is the lifeblood of branded products, period.
But does it actually work?
When I learned about the “money status” script it immediately reminded me of this idea called “the paradox of wealth.” I came across it in a Medium post6 (now book) by Morgan Housel called “The Psychology of Money” during my debt repayment years:
People driven by money status scripts want to use money to signal to others that they’re admirable, worth knowing and important.
But Housel points out that this mission often fails to even meet that goal because people will see your wealth, skip their estimation of you and think of themselves instead.
In the Medium post, Housel gives this example of someone hanging a painting on their wall by a renowned artist.
The owner of the painting thinks: ‘People will think I am sophisticated because I have this expensive piece of art.’ But more often than not, Housel says, the observer of the painting is bypassing their opinion of the painting owner completely — they’re only thinking of how much they might like to be the kind of person with a fancy painting on their wall.
Money Vigilance
Money vigilance is like the straight-A, Valedictorian of money scripts. Everything the money vigilant person does is, on paper, good for them:
“The money vigilant are typically more alert and watchful of their finances and strongly believe it is important to save for the future. Money vigilance beliefs appear to have a protective effect…it is associated with positive financial outcomes…The money vigilant tend to be high income earners with higher net worth.”
Money vigilance was found to be negatively associated with compulsive buying, gambling disorder and risky financial behaviors.
But, like the Valedictorian in high school who never had fun and always looked stressed:
“Excessive wariness and/or anxiety around money may lead these individuals to have less positive experiences with their money.”
People who are super money vigilant can miss out on enjoying what their good habits and good fortune can provide: mental peace about their financial situation.
Chelsea Fagan, founder and CEO of The Financial Diet, recently talked about the “invisible force field” having a sufficient safety net of money can provide:
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The money vigilant may not be as inclined to benefit from this “force field” they have access to. They may worry about money even if they really don’t need to worry about money. They may take fewer risks even if they can afford to take risks. They may forgo a vacation they desperately need. Stay at a job they don’t like.
They may focus entirely on their future to the detriment of their present.
I think that there are pieces of all of these money scripts swimming in each of our minds.
We don’t have to be ashamed of our cultural or familial conditioning around them. We may accept that some of these have had a larger hold on us that we would like, or we may even feel good about what some of these scripts have helped us do: stay awake to inequality, think about our future, save for a pair of quality, brand name shoes we really want, keep us from splurging on an impromptu trip to Europe.
The point, I believe, is to unpack these unconscious narratives — really examine them and understand how they could be shaping our financial behaviors. Ask ourselves if they really align with what we believe today, or if we’ve outgrown some of them.
There are more specific narratives that we carry around about money, particular to our own families and cultures and lore. In my soon-to-launch financial coaching practice I’m looking forward to helping clients unpack those specific scripts as they renegotiate their relationship to their finances.
…I just need to pass this test!
See you on the other side, and thanks for reading.
-Bethel
P.S. — If you’d like to be added to a delightfully expanding list of people interested in becoming a client when my LLC books open up, just reply to this email or dm me. I’ll be offering discounts on packages for the first cohort of clients as I build up experience hours.
ETC.
If you’re curious about which money scripts you might carry, researcher Brad Klonz created a 33 question quiz.
Freddie Smith on how to buy a house in 2024 (this really demonstrates how much having a solid budget and being debt-free ahead of attempting to buy a house can be a boon).
Contrapoints on Envy
“You do not need to have any special experience to be free. You just need to relate 100 percent fully with whatever you’re experiencing—the good, the bad, and the ugly.” - Andrew Holecek
Durband, Dorothy B., et al. Financial Counseling Edited by Dorothy B. Durband, Ryan H. Law, Angela K. Mazzolini. DeGraff, Alycia N., and Daniel Dillon. “Chapter 4, A Systemic Approach to Understanding Diversity in Financial Counseling.” p. 58, “Chapter 11, “Identifying Problematic Financial Behaviors and Money Disorders.” 154-156. A. Springer International Publishing : Imprint: Springer, 2019.
Ibid
Klontz, B T., & Britt, S. L. (2012). How clients’ money scripts predict their financial behaviors. Journal of Financial Planning, 25(11), 33-43
Klontz, B., Britt, S., Mentzer, J., & Klontz, T. (2011). Money beliefs and financial behaviors: Development of the Klontz money script inventory. Journal of Financial Therapy, 2(1), 1-22. https://doi.org/10.4148/jft.v2i1.451
Klontz, B. T., Horwitz, E. J., & Klontz, P. T. (2015). Stages of change and motivational interviewing in financial therapy. In B. T. Klontz, S. L. Britt, & K. L. Archuleta (Eds.), Financial therapy: Theory, research & practice (pp. 347-362). New York, NY: Springer.
I loved all the examples and connections you made!