Written by Alex Seleznev, MBA, CFP®, CFA | April 3, 2024
Did you know that our financial attitudes shape whether we seek investment advice or avoid it altogether? It's true! According to a fascinating study in the Journal of Financial Planning, every one of us has what's called a “money script”.
These are deep-rooted beliefs about money that form in childhood. The sooner you can identify your “money script”, the more likely you are to interrupt the destructive behaviors and change the course.
1️⃣ Money Avoidance
People who avoid money see it as bad and believe they don't deserve it. They fear and dislike money, thinking wealthy people are greedy.
They go back and forth between thinking money could solve their problems and feeling guilty about having it. This can lead them to both sabotage their finances and work too hard for money.
Avoiding dealing with money can result in poor financial health, including overspending, relying on others for money, and avoiding checking bank and investment statements.
2️⃣ Money Worship
These individuals believe that more money equals more happiness and think they'll never have enough money for what they want.
They constantly spend in an attempt to buy happiness, ending up with lower income, net worth, and even stuck in credit card debt.
Money worshipers tend to compulsively spend, hoard possessions, prioritize work over family, ignore their financial situation, give money they can't afford, and rely on others financially.
3️⃣ Money Status
These individuals believe their worth is determined by their financial status. They may overspend to project affluence, and some genuinely believe this approach will lead to financial success.
They may spend more than they can afford to look successful, even if they're not.
They often have less money and income, might come from less affluent backgrounds, and may compulsively spend and even lie about their spending.
Some might even gamble excessively to prove their worth.
4️⃣ Money Vigilance
These folks are careful about their money. They like saving and think people should earn money, not get handouts.
They prefer to buy things outright and avoid using credit. This helps them make more money and have more savings.
They worry about money and keep it private from most people, but they're honest with those close to them.
Being careful with money helps them avoid overspending and neglecting their finances. But they might miss out on enjoying their money if they're too worried all the time.
So what “money script” do you identify with?