As featured in The Wall Street Journal, Money Magazine, and more!

Which Money Script Do You Live By?

This article was written by in Psychology. 5 comments.

Your money script is a story you tell yourself about money. This story, the way you approach your finances, an outlook on a certain segment of your life, can have a significant effect on your behavior. In the growing field of financial psychology, the money script is a key element for clients and patients.

Financial psychology is not quite a mainstream field of psychology yet, nor is it an approach that financial advisers normally consider. For clients who work with financial psychologists, however, there is a clear benefit.

Addressing stress-related issues from a financial behavior angle has been shown to be effective. For those who undergo this type of counseling, psychological distress decreases. When the practitioner is trained, clients come away with a better psychological relationship to money. There is not yet an accreditation in this field, so there’s always a chance of finding a psychologist or financial adviser who isn’t qualified for this type of role.

Discussion about money scripts could be a good way to open a conversation between a financial psychologist and his or her client. These scripts are described in a recent New York Times article:

Brad Klontz, a financial psychologist in Hawaii and an associate professor at Kansas State, thought up the phrase. In his research, Mr. Klontz has found four basic scripts: money avoidance, money worship, money status and money vigilance. Each has its own complications.

People with money avoidance tried to distance themselves from money. The result was predictable: They undermined their financial well-being.

Those who worshiped money believed it would cure all their problems, if they only had more of it.

People with a money status script seemed similar to money worshipers, except they connected money to their sense of well-being. Or as Mr. Klontz put it, self-worth was linked to net worth.

The last script was money vigilance. These people did not flaunt what they had; they paid their debts on time and were generally cautious about overspending. If anything, they were the ones who could deprive themselves for no rational reason.

These money scripts are more insightful than the approach to money I’ve previously thought about. A “money mindset” theory evaluates how someone perceives the concept of money as a whole. Money can be good, money can be bad, money can be neutral.

Those who think money is good might prioritize financial gain at the expense other goals, while those who think money is bad may limit themselves from achieving financial success. These money scripts offer some nuance that could help get to the root of a psychological issue.

In my initial adult years, my money script was money avoidance. I became aware I was in financial trouble, but there seemed to be nothing I could do about it. I chose a career path that would make financial goals incredibly difficult, and I was having only moderate success with being a website developer and consultant in my limited spare time.

I literally avoided my finances all the time. I couldn’t pay my student loan bills. I couldn’t pay my speeding tickets. I tried to keep low balances on my credit cards, but I still needed to take out an expensive cash advance from a credit card a few times to pay my bills.

This was not a good space, and the more I ignored it, the more I avoided stress and distress.

At least for a time. The growing mess eventually collapsed, and my financial problems were now an acute situation that I needed to resolve through drastic measures.

Now, despite writing about finances for more than a decade, I still can’t say my relationship with money is one hundred percent healthy. My life and my financial approach and philosophies have improved a great deal. I worked hard to build some success for myself.

But I still struggle.

When I started getting my financial life into shape, I took some good advice, advice I share often. I started tracking everything I spent and everything I earned, entering every single transaction into a program that could let me take a snapshot of my financial condition at any instance.

The software helped me track my progress as I paid down my student loans, and as I saw my net worth increasing, month after month once I had a job whose salary covered my basic expenses, and year after year as I continued along a path of making good financial choices, I enjoyed seeing those exponentially growing bar charts.

So maybe there was a hint of the money status script as I gained some happiness from a growing net worth. I never thought thought that my increasing net worth was linked to an increasing self-value or value to society, but when my future started looking bright, when I thought that I had a chance to some day be financially independent and free to pursue my dreams without a burden, that positive attitude kept me motivated.

But today, theoretically financial independent, I still fret. Nothing is permanent. No success will last forever. I can’t help thinking sometimes that this is the best it will ever be for me. And when challenges arise, as one did as I was going through the process of selling my business, I get concerned that my success thus far, as modest as it is compared to others who have made a name for themselves in this business, makes me a target.

And now, going through a problem with my apartment wherein I may be only partially covered by insurance, and I may have to turn to the help of an attorney, the distress shows itself again.

Money vigilance is how I’d describe my money script, starting from the day I decided to get my finances in order, tracking nearly every cent, to today, when I’m trying to protect what I have for my future. But this is basically a self-diagnosis.

The availability of information makes self-diagnosis an interesting way to evaluate oneself and can occasionally lead to insight and an improved outlook on life. This just highlights the importance of seeing a professional who has the training to provide effective tools and mechanisms for dealing with psychological issues.

Between vigilance and stress, I haven’t really had a chance to enjoy my success thus far in life. Once I get through my current problems, I need to focus more on this aspect of my life.

Seeing a financial psychologist would be a good idea for me — and failing that, going back to seeing a standard psychologist could help me as well. When I was going through the sale of my business and was dealing with stressful litigation, I started seeing a psychologist to deal with some of the stress and my irrational thoughts.

It was a helpful experience, and I would have continued the therapy longer if my health insurance provider didn’t change. My psychologist was not covered by the new insurance plan, but others were. It’s a poor excuse for stopping therapy, but at the time, the acute condition had ended and I felt prepared to move on.

Each of these money scripts can result in harmful financial behavior. And at least three of the four have applied to me in various ways throughout my adult life.

Do any of the four money scripts describe you? And would you seek professional guidance from a financial psychologist?

How does financial psychology fit in with an overall financial plan or an overall approach to personal health?

New York Times

Published or updated March 2, 2015. If you enjoyed this article receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

Email Email Print Print
About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 5 comments… read them below or add one }

avatar 1 Donna Freedman

I’m definitely “money vigilance,” although I would actually describe it as money HYPERvigilance. In the past I have deprived myself for no rational reason, and like you I fretted (still fret) that nothing really lasts and that things might go south.
Working on that. It HAS gotten better, but I still have my moments.

Reply to this comment

avatar 2 Anonymous

Seeking a behavioral health professional (one that you trust, is a good fit, and you have vetted, by interviewing and researching) can only be healthy and helpful for you, especially during times of crisis and stress. By taking that step you will be closer to thinking rationally about these issues and gaining that self-knowledge and self-actualization, which you (and everyone else, after all) are looking for.

Reply to this comment

avatar 3 Anonymous

Having a good relationship with money is I find quite challenging and as the field of financial psychology expands it will be extremely interesting. Personally I think there might be more types or scripts or as you’ve seen bits of all that appear depending on the circumstances.

Very interesting, to say the least – for me I think all 4 scripts apply at different times.

Reply to this comment

avatar 4 Anonymous

I am so glad to see you writing about financial psychology. I work as a financial psychologist and help people with money issues. All of us have money issues that we have to work through to have a healthy relationship with money. We can do this by talking more honestly to trusted others about our money and our feelings or if the problem is too intense by getting help either through financial therapy or financial psychology. Thanks for mentioning this field.

Reply to this comment

avatar 5 Anonymous

Worrying that this is the best it will ever be is a Good Thing. It keeps you motivated to ensure that it’s *not* the best it will ever be.

Anyway… most people coming to your blog have probably been money avoiders. Now I’m money vigilant, but with a monthly “slush fund” with which we can spend on anything. Thus, vigilant with reasonable enjoyment.

Reply to this comment

Leave a Comment

Note: Use your name or a unique handle, not the name of a website or business. No deep links or business URLs are allowed. Spam, including promotional linking to a company website, will be deleted. By submitting your comment you are agreeing to these terms and conditions.