The 4 Types of Money Scripts – Which One is Yours?
In this article, we’ll go over the four main types of money scripts, so you can identify your own and understand how it impacts your finances.
Table of Contents:
- What Are Money Scripts?
- The 4 Types of Money Scripts
- Why Are Money Scripts Important?
- How Money Scripts Affect Your Financial Decisions
- How to Change Your Money Script for Better Financial Health
- Money Scripts Quiz
- To Recap
- FAQs
In this current century, with its many issues with inflation, financial validation, online scams, flaunt culture, and many more, many of us have complex relationships with money, including money dysmorphia.
Have you ever wondered why you feel, think, or act a certain way about money? This is where money scripts come in.
These are underlying beliefs we have about money, often shaped by experiences, culture, and what we observed growing up.
Each of us has a specific money script that drives our financial decisions, from how much we save to how we spend or invest.
In this article, we’ll go over the four main types of money scripts, so you can identify your own and understand how it impacts your finances.
What Are Money Scripts?
Money scripts are unconscious beliefs about money, typically formed in childhood. They shape our financial behaviour as adults and influence our financial decisions, often in ways that we don’t even realise.
These scripts are mental patterns influenced by family, society, and personal experiences.
Research published in the Journal of Financial Therapy shows that these beliefs affect our day-to-day financial choices, impacting our wealth and financial health over time.
Money scripts were first identified by Dr. Brad Klontz, a financial psychologist, who found that our financial decisions are often rooted in psychological beliefs rather than logic.
So, if you've ever wondered why people make irrational money decisions, it might just be their money script at work.
The 4 Types of Money Scripts
1. Money Avoidance:
Money Avoidance is when people feel uncomfortable or guilty about having money, often believing that wealth is linked to corruption or unfairness.
Money avoiders tend to believe that they don’t deserve to be rich, or that rich people are “bad” in some way.
This script can lead to behaviours like underspending, avoiding investments, or giving money away to avoid the discomfort of wealth.
People with a Money Avoidance script may also avoid financial planning, thinking that it’s safer to not engage with money at all.
Let’s look at how this manifests:
Jane thinks money is the root of all evil and prefers to live a simple life.
She often avoids conversations about money, avoids looking at her bank account, and struggles to stick to a budget.
Despite working hard, she lives paycheck-to-paycheck because she has difficulty saving.
2. Money Worship:
Money Worship is the opposite of money avoidance. It is the belief that having more money will solve all of one’s life problems and make one happier.
People with this script often think, “If I only had more money, everything would be fine,” and may feel that no matter how much they earn, it’s never enough.
They often value money as a way to achieve happiness or personal worth, leading them to overspend or chase money excessively, even at the cost of their well-being.
While many people understand that money doesn’t buy happiness, money worshippers often equate wealth with self-worth, leading to a cycle of dissatisfaction.
Here’s how it manifests:
Peter believes that if he just had more money, his life would be perfect.
He works long hours and sacrifices time with friends and family, thinking that more money will bring him happiness.
However, he often feels unfulfilled and is in constant debt because he spends on expensive items he believes will improve his happiness.
3. Money Status:
Money Status is a script where a person’s self-worth is heavily tied to their net worth.
People with this belief often see their financial standing as a reflection of their value as individuals.
They often feel the need to "keep up with the Joneses," making it a routine to prioritise showing off wealth, even if it puts them in financial strain.
They might seek expensive items or show off material possessions to prove their worth to others.
This type of script leads to risky spending and may create a need to earn and display wealth for validation.
Money Status can also create a need for financial competition, where people measure their success based on how much they earn or own compared to others.
This is how a person with money status would behave:
Sarah wants people to see her as successful, so she buys high-end items and always has the latest gadgets.
Even though she can’t afford it, she continues to spend to maintain her appearance.
As a result, she’s accumulating debt and experiencing financial stress.
4. Money Vigilance:
Money Vigilance is a cautious approach to finances, where people strongly believe in the importance of saving, budgeting, and avoiding debt.
Those with a Money Vigilance script tend to have good financial habits, like keeping an emergency fund, staying out of debt, and tracking expenses.
While this script generally promotes financial health, it can also make someone overly cautious, potentially avoiding beneficial financial opportunities like investments.
Money Vigilance can lead to an intense focus on security, sometimes causing unnecessary stress or reluctance to spend even on essentials.
Here’s how money vigilance works:
Ben is extremely cautious with his money. He saves diligently, avoids debt, and rarely splurges on anything.
Although he’s financially secure, his cautious nature sometimes prevents him from enjoying his money and living comfortably.
Why Are Money Scripts Important?
1. Money Scripts Shape Your Financial Decisions:
Money scripts influence everything, from how someone saves or spends to their approach to investing.
Knowing your money script can help you understand why you might feel anxious about spending, avoid financial risks, or overspend on things you don’t need.
This is especially true since managing money in your 20s and 30s is critical.
2. Money Scripts Affect Financial Health and Wealth Accumulation:
Understanding your money script can lead to better wealth management.
By taking a money scripts quiz and identifying your own script, you can better control habits that may be harming your wealth-building efforts and start developing a financial strategy that works in your favour.
3. Money Scripts Influence Relationships with Others:
Money scripts don’t just impact your personal finances; they also play a big role in relationships.
For instance, a person with a “Money Status” script might find it hard to connect with others who don’t value material wealth in the same way.
This can lead to disagreements or strain in relationships, especially if financial priorities clash.
Understanding money scripts in this context can help you communicate better about financial goals, reducing tension and building stronger partnerships.
4. Money Scripts Can Be Changed for Financial Success:
One of the most powerful aspects of money scripts is that they aren’t permanent. Just as they were learned, they can also be unlearned or adjusted for better financial outcomes.
Knowing what money scripts are and understanding how they work gives you a practical starting point to shift these beliefs and adopt a healthier relationship with money.
For example, if you identify as a “Money Vigilant” with a tendency to hoard money due to financial insecurity, recognising this can help you take measured risks and pursue wealth-building opportunities, instead of letting fear control your finances.
How Money Scripts Affect Your Financial Decisions
Money scripts are like mental autopilots and can either help or hinder wealth management efforts in the following ways:
- Money Avoidance might lead to under-earning or avoiding investments. Someone who believes "money is the root of all evil" might subconsciously avoid earning or saving large sums, viewing money as a negative force.
- Money Worship could lead to overspending or getting trapped in debt. Someone with a "money equals happiness" mindset might overspend to try and achieve satisfaction, leading to debt rather than fulfillment.
- Money Status often leads to high levels of debt and financial stress. People who believe they have to put up certain appearances to assume a higher net worth might not give much thought to doing anything to earn that money, diminishing any careful consideration that might go into making financial decisions.
- Money Vigilance promotes saving but may lead to excessive caution with spending. A money-vigilant person tends to become excessively frugal to a fault, making them neglect spending on their needs and other essentials.
How to Change Your Money Script for Better Financial Health
1. Identify:
Start by taking a money scripts quiz to determine which of the four money scripts influences your financial decisions the most. This self-assessment can provide insights into your beliefs about money, such as whether you view it as a source of freedom or a source of anxiety.
2. Challenge:
Next, examine your beliefs about money. Ask yourself, “Are these beliefs helping me achieve my financial goals?” Reflecting on these thoughts can reveal if your script is indeed holding you back from financial success.
3. Educate:
Once you understand your money script, it’s important to educate yourself about healthy financial habits. This can include learning how to create and stick to a budget, understanding the importance of saving, and exploring investment options.
4. Practice:
Begin implementing small changes in your daily financial habits. For instance, set a realistic budget that you can follow and review regularly. Automating your savings—such as transferring a portion of your paycheck directly into a savings account—can also help you build a financial cushion without having to think about it. Consider creating an investment plan, even if it starts small.
5. Reinforce:
Surround yourself with supportive people who have positive money habits. Join financial groups or workshops to reinforce your new beliefs and practices. Engaging with others can motivate you to stick to your goals and provide accountability.
6. Reflect:
Lastly, regularly reflect on your progress. Assess how your new actions align with your financial goals. Adjust your strategies as needed. Over time, this reflection can lead to a shift in your money script, reinforcing healthier beliefs about wealth management.
Money Scripts Quiz
Want to find out which money script best describes you? Take the quiz below!
To Recap
- Money scripts are unconscious beliefs about money that are mostly formed in childhood.
- Money scripts are mental patterns influenced by family, society, and personal experiences.
- Money Avoidance is when people believe that having too much money makes them greedy or that wealthy people are bad.
- Money Worship is when people value money as a way to achieve happiness or personal worth, leading them to chase money excessively.
- Money Status is the script where people associate their self-worth with their net worth.
- Money Vigilance is a script characterised by a cautious, disciplined approach to finances.
- Money scripts influence how someone saves or spends, as well as their approach to investing.
- Check more money conversations that you need to have here.
FAQs
Q1. What are money scripts?
Money scripts are beliefs about money that guide our financial decisions.
Q2. Who developed the concept of money scripts?
Dr. Brad Klontz, a financial psychologist, developed the concept of money scripts.
Q3. How many types of money scripts are there?
There are four main types: Money Avoidance, Money Worship, Money Status, and Money Vigilance.
Q4. How do money scripts affect your financial decisions?
They influence how you spend, save, or invest, based on unconscious beliefs.
Q5. Can I have more than one money script?
Yes, people can exhibit traits of multiple scripts, but one script is usually dominant.
Q6. How do I find out my money script?
You can take a *money scripts quiz* to discover your primary money script.
Q7. Are money scripts permanent?
No, with awareness and practice, you can modify your money script.
Q8. Why is it important to understand my money script?
Knowing your script helps you make better financial choices and achieve financial goals.
Q9. How does money script wealth management work?
Financial planners use money scripts to help clients understand their financial habits and make adjustments.
Q10. Can money scripts affect my mental health?
Yes, certain scripts can lead to stress or anxiety around finances.
Disclaimer: This article was written to provide guidance and understanding. It is not an exhaustive article and should not be taken as financial advice. Obiex will not be held liable for your investment decisions.
