How Our Money Beliefs Keep Us Poor

Very early in life, children begin to internalize messages about money’s purpose – how it works, what it promises, its overall significance. These messages come from parents and the wider cultural environment. Sometimes they are specific message about money, usually delivered in the form of a saying – money doesn’t grow on trees – or messages from the media about what money can do for you. Most powerful are the messages delivered by the way people behave around money, particularly in the home environment. Children are sponges. The infant brain is designed to learn from anything and everything that is going on around it, and much of that starts by being alert to the social world.  Since children can’t fully grasp reality, they translate what they see and hear into unconscious rules about life, including any internalized messages about money. These messages about money don’t necessarily reflect reality and may represent only a distorted or partial truth as seen through the eyes of a child. As children grow into adulthood, they often behave as though these partial truths are absolute truths. Messages become beliefs, beliefs become scripts. With a script you are locked into repeating a pattern, even when those patterns produce destructive behaviour. When money scripts are developed in response to an emotionally charged, dramatic, or traumatic personal or family flashpoint, they become even more resistant to change.

According to financial psychologists Brad Klontz and Ted Klontz, it’s these core beliefs about money that drive financial behaviours. They have identified 4 core scripts, 3 of which have been found to have a negative impact on financial health: money avoidance, money worship, and money status. These belief patterns are associated with lower levels of net worth, lower income, and higher amounts of credit card debt. Let’s have a quick look at each one.

Money Avoidance. Individuals who score high on money avoidance believe that money is bad or that they do not deserve money. For the money avoider, money is seen as a source of fear, anxiety, or disgust. Money avoiders have a negative association with money, believe that people of wealth are greedy and corrupt, and believe there is virtue in living with less money. At the same time, money avoiders are likely to hold the conflicting beliefs that having more money could end their problems and improve their self-worth and social status. As such, they may vacillate between the extremes of holding great contempt for money and people of wealth and placing too much value on the role of money in their own life satisfaction. Money avoiders may sabotage their financial success or give money away in an unconscious effort to have as little as possible, while at the same time they may be working excessive hours in an effort to make money. Typical Money Avoidance scripts include:

I do not deserve a lot of money when others have less than me

Rich people are greedy

It is not OK to have more than you need

There is virtue in living with less money

Money Worship. At their core, money worshippers are convinced that the key to happiness and the solution to all of their problems is to have more money. At the same time, they believe that one can never have enough money and they will never really be able to afford the things they want in life. The tension between believing that more money and things will make one happier and the sense that one will never have enough money can result in chronic overspending in an attempt to buy happiness. Typical Money Worship scripts include:

Things would get better if I had more money

It is hard to be poor and happy

You can never have enough money

You can’t trust people around money

Money Status. People who hold money status scripts see net worth and self-worth as being synonymous. They may pretend to have more money than they do, and as a result are at risk of overspending, in an effort to give people the impression that they are financially successful. They believe that if they live a virtuous life, the universe will take care of their financial needs, and that people are only as successful as the amount of money they earn. Typical Money Status scripts include:

Most poor people do not deserve to have money

I will not buy something unless it is new

People are only as successful as the amount of money they earn

If you are good, your financial needs will be taken care of

Interestingly, the same script can lead to a variety of behaviours. Consider “If only I had more money, I would be happy”. To obtain money, some people might turn into workaholics. Others might become obsessive underspenders or hoarders. Some might turn to unethical or illegal actions. Some might turn to gambling. Others might take excessive risks with their money chasing get-rich-quick schemes. Others, sensing they will never be able to have enough, may become chronically underemployed and feel helpless or depressed. Whatever is desired will always remain just out of reach.

The fourth script is Money Vigilance. The money vigilant are alert, watchful, and concerned about their financial welfare. They believe it is important to save and for people to work for their money and not be given financial handouts. If they can’t pay cash for something, they won’t buy it, and they are less likely to buy on credit. As a result, the money vigilant have higher income and higher net worth. The money vigilant are significantly less likely to spend compulsively, gamble excessively, enable others financially, and ignore their finances. However, while such an approach encourages saving and frugality, excessive wariness or anxiety keeps some people from enjoying the benefits and sense of security that money can provide. Typical Money Vigilant scripts include:

Money should be saved not spent

People should work for their money and not be given handouts

If you cannot pay cash for something, you should not buy it

It is not polite to talk about money


At Cambridge Money Coaching we believe it’s extremely important to talk about money. Money scripts and money beliefs are mostly subconscious and we are not aware of how they are sabotaging us.

Don’t let your subconscious money scripts undermine you. YOU CAN CHANGE THEM.

Book a free money chat here to learn how we can help you.

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How Clients’ Money Scripts Predict Their Financial Behaviors by Bradley T. Klontz, Psy.D., CFP®, and Sonya L. Britt, Ph.D., CFP®. Journal of Financial Planning

The Financial Wisdom of Ebenezer Scrooge by Ted Klontz, Rick Kahler and Bradley Klontz

Photo by Katt Yukawa on Unsplash