Understanding family attitudes towards money may improve financial decisions and reduce financial stress.
People inherit more from their parents and
grandparents than big feet, eye color, self-discipline, a passion for sports,
or an artistic bent. Most also assume their families’ ideas and attitudes
toward money. Money beliefs are often passed down from generation to generation,
along with great grandma’s quilts, ancestral photos, and family culture.1
Researchers call these inherited money mindsets
‘money scripts.’ These are categories of belief associated with problematic
financial decisions that create chronic stress.1, 2 The authors of Wired for Wealth explained:3
“A money script is not
necessarily wrong, but neither is it necessarily right. Our scripts are often
skewed, exaggerated, or one dimensional, consisting of incomplete or partial truths.
They are usually highly contextual, true in one circumstance but false in many
others…Since our money scripts are mostly unconscious, we don’t question their
accuracy or examine the degree to which they are true and work for us, yet we
continue to act on them as if they were entirely true.”
Understanding the scripts that underlie financial
choices may help improve decision-making and reduce financial stress.
Researchers at the University of Kansas studied four factors that encompass a variety
of money scripts:
1.
Money
avoidance: Some money avoiders believe they don’t deserve to have money. Others
think money is bad. Either way, money can be a source of fear, anxiety, or
disgust. Money avoiders often sabotage their financial success. They may choose
not to spend money on reasonable and essential items, or they may give money
away so they have as little as possible.1, 2
2.
Money
worship: Money worshippers share a “belief that more money will solve all of
life’s problems and bring happiness...”2 The reward of more money
becomes a carrot dangling just ahead that is never quite reached. These beliefs
have been associated with compulsive hoarding, unreasonable risk-taking,
gambling, overspending, compulsive buying, and other destructive financial behaviors.1,
2
3.
Money
status: People whose beliefs register on this scale adhere to the idea that money
confers status. They see a clear distinction between socio-economic classes,
and their sense of self-worth is often linked to net worth. In addition, status
scripters tend to equate success with money. Some may pretend to have more
money than they do in order to appear successful.2
4.
Money
vigilance: The vigilant believe it is important to work and save. They are
watchful, frugal, and concerned about finances. While these traits can support
healthy financial decisions, the vigilant are often anxious about money matters
and wary of financial risk. Consequently, their ability to enjoy the benefits
and security of money may be limited.2
Within these categories, the 10 money scripts
that result in chronic stress are:3
1.
More
money will make things better. Generations of families with this script may
spend their lives accumulating more.
2.
Money is
bad. Grounded in the belief money makes people bad or unhappy, this script
may lead to financial self-sabotage.
3.
I don’t
deserve money. This belief may accompany an inheritance or
windfall. It may also lead to people earning below their potential.
4.
I deserve
to spend money. Everyone does. However, when this leads to
overspending it creates financial problems.
5.
There
will never be enough money. Fear and anxiety may cause people to work long
hours, neglect relationships, and fail to enjoy the benefits of their labor.
6.
There will
always be enough money. A belief the universe will always provide,
whether a person takes action or not.
7.
Money is
unimportant. This rationalization is used to excuse poor financial
decisions.
8.
Money
will give my life meaning. People with this script often immediately and
strongly reject it. Their actions may tell a different story.
9.
It’s not
nice (or necessary) to talk about money. This attitude may be formed
by the idea it is not polite to talk about money, politics, or religion.
10. If you are good, the universe will supply all
your needs. This belief is prevalent among people in helping professions and
those from strong religious backgrounds.
Many people who earn substantial incomes and make
sound decisions in other areas of their lives compromise their financial
security by making poor financial choices. In some cases, inherited money
scripts are the issue. The good news is it’s possible to change the way you
think about money. First, it’s important to identify the money beliefs that may
be stunting your ability to grow wealth. The next step is adopting new ways of
thinking, and that often means learning more about money. Financial knowledge
can be a powerful tool.2, 3
If you would like to discuss your current
financial situation or explore your relationship with money, give us a call at 877-340-1717.
Sources:
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