What Did Your Parents REALLY Teach You About Money? (It Might Surprise You)


One of my most heady childhood memories is from the very first time I earned money from a "job." I was about 11 years old, and my father's best friend needed a mother's helper to entertain her baby for a couple of hours. In exchange, she gave me a $5 bill. (See also: Wise Think Writer's First Jobs)

I walked on air all the way back to my house. I had earned my own money — and it felt great!

I now realize that the excitement I felt at earning that five-spot stemmed from a very powerful belief about money that I have held since I was a small child: I believed that people should make their own way in the world. Having an opportunity to do so as a child made me feel grownup.

This unconscious money belief — which financial planners and psychologists refer to as a "money script" — informs every aspect of my dealings with money. Mine has mostly been positive, except when I was the beneficiary of my father's life insurance policy, and I was extremely uncomfortable with the idea of inheriting money that I did not earn. My money script is a relatively common one, and for the most part it serves me well.

Other money scripts can not only do a whammy on your psyche, but they can also lead to self-defeating and self-destructive behaviors.

Here's what you need to know about childhood money scripts, and how they affect your financial decisions and your financial future.

Where Money Scripts Come From

Financial psychologists Bradley Klontz and Ted Klontz coined the term "money script" to describe our core beliefs about money. According to Klontz and Klontz, "money scripts are typically unconscious, developed in childhood, passed down from generation to generation within families and cultures, contextually bound, and often only partial truths."

Considering the fact that my grandmother came from a long line of subsistence farmers in Kentucky who were generally suspicious of both the government and rich folks, it's pretty easy to see where this money script originated. And according to Klontz and Klontz, this origin of the money script also explains why it is so difficult for me to change my attitude, even though I'm generations away from those poor Kentucky farmers:

When money scripts are developed in response to an emotionally charged, dramatic, or traumatic personal, family, or cultural financial flashpoint, such as significant losses during the Great Depression, parental abandonment, or financial bailouts by a family member, money scripts can become resistant to change, even when they are self-destructive.

4 Types of Money Scripts

Bradley Klontz and his research partner Sonya Britt have determined that money scripts fall into one of four categories: Money Avoidance, Money Worship, Money Status, and Money Vigilance.

Money Avoidance

My money script is a form of money avoidance. Avoiders tend to believe that money is bad, rich people are greedy and unethical, and that they themselves do not deserve to have money. Individuals like myself who believe that they must make their own way in the world regard earned money as a source of virtue and unearned money as somehow immoral or wrong. In general, if you have a money avoidance script, you regard money as a source of anxiety, fear, or disgust.

Dealing With Avoidance

For me personally, it has helped to consistently remind myself that money is a tool — and therefore morally neutral in and of itself. It becomes a moral force only in how you use it. For that reason, I tried to use Dad's insurance money for things I thought he would approve of — like my sons' college funds, my retirement fund, and charity. I'm still struggling with my feelings about the money, but I recognize that my script reflects the struggles of previous generations, rather than my own life experiences.

Money Worship

If you have a money worship script, on the other hand, you believe that money leads to happiness and fulfillment. Money worshippers tend to believe that money will solve all of their problems, and that there will never be enough money. Money worshippers are vulnerable to workaholism and compulsive spending, since they are always chasing happiness in the form of wealth.

Dealing With Worship

The phrase "money can't buy happiness" was coined for money worshippers. If you have a worship script, you need to remind yourself that the really satisfying things in life have nothing to do with money. It's a difficult process, but it's important to make the choices that will increase your actual happiness, rather than those that will increase your financial "happiness."

Money Status

An individual with a money status script believes that net worth is related to self-worth. These are the individuals who feel that they must show off their "wealth" at all costs, even if it means going into deep debt just to keep up appearances. Having a money status script will lead to attempts to impress others with the accoutrements of status, and often leads to falling for get-rich-quick schemes.

Dealing With Status

Individuals with status script must remember that no one is paying as much attention to them and their stuff as they are. This can be tough to remember, as individuals with status scripts will often hang out together. But thinking about what is really important to you — do you care more about earning enough money to have a new BMW each year, or would you rather scale back and spend more time with your family? — is a good way to work on turning off this script.

Money Vigilance

Finally, individuals with money vigilance scripts tend to have their finances in order, because these scripts state that saving money and being frugal are of utmost importance. However, money vigilance is not always good news for those who follow the script. Misers (think Ebenezer Scrooge) have strong money vigilance scripts, to the point where they deny themselves basic comforts for fear of spending any money unnecessarily.

Dealing With Vigilance

Generally, those with vigilance scripts are not sabotaging their own financial future. However, they may be hurting themselves and their relationships if they allow their vigilance to become miserly. As an individual with a vigilance script, I do know that it's unlikely your friends and family are silent about your frugality, but it might be wise to listen if their comments make it clear that your financial choices are hurting someone.

Overlapping Scripts

While many individuals will generally fall into only one category of money script, it is possible to have several overlapping scripts, even if they are conflicting money beliefs.

For instance, in addition to my money avoidance script, I have a strong money vigilance tendency. This comes down to me on my mother's side, where my great-grandmother — who was quite wealthy — squirreled money away in purses and handbags, to the point that her family found over $3000 in cash among her handbags after she passed away in 1976.

Avoidance and vigilance are two scripts that seem to correlate well together. Even if you are uncomfortable with owning money, it would still make sense to try to keep careful track of the money you have. But Bradley Klontz often sees two money scripts that seem to be diametrically opposed:

Sometimes we have a lot of correlation between people who are money avoidance and also are money worshippers. They may seem to be totally opposite approaches to money, but when you think about it more holistically, it does make sense. The people who are so adamantly against rich people — if you actually sit down with them, they actually would like to be rich.

Not only would having these conflicting beliefs be emotionally taxing, but it could also lead to some seriously poor financial decisions. You might financially sabotage yourself in order to avoid becoming wealthy — while still compulsively spending what money you do have in the hopes that it will help you to feel happier.

Know Thyself

Without understanding the particular scripts that inform your money choices, you will never be able to pinpoint the beliefs that are holding you back from your goals. Take the time to think about your most deeply held money beliefs and figure out if they are helping or hurting your financial future.

Which money script (or scripts) do you follow? Please share in comments!

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