Integrated financial planners and financial therapists are in the wellbeing business. I see wellbeing as having three essential components: financial, emotional/spiritual, and physical. Our relationship with money and our behavior around money affect all three. Those behaviors are driven by our beliefs.
“Money scripts” is the term many financial therapists use for our deep, often unconscious beliefs around money. It was coined almost two decades ago by Brad Klontz and Ted Klontz when the three of us were working on a co-authored book.
Money scripts are typically formed early in life, often before the age of ten. They are formed overtly and covertly by what we see people do and say around money. As very young children, our minds are like big sponges with little context for what is right or wrong, true or false. We take everything from our parents and caretakers as truth. Suppose a child often hears parents talking about money worries, or sees them spending impulsively, or sees them being extremely frugal. The child will take in that dynamic or behavior as being “the way things are” about money. They develop their own set of beliefs and assumptions—their money scripts.
Some money scripts are relatively shallow or flexible. Others, the ones that become problematic, are extreme or rigid beliefs. These deep money scripts usually come from some type of childhood trauma, or wounding. The trauma may or may not be directly related to money.
To cope with these traumas, we come up with strategies that are formed with good intentions, meant to protect against emotional pain. These become our money scripts. For example, if I believe that the only way I can get money is to work hard for it, that’s a strategy. It’s something I see as an absolute truth. It’s non-negotiable; it’s how the world is.
I want to emphasize that these beliefs are largely unconscious. We aren’t typically aware of them. This process is not something we do intentionally.
It’s also important to remember that every money script is partially true and partially false. They are not inherently good or bad. Money scripts will be true in some situations and not so true in others. They are contextual. The problem is that, for extreme and rigid money scripts, we apply them even in circumstances where they don’t fit or don’t work, where they may actually harm our wellbeing.
Many of a person’s money scripts tend to fall into one of four general categories: Money Avoidance (money is bad), Money Worship (more money will fix everything), Money Status (my self-worth equals my net worth), and Money Vigilance (being guarded and fearful about money). However, it’s important to know that we all have many money scripts, not just one or just a few. They may fit into different categories, and some may contradict each other.
Money scripts are created by protective inner parts of us with the positive intention of protecting us from the pain of trauma. Typically, what we needed in that moment of wounding was an adult being there for us, understanding our feelings, and explaining things to us. Since we did not get what we needed, parts of ourselves stepped in with strategies and protective money scripts meant to keep us from ever feeling that pain again.
Despite the good intentions behind them, money scripts limit our choices and hinder us from learning helpful and healthy behaviors around money. As our situations change, as we change, our money scripts may no longer serve us well, but we continue the behavior that was originally intended to protect us.
One tool for identifying your money scripts is the Klontz Money Scripts Inventory – Revised (KMSI-R), which was developed by Brad Klontz and Sonya Britt Lutter, who have generously given permission for it to be used. You can find it online if you want to begin exploring the money scripts behind your own money behavior.
Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.