Are Money Scripts Driving You?
By Lem Cacho
Before I go on to that, let’s first talk about things you’ve heard about money. I know this is cliché, but you might have heard that money is the root of all evil. Some people might have been told that wealthy people ripped others off, hence the rich’s material affluence. Some feel that all else will fall in its rightful place once a financial windfall moves to their direction.
Others feel extremely bad – to the point of depression – when they see friends travel around the world and they don’t; or when their friends sport the latest luxury items that they don’t have. I had a friend who views money as a status conferring necessity and would rant about things she couldn’t have because of lack of money. I tried to bear with her at one point, but it dragged on and on that every time we talk her depressing tirade was non-stop. Her speech involved lines like “I wish I could do this or do that; have this or have that only if I have the money.” I stopped talking to her.
Does this sound familiar to you? Do you know of people similar to these? Are you this person?
Don’t get me wrong. If you have money, but hate the notion of it, give it to me. I need it. How we view money is more than simple when you think about it. In fact, experts believe that money scripts – how we view money and what we think when we have it or not – could affect our behavior and our relationships with other people. It could make or break a person as much as it could make or break your family.
Money Scripts
In a study published in the Journal of Financial Therapy, Ted Klontz, Klontz Consulting Group, together with three colleagues from Kansas State University, developed the Klontz-Money Script Inventory (Klontz-MSI) that can provide insight into how clients of financial planners and practitioners think about money.
The Klontz-MSI sampled 422 respondents and identified four distinct money belief patterns. These are: (1) money avoidance; (2) money worship; (3) money status; and (4) money vigilance. Let’s look at them one by one.
The Money Avoiders
People who fall into the first script are those who believe that money is bad or that they don’t deserve it all. Money avoiders see money as something that stirs up fear which makes them anxious or disgusted. They are afraid they might abuse their credit cards, might self-sabotage their financial success, or even avoid reasonable and necessary purchases. According to Klontz, financial denial, financial rejection, under spending and excessive risk aversion results from money avoidance script.
The Money Worshippers
The second script, money worshipping, is the most common among Americans. According to Klontz, people who subscribe to “more money will make things better” tend to believe that as income increases the more their problems get solved. Money worshippers often mistake more wealth with happiness.
However, evidence suggest otherwise. Daniel Kahneman, professor of psychology and public affairs at Princeton University, said there is no link between happiness and money, even if household income increases. He said the significant economic gains experienced by Americans in the past few decades have not been accompanied by a rise in life satisfaction. To be blunt about it, it was found that distrust and depression was associated with increases in income.
Take the case of someone winning the lottery. Ecstatic, right? Research shows that although winners now have the means of buying all things they think they need have, there is a tendency to become even more depressed in some cases. They are not significantly happier than those who didn’t win and even reported that they no longer fancy ordinary, but pleasurable activities.
Klontz said that people who fall into the money worshipping scripts tend to become compulsive hoarders, unreasonable risk-takers, pathological gamblers, workaholics, compulsive buyers and tend to overspend.
The “I Have Money, Ergo I Exist”
The third script, money status, involves people who are concerned about the association between self-worth and net-worth. They are the type who are very competitive in the sense that they need to have more than their neighbors can have. They are also the kind of people who see the clear distinction between socioeconomic classes. Unfortunately for these people, their overzealous aptitude towards success and money believing that it would confer them with status, shows negative personality attributes. Research shows they have lower ratings of well-being, lower levels of self-actualization, lower levels of vitality and happiness. If there’s anything that will make these people rank higher it would be anxiety, physical symptoms and unhappiness.
What is alarming though, is that people found in this category are those with lesser educational attainment. They grew up in a socioeconomic environment that reinforces the idea that money equals status. And this being so, they tend to overspend and take risks excessively with rapid wealth attainment as their goal.
The Money Vigilantes
Lastly, money vigilantes. People who fall into this script see money, be it plenty or not, as a source of deep shame and secrecy. They are those who hide cash under mattresses believing it’s much better than saving it in the bank. They are the frugal type (frugality is good but not to the extreme). They are constantly wary or anxious about a pending financial disaster to the point that they no longer enjoy the benefits and security of the money they have. They are the type who prefers cash over credit cards.
If you belong to any of these scripts, don’t worry. They are disorders that can be treated. And the first step to treatment is to acknowledge that you have them.
