Simply Finance 101: The 4 Core Money Beliefs
Financial psychologists from Kansas State University conducted a study on Money Beliefs and Financial Behaviors by using a sample of 422 individuals who identified their level of agreement on 72 money-related beliefs. Through this study, they discovered four distinct money belief patterns and developed the Klontz Money Script Inventory. These four core money beliefs are Money Avoidance, Money Worship, Money Status, and Money Vigilance. Looking closer into these “Money Scripts” can help you gain insight into your money belief system and how it impacts your life, choices, and financial success.
The Klontz Money Script Inventory is a short assessment that can determine your money beliefs. Money beliefs are typically learned unconsciously in childhood and, when left unexamined, they can significantly impact your financial outcomes and behaviors. The good news is these beliefs can be unlearned and are, more often than not, just partial truths.
Gaining an awareness of your specific money beliefs can help you pinpoint and challenge your limiting beliefs, understand what influences your decisions, and act in your own best interest.
The Money Avoidance script:
“Money is bad.”
“I don’t deserve money.”
“Rich people are either greedy or corrupt.”
“To be good is to live with less money.”
The unhealthy money behaviors of Money Avoiders:
Self-sabotaging one’s own financial success
Overspending due to poor budget management
Simple ways Money Avoiders can overcome their limiting beliefs:
Make a habit of keeping track of your personal finances.
Come up with ways you can use money to do good things.
Set financial goals that are easy to achieve.
The Money Worship script:
“Money can buy happiness.”
“All my problems would be solved if I had more money.”
“I’m not satisfied with how much money I’m making. I need to push myself harder at work.”
The unhealthy money behaviors of Money Worshippers:
Accumulate credit card debt
Buy things to feel or achieve happiness
Prioritize work above all
Simple ways Money Worshippers can overcome their limiting beliefs:
Add “giving” to your budget. You can use this money to fund something meaningful to you like a charity or a friend’s small business.
Curb impulse buying and buyer’s remorse by reflecting on your intentions before purchasing something.
Do not let money define your happiness.
The Money Status script:
“I need to own the latest and most popular thing to impress my friends.”
“I don’t own a fancy car or wear designer clothes so I’m not successful.”
“I can’t afford this expensive item right now so I’ll just use my credit card and pay for it in installments.”
The unhealthy money behaviors of Money Status Seekers:
Equate their self-worth with their net worth
Becomes financially dependent or gets into debt because of overspending
Simple ways Money Status Seekers can overcome their limiting beliefs:
Live within your means.
Discuss your spending habits with a financial planner.
Do not let money define your success.
The Money Vigilant script:
“I’m so anxious about my finances. I need to save more to feel secure about my future.”
“I could spend my money on things or experiences that I would enjoy but I’d rather save it just in case things go south.”
“I’ve saved a lot of money already but instead of feeling secure I still feel so anxious.”
The unhealthy money behaviors of the Money Vigilant:
Excessively stressed or anxious about money
Struggles with enjoying their money
Hoards or accumulates wealth out of fear
Simple ways the Money Vigilant can overcome their limiting beliefs:
Enjoy your hard-earned money! Include your “wants” in your monthly budget. Just make sure to set aside money for your needs and savings first so you don’t feel anxious about spending on your wants.
Reduce financial stress by consulting a financial planner. Having a financial plan can ensure your financial security and, at the same time, balance out your goals and needs. Contact us if you’d like to avail our financial planning services.
Do you resonate with any of these money beliefs? Take the Klontz Money Script Inventory here and find out if you’re a Money Avoider, Money Worshipper, Money Status Seeker, or Money Vigilant. These limiting beliefs are roadblocks to your financial success. The first step to clearing the road ahead is to uncover these unconscious beliefs so that you can make the necessary changes that will ultimately influence the trajectory of your life (for the better).
