What's Your Money Personality?

Your money scripts — or your unconscious core beliefs about money — are the driving factors behind how you handle your money throughout life, according to a recent study published in the Journal of Financial Planning.

Money scripts are established at a young age, passed down from generation to generation, and can sometimes be developed in response to a personal loss or trauma.

The researchers describe 4 categories of money scripts, 3 of which are associated with poor financial health.

• Money Avoidance: You believe money is bad and rich people are greedy. The wealthy just don’t deserve to be wealthy. According to the study authors, “younger, non-married individuals with lower levels of education, income, and net worth were more likely to identify with the money avoidance scripts.”
• Money Worship: You’re convinced that more money will solve all your problems, but there will never be enough of it. You believe that money brings power and happiness to those who possess it. According to the researchers, “money worshipers are also likely to revolve credit from month to month.”
• Money Status: You think net worth equals self-worth. It is extremely important for you to own the newest and best things available. According to the researchers, “individuals identifying with the money status scripts tended to be younger and non-married with lower levels of education, income, and a lower socioeconomic status in childhood.”

These 3 thoughts, feelings and opinions about money are associated with poorer financial health, lower net worth, and lower income.

On the other hand, 1 money script tends to produce the most wealth over time for those who identify with it.

• Money Vigilance: You are frugal, find saving your money important, and are discreet about how much money you make. You always make sure you have money saved up in case of an emergency.

Once you’re able to identify your money personality, you will be better equipped to change your bad financial habits and patterns. According to the researchers, when people recognize that their beliefs are deep-seated and may have a negative impact on their financial happiness, they have a better chance of challenging those scripts and creating more “accurate and functional” beliefs moving forward.

“Recognizing why you are doing what you’re doing is strongly correlated with changing it,” said Tom Murphy, certified financial planner and CEO of Murphy and Sylvest, an investment advisory firm in Dallas, Texas. “Lots of times, once people understand their money personality, how they deal with money, they can actually go in and change their behavior.”

So, what’s your money personality, and what are you going to do about it?