For most of us, our feelings about money and wealth are developed in childhood. Researchers have identified four “money scripts” that have a significant impact on our financial situation as adults.
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.
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.
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?