Most discussions about personal finance focus on cutting back, saving and planning ahead.
Not many address attitudes and the emotional relationship people have with money.
According to Dr. Brad Klontz, a clinical psychologist and financial planner who wrote the book “Mind Over Money,” financial mental anguish and self-destructive behavior affect the ability to effectively manage money more than outside economic factors.
Klontz says it’s a reflection of four “money scripts” we tell ourselves can hurt our relationship with money. A healthy attitude about money has a foundation in flexibility, he added.
Here are the four money scripts Klontz identified in his book. Which ones have been holding you back from achieving your financial goals?
Money avoidance: A deep belief that you don’t deserve money or that money is bad, and you’re a bad person if you want it. The feelings associated with money revolve around fear, anxiety or even disgust. People are torn between wanting more money in their lives and self-sabotaging their success because they believe money corrupts or is the root of all evil. They hold themselves back from growing wealth because they believe it keeps them honest, grounded and real.
Money worship: This is where money is the silver bullet to every problem. It’s the “if I could just win the lottery, my life would be amazing” assumption. Klontz said people with this attitude tend to carry revolving debt. For many people, money worship stems from growing up in an extremely frugal environment.
Money status: This one means that our self-worth is directly tied to our bank balances and investment portfolios. No money means no status. Money priorities are more focused on self image than prudent and strategic decisions. For example, did you choose your care or neighborhood because it’s practical or fits your lifestyle, or did you choose it for status?
Money vigilance: These are the people who watch every dollar, have solid savings and retirement budgets, but it’s never enough. They always worry that they are on the verge of going broke. There’s a lot of anxiety and guilt about actually spending their money. They are financially secure but are unable to enjoy their money.
Self-destructive financial behaviors aren’t driven by rational, thinking minds, Klontz stressed. They stem from subconscious beliefs usually developed in childhood. The key to overcoming them is to openly and honestly explore your relationship with money. That’s the most important step, he said.