Back when you were a little kid, you probably didn’t give much thought to anything financial. Your parents likely provided everything for you. Yet as children grow older, they start noticing the way their parents handle money and how it affects family life. As these lessons accumulate, we settle on beliefs and attitudes about money that we carry into adult life.
In a study published by the Journal of Financial Therapy, researchers identified four different “money scripts,” or attitudes that people form about money as they mature. Depending on which of these scripts you follow, your unconscious biases about money can have a negative impact on your financial health. Take a look and see if you fall into one of the following categories.
Many kids grow up learning that money is just one of those things you don’t bring up. According to the Klontz Money Script Inventory, 40% of survey respondents said it was okay for spouses to not share financial information with each other. This kind of attitude is known as money vigilance: a belief that it’s unnecessary or inappropriate to have conversations with others about money.
But talking about money can actually be a good thing. Imagine never sharing your thoughts on income or budgeting with anyone. How would you tell if you were making good financial decisions? If you see patterns of money vigilance in your own thinking, try starting a basic conversation about money with someone whose expertise—and discretion—you trust.
Surprisingly, some people struggle with an aversion to having too much money. Were your parents were the type who would say, “There are starving people out there, so you better finish what’s on your plate”? Hearing too much of that messaging may have led you to believe that you aren’t entitled to a comfortable life.
People who align with money avoidance believe that no one deserves to have money so long as others have less. If you grew up in a household that didn’t have much money to go around, you might believe that having more than enough is bad. While this might seem like a charitable attitude, it’s difficult to make good financial choices for yourself when you equate wealth with moral guilt.
Having a lot of money doesn’t mean that you have to spend it in wasteful ways. Consider billionaire investor Warren Buffett: for 50 years, Buffett has lived in the same house and worked out of the same 25-person office. He’s also given away over 70% of his $65 billion net worth to philanthropic causes. Such world-changing generosity wouldn’t be possible without his financial success.
Growing up in a frugal home doesn’t always translate to becoming frugal yourself. In fact, some people who grow up in a family with few material comforts end up concluding that a lack of money is the main source of their parents’ problems. This translates into money worship: the belief that having more money always makes life better.
But wealth doesn’t actually correlate with greater happiness. Once individuals exceed an annual income of $75,000, they see diminishing returns on emotional well-being. Millennials today are earning more than young adult households did in the past 50 years, according to the Pew Research Center—yet few would describe them as a generation defined by financial optimism.
If you find yourself resisting a frugal lifestyle, ask yourself why. List out your money goals on a sheet of paper and identify how you measure against those goals. You might be able to rein in your tendencies to spend and refocus your energy on perfecting your saving habits.
Do you regularly feel a need to “treat yourself”? Parents who handed you everything you asked for may have led you to develop feelings of entitlement. If this pattern describes you, you might fall into the money status belief pattern.
There’s no question that money can elevate your profile. Social media makes it easy to find like-minded users who believe that net-worth is self-worth. Instagram shots of influencers flashing the latest brands or vacationing in exotic places draw millions of eyeballs each day.
But while technology delivers such images to us in novel ways, the attitude itself is nothing new. Did you ever obsess over getting the latest toy as a kid? Did you feel bad about yourself if you didn’t keep up with the clothes or shoes popular kids had?
Think of occasions when you sprang for that unreasonably big purchase. How long did it keep you happy? Is it still contributing to your happiness? If you took on debt to buy it, have you paid it off yet? Reflecting on the ineffectiveness of bad habits makes it easier to set them aside.
Understanding your childhood experiences with money can help you identify the financial attitudes you take as an adult. Once you see your challenge, it’s easier to come up with a relevant solution.
This doesn’t mean you have to start building elaborate spreadsheets or commit to an intense savings plan. It actually means adjusting your perspective on money matters and seeing what follows. Whether you grew up hating money or loving it, recognize that cash itself is neither bad nor good. It just is. What matters is how you choose to use it in your life.