Childhood Money Baggage

The secret to better money management is understanding your money scripts


Think back to your childhood for a moment . . . what is your very first memory involving money?

The tooth fairy?

Working for an allowance?

Your parents arguing about it?

My own money memories involve extreme couponing and the lure of forbidden fast food cheese. . . (more on that later). All of which went on to embed a money vigilance script in my mind that would affect the rest of my financial life.

Did you know that your money memories highly influence your financial success or struggles? In fact, many experts believe our habits and views surrounding money were formed as children watching our parents and other adults with it. In addition, we are all subconsciously passing on new money scripts, influencing the next generation’s behaviors towards money.

Money scripts are deeply embedded views we have about money, solidified in our subconscious by the time we are only five or six years old.

According to financial planner and author Tim Maurer, it is “our underlying values and goals that drive our behavior with money, which ultimately determines our satisfaction in work and life.”

It turns out, our behavior with money determines our success, not the rare home run of a Bill Gates or Michael Jordan.

Research professor Brad Klontz says there are four basic attitudes towards money (or money scripts):

Money avoidance:

Money is viewed as a source of anxiety, and living with less of it is to be admired. Common pitfalls include having issues with money not “earned” (inheritance) or believing that rich people are somehow evil.

Money worship:

Based on the idea that money will solve all of life’s problems. People in this category also believe they can never have enough money, which makes them prone to compulsive spending, carrying credit card debt, and over working to make more money.

Money status:

Belief that money leads to your success or status in life. They’re the most susceptible to debt because they are always trying to prove their success with more possessions, which causes them to overspend and live beyond their means, often hiding this from others.

Money vigilance:

The most positive of the scripts, although it can be taken to the extreme. People with this script obsessively research all purchases to make sure they’re getting the best deal or tend to feel guilty about spending their money. On the positive side, they have far better habits concerning money. On the other hand, these obsessive savers often need to be reminded that “you can’t take it with you,” and responsible spending is okay.

Typically for most people, there is one area that more prominent than others. However, the scripts can overlap. For example, you can have a correlation between people who are money avoiding and money worshippers.

As Klontz says, “we have simultaneously conflicting beliefs around money. You may want the very thing you think you despise.”

Growing up, my money scripts told me that we were poor. Which was bizarre since we lived in one of the most upscale neighborhoods in Houston and my grandfather was CEO of a Fortune 500 company. It wasn’t until AFTER college I realized what side of the tracks we were on.

Later in life, I realized we were not struggling through financial hard times – my parents were just instilling values in me that had been handed down to them by their own Depression-era parents. They were teaching me to be vigilant with my money – even if you have money, don’t act like it.

I thought we were poor because of the coupon clipping behaviors and money mindset of our mom. I have memories of secretly placing money from my piggy bank in her purse at night to help get us through this make-believe financial rough patch. In reality, there were no tough times. My dad had a stable job with an upper tax bracket income and my grandparents generously supplemented our lifestyle.

One of my mom’s money scripts behavior manifested itself in her stance on cheese. Dinner outside the home – especially fast food -- was a rarity. We were told it was expensive and my mom really was a great cook. A special treat was the Wendy’s drive through, and my brother and I would be ecstatic if this was our dinner fate for the night.

Our excitement was tempered by not being allowed to eat in the car or order cheese for our burgers. Cheese cost ten cents more and since we had cheese at home that could be sliced and melted on the burgers, why be wasteful and spend the money? If we wanted a cheeseburger, we had to wait until we got home, sliced and melted the cheese ourselves.

Although I thought it was strange at the time, I am thankful that my mom took this hard stance on cheese. Think of all the fattening calories I didn’t consume!

In all seriousness, my mom ingrained in me a valuable lesson about not spending money on unnecessary things, even if it is a small amount. I can’t look at a menu today without noticing the markup for the slice of cheese. And, now the cheese is an extra $1 or even $1.50! That is a money script, a small one, but one that is hard wired into my psyche.

Recognizing your own money script is important and helpful in shaping your financial future. What scripts do you have that lead to positive or negative behaviors? Are some of them extreme? Do you drive your loved ones’ nuts? How have your scripts helped or hurt you?

Even if you didn’t grow up being taught money vigilance, you can change your behaviors and model positive ones for your kids.

First of all, recognize it. Are you living a money worshipping lifestyle? For example, do you have a high income but continue to rack up credit card debt, always in pursuit of “keeping up with the Joneses?” Once you realize your subconscious views about money, you can make changes and stop unhealthy patterns.

  • Show appreciation for money by taking care of your possessions.
  • Just because you have the money, doesn’t mean you have to use it to buy things. “Just because I can afford to buy my kid a new Audi, I’m not going to do it.”
  • Wait until you have the money before you buy something. Once you have the money, in cash, see if you still want it. Sometimes it loses its allure.
  • Take a hard line on extras like cheese! I’m only partially kidding here. . . it’s actually very important that you don’t fritter your money away a dollar here and a dollar there

Looking back at your childhood and thinking about your views and behavior towards money, which one do you think you are? How can you use this knowledge to make better financial decisions? Are there things you can do to promote positive money scripts in your own children?

Think back to your childhood for a moment . . . what is your very first memory involving money? It turns out, our behavior with money determines our success.

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