Being “good” with money is simple in theory. Most of us know that we need to spend less, save more, and do a better job of planning our finances. The real question is: How do we actually get ourselves to do those things, and what makes it so hard?
Enter “money scripts,” also known as “money stories,” a concept that’s been tossed around by psychologists and educators for years and has more recently edged into mainstream financial planning. Broadly defined, money scripts are “what you learned about money from your upbringing, how you responded or rebelled, and what your current money dynamics and patterns are,” says Bari Tessler, a financial therapist and author of The Art of Money. According to some researchers, money scripts can be distilled into specific categories, such as “money vigilance” (being overly watchful and paranoid about money), “money status” (equating one’s self-worth with money), “money worship” (a belief that money will solve all your problems) and “money avoidance” (feeling that money is bad). Of course, there’s even a diagnostic quiz.
You may not be aware of your own money story — or it might not fall into a tidy category — and that’s normal too. Ramit Sethi, the author of I Will Teach You to Be Rich, says these “invisible scripts” are “so deeply embedded in us that we don’t even realize that they guide our attitude or behaviors.” Left lurking in your subconscious, he adds, “they can become psychological traps that hold us back.”
To be clear, identifying your money script won’t magically solve your financial problems, especially ones that are out of your control. But the process of self-examination will help you notice your behaviors, look at what’s behind them, and — theoretically — recognize and change the ones that aren’t working. As Tessler puts it: “Awareness leads to understanding, and that allows us to dismantle and replace the habits we don’t like.”
There’s also plenty of research showing that certain early life experiences do correlate with destructive financial choices as an adult, and that they can be overcome with specific therapeutic techniques. In one British study, subjects who’d been raised in households that were secretive about spending were more likely to have compulsive money habits, like hoarding, when they grew up. Another study found that childhood trauma (financial or otherwise) often had a deleterious effect on subjects’ financial decision-making later in life.
On the upside, psychologists have also found that certain types of therapy can help people overcome negative financial habits ranging from the very serious (like compulsive overspending, gambling, or hoarding) to the more garden-variety (avoiding bills). And those therapeutic techniques are very similar to the process of exploring your money script: You look at the underpinnings of your negative patterns, interrupt them with attention and practice, and then replace them with new and better coping mechanisms. In a nutshell, putting some elbow grease into figuring out your money story will probably help you improve your finances at least a little, if not a lot.
To do so, you’ll need writing materials, a willingness to analyze your personal history and finances, and some patience with yourself. Eugenié George, a financial educator and the author of Our Money Stories, likes to tackle her clients’ money beliefs in three phases. “The first part is all about your emotions,” she says. “Do a deep dive into your memories about money — how it’s shaped your life, what frustrates you, what stresses you out, and what you want to change. Do stream-of-consciousness journaling. Cry it out. Talk to a therapist if you need more help.” (Tessler has a list of journaling prompts, such as “What did your parents, grandparents, siblings, church, or community teach you about money?,” that may be helpful during this initial period.)
Once you’ve gotten a better handle on your financial demons, it’s time to look at your numbers. “It’s all well and good to understand your feelings about your money, but if you can’t ground them in your reality, they won’t amount to much,” says George. She recommends printing out your bank statements and going over each line, as tedious as it sounds. “Look at what you’re spending on and see if it matches up with what you value,” she says. “This is usually when you’re like, Oh, I spend $150 at Rite Aid regularly and I don’t even know why. But I wish I had that money to spend on things I actually want.” It’s also the part where you have to be honest with yourself. Perhaps you will come to the painful realization that, say, your compulsive lying about money is rooted in your parents’ multiple bankruptcies; the bad news is that you’re still a compulsive liar, but the good news is that you’re one step closer to confronting it.
The third and final step is about making a larger plan to organize your money in the future now that you know specifically what you want to change. This involves looking comprehensively at what you own (including your savings, investments, and other assets, like a car or a home), what you owe (any debt), and what your credit score is. You’ll also establish a regular practice — maybe weekly, or twice a month — of checking all your numbers to evaluate your progress, either on your own or with someone you trust. Both Tessler and George call these “money dates” and recommend that you gussy them up to make them as appealing as possible: light candles, put on nice music, etc. (I usually do this on Friday afternoons when I’m sick of doing actual work, but it’s not the weekend just yet. It’s amazing how a boring task gets more appealing when you use it to procrastinate on something else.)
Meanwhile, seek out a sort of money mentor or accountability partner who will understand your money story and keep you honest in your efforts to move forward. Depending on what kind of help you need, this could be an actual financial adviser, a financial therapist, or an accountant; it could also just be a friend who’s good with money and will give you smart advice.
Then, repeat. “Understanding your money story, and rewriting the things you want to change, is a lifelong process of gathering information, applying it to the practical aspects of money, and then gathering more information,” says Tessler. She recommends that you pay special attention to how you’re feeling, physically, when you make daily financial decisions (another common CBT technique). Are you sweaty, dizzy, exhausted, rushed? “Most people aren’t even conscious of the stories they’re telling themselves about money, but if you take the time to pause before you buy something, and breathe, and see how you’re feeling, it gives you more insight into what’s driving your choice and whether it’s being driven by a narrative that you no longer want to follow,” she explains.
My friend Arianna, who characterizes herself as having an “anxious-avoidant” relationship with money that leads her to procrastinate on paying bills and shun her bank balance, says that confronting her own money story helped her get past some of the sheer panic she used to feel when she opened her credit-card statement (made worse by the fact that she would sometimes ignore it for months). “After my parents got divorced, money was a very tense subject. My dad was always sending us random gifts even though our mom could barely afford to buy us new shoes,” she tells me. “I think it was my dad’s way of trying to show that he cared about us. But all it did was highlight his absence and make my mom frustrated.”
As a result, Arianna used to seesaw between extreme budgeting and splurges. Once she traced that cycle back to how she grew up, she was able to keep it in check a little more; she gives herself a monthly “allowance” for “fun” purchases so that she doesn’t feel deprived but doesn’t overdo it either. “I used to feel like there was something wrong with me, but now I realize this is just something I need to keep working on,” she says.
Letting yourself off the hook for your past and inevitable future screwups is an important part of the process, says Tessler. Sure, it sucks to examine your own mistakes (and your parents’ mistakes, and society’s mistakes, and so on), but it’s much easier if you don’t agonize over them or use them as a permanent excuse for why you can never get a break. “You unravel a pattern by watching it, bringing attention to it, and then noticing the moment before you fall into the hole,” she explains. “You may still fall in, but the next time you’re back there, you’ve learned something new about it.”
Email your money conundrums to mytwocents@nymag.com (and read our submission terms here.)
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