MONEY SCRIPTS: Fundamental Subconscious Beliefs and Economic Behavioral Patterns Defined

Posted on April 4, 2025 by Dr. David Edward Marcinko MBA MEd CMP™

SALES PSYCHOLOGY FOR INVESTMENT ADVISORS, FINANCIAL ADVISORS, INSURANCE AGENTS, WEALTH MANAGERS AND FINANCIAL PLANNERS

By Dr. David Edward Marcinko; MBA MEd CMP®

http://www.MarcinkoAssociates.com

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SPONSOR: http://www.CertifiedMedicalPlanner.org

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Stocks were decimated yesterday in the first full trading day following President Trump’s tariff announcement. It was the biggest single-day decline since the start of the Covid-19 pandemic in March 2020. Every Magnificent Seven stock was battered—Apple worst of all. And so perhaps it is a good time to discuss the concept of “Money Scripts”.

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Money Scripts are unconscious beliefs about money that are typically only partially true, are developed in childhood, and drive adult financial behaviors. Money scripts may be the result of “financial flashpoints,” which are salient early experiences around money that have a lasting impact in adulthood. Money scripts are often passed down through the generations and social groups often share similar money scripts. And so, we argue that Money scripts are at the root of all illogical, ill-advised, self-destructive, or self-limiting financial behaviors.

In research at Kansas State University [KSU], researchers identified four distinct Money script patterns, which are associated with financial health and predict financial behaviors. These include: (a) money avoidance, (b) money worship, (c) money status, and (d) money vigilance [personal communication Brad Klontz, PsyD, CFP®, Kenneth Shubin-Stein, MD, MPH, MS, CFA and Sonya Britt, PhD, CFP®].

And so, we all like to think our financial decisions are fully rational, but the truth is that our subconscious beliefs have a dramatic impact on our money and financial decisions. These money scripts are important to know and understand. A summary is below:

            Money Avoidance

Money avoidance scripts are illustrated by beliefs such as “Rich people are greedy,” “It is not okay to have more than you need,” and “I do not deserve a lot of money when others have less than me.” Money avoiders believe that money is bad or that they do not deserve money. They believe that wealthy people are corrupt and there is virtue in living with less money. They may sabotage their financial success or give money away even though they cannot afford to do so. Money avoidance scripts may be associated with lower income and lower net worth and predict financial behaviors including ignoring bank statements, overspending, financial dependence on others, financial enabling of others, and having trouble sticking to a budget.

            Money Worship 

Money worship is typified by beliefs such as “More money will make you happier,” “You can never have enough money,” and “Money would solve all my problems.” Money worshipers are convinced that money is the key to happiness. At the same time, they believe that one can never have enough. Money worships have lower income, lower net worth, and higher credit card debt. They are more likely to be hoarders, spend compulsively, and put work ahead of family.

            Money Status

Money status scripts include “I will not buy something unless it is new,” “Your self-worth equals you net worth,” and “If something isn’t considered the ‘best’ it is not worth buying.” Money status seekers see net worth and self-worth as being synonymous. They pretend to have more money than they do and tend to overspend as a result. They often grew up in poorer families and believe that the universe should take care of their financial needs if they live a virtuous life. Money status scripts are associated with compulsive gambling, overspending, being financially dependent on others, and lying to one’s spouse about spending.

            Money Vigilance

Money vigilant beliefs include “It is important to save for a rainy day,” “You should always look for the best deal, even if it takes more time,” and “I would be a nervous wreck if I did not have an emergency fund.” The money vigilants are alert, watchful and concerned about their financial welfare. They are more likely to save and less likely to buy on credit. As a result, they tend to have higher income and higher net worth. They also have a tendency to be anxious about money and are secretive about their financial status outside of their household. While money vigilance is associated with frugality and saving, excessive anxiety can keep someone from enjoying the benefits that money can provide.

Identification

When money scripts are identified, it is helpful to examine where they came from. A simple behavioral finance technique involves reflecting on the following questions:

  • What three lessons did you learn about money from your mother?
  • What three lessons did you learn about money from your father?
  • What is your first memory around money?
  • What is your most painful money memory?
  • What is your most joyful money memory?
  • What money scripts emerged for you from this experience?
  • How have they helped you?
  • How have they hurt you?
  • What money scripts do you need to change?

Conclusion

Ideally, from a balanced middle ground, we can see past the limitations of money scripts, our self and others who are polarized. Those who believe “Money is meant to be spent” or “Money is meant to be saved” have a world view that results in extreme positions. Labeling them as “correct” or “wrong” is not a useful way to try to shift anyone’s polarized money script beliefs.

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A Brief Historical Review of Behavioral Finance and Economics

Posted on March 28, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Related Influential Thought-Leaders

  • Dr. Brad Klontz CSAC CFP®
  • Dr. Ted Klontz PsyD
  • Dr. Eugene Schmuckler MBA MEd CTS
  • Dr. Kenneth Shubin-Stein FACP CFA
  • Dr. David Edward Marcinko MEd MBA CMP™

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doctor

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James O. Prochaska PhD, Professor of Psychology and Director of the Cancer Prevention Research Center at the University of Rhode Island, developed the Trans-Theoretic Model of Behavior Change [TTM] which has been evolving since in 1977. Nominated as one of the five most influential authors in Psychology, by the Institute for Scientific Information and the American Psychological Society, Dr. Prochaska is author of more than 300 papers on behavior change for health promotion and disease prevention.

TTM Stages of Change

In his Trans-Theoretical Model, behavior change is a “process involving progress through a series of these stages:

  • Pre-Contemplation (Not Ready) – “People are not intending to take action in the foreseeable future, and can be unaware that their behavior is problematic”
  • Contemplation (Getting Ready) – “People are beginning to recognize that their behavior is problematic, and start to look at the pros and cons of their continued actions”
  • Preparation (Ready) – “People are intending to take action in the immediate future, and may begin taking small steps toward behavior change”
  • Action – “People have made specific overt modifications in changing their problem behavior or in acquiring new healthy behaviors”
  • Maintenance – “People have been able to sustain action for a while and are working to prevent relapse”
  • Termination – “Individuals have zero temptation and they are sure they will not return to their old unhealthy habit as a way of coping”

Relapse

In addition, researchers conceptualized “relapse” (recycling) which is not a stage in itself but rather the “return from Action or Maintenance to an earlier stage.” In medical care, these stages of behavior change have applicability to anti-hypertension and lipid lowering medication use, as well as depression prevention, weight control and smoking cessation.

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Psychology

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Uniting Psychology and Financial Behavior

More recently, validating the emerging alliance between psychology (human behavior) and finance (economics) are two Americans who won the Royal Swedish Academy of Science’s 2002 Nobel Memorial Prize in Economic Science. Their research was nothing short of an explanation for the idiosyncrasies incumbent in human financial decision-making outcomes.

Enter Kahneman and Smith

Daniel Kahneman, PhD, professor of psychology at Princeton University, and Vernon L. Smith, PhD, professor of economics at George Mason University in Fairfax, Va., shared the prize for work that provided insight on everything from stock market bubbles, to regulating utilities, and countless other economic activities. In several cases, the winners tried to explain apparent financial paradoxes.

For example, Professor Kahneman made the economically puzzling discovery that most of his subjects would make a 20-minute trip to buy a calculator for $10 instead of $15, but would not make the same trip to buy a jacket for $120 instead of $125, saving the same $5.

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in vitro and in-vivo Economics

Initially, in the 1960’s, Smith set out to demonstrate how economic theory worked in the laboratory (in vitro), while Kahneman was more interested in the ways economic theory mis-predicted people in real-life (in-vivo). He tested the limits of standard economic choice theory in predicting the actions of real people, and his work formalized laboratory techniques for studying economic decision making, with a focus on trading and bargaining.

Later, Smith and Kahneman together were among the first economists to make experimental data a cornerstone of academic output. Their studies included people playing games of cooperation and trust, and simulating different types of markets in a laboratory setting. Their theories assumed that individuals make decisions systematically, based on preferences and available information, in a way that changes little over time, or in different contexts.

University of Chicago

By the late 1970’s, Richard H. Thaler, PhD, an economist at the University of Chicago also began to perform behavioral experiments further suggesting irrational wrinkles in standard financial theory and behavior, enhancing the still embryonic but increasingly popular theories of Kahneman and Smith.

Laboratory

Other economists’ laboratory experiments used ideas about competitive interactions pioneered by game theorists like John Forbes Nash Jr., PhD, who shared the Nobel in 1994, as points of reference.

Assessment

But, Kahneman and Smith often concentrated on cases where people’s actions departed from the systematic, rational strategies that Nash envisioned. Psychologically, this was all a precursor to the informal concept of life or holistic financial planning. Kahneman was awarded the Medal of Freedom, by President Barack Obama, on November 20, 2013.

READ: Behavioral Economics and Psychology DEM

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