Hacking Ingrained Money Scripts
A few weeks back, someone recommended the podcast Bad With Money to us here at Frugasaurus HQ, and I have been checking out the content. Having bought an electric bike, I suddenly have a lot less time to listen to podcasts on my commute, so I am building up quite the backlog!
But I was listening to the podcast, and one financial health psychologist mentioned a phrase I had never heard before:
Specifically that there are two types of money scripts in particular: Poor money scripts and rich money scripts. As I listened to him, I realised that some of the things I do in order to “trick” my mind are actually an attempt at working around ingrained poor money scripts.
If you grew up on the less affluent side of the tracks, changing your money scripts can be one of the most difficult things to undertake.
What are money scripts?
- If I don’t spend money now, it will just disappear (causing the person to spend their money)
- Money is bad/rich people are corrupt (causing the person to avoid accumulating wealth)
- We only live once (causing the person to just spend what they have without preparing for the future)
And so on.
These money scripts are taught to us as children, and it can be very difficult to identify their presence or realise that they might lead to self-destructive/self-fulfilling behaviours.
In my opinion, the most problematic thing about money scripts is being unaware which money scripts we carry, and how to deal with them accordingly if their natural state is to keep us from reaching our goals.
The opposite end of that is, of course, the rich money scripts. These scripts help the rich stay rich, encourage them to invest and grow the majority of their money, rather than spend it.
I don’t have any money
For as long as I can remember, my default money script has been that I do not have much money. Luckily for me though, that attitude also came with a healthy dose of frugality and priorities from my money savvy father.
When my student loan hit, first would be the rent, electricity and phone bill. The bus pass was a priority as well, I was not as good with grabbing the bike then. Then I would look at my checking account and put whatever round number was above about $250 into my savings account.
What I tried to do was to trick myself into believing that I only had the money in the checking account at my disposal. The savings account was for emergencies, or expenses out of the ordinary, such as tickets to visit family for the holidays, or “unexpected” expenses.
I did dip into the savings account more than I should have, and it never grew very large, but it was an added safety net for someone who rarely had more than about $2500 at any one time. As far as I can tell, this kind of spending pattern is called artificial scarcity, and I still employ it today, even as I am trying to increase how much I am comfortable storing in my checking account to closer to $500. I keep an app on my phone to track my spending as well, but only for my checking account. When that thing starts to inch towards zero, I do my best to make do with what I have until the next paycheck comes along.
The rest is “hidden” away in savings accounts, mortgage savings accounts and investments which are harder to get at, in an attempt to protect me from myself. Because deep in my frugal core, I still carry a piece of a belief that “if I keep money in my account, I will spend it”. In a very similar way, I would try to avoid keeping too much snacks in the house, because I would just eat it (still guilty, though we try to work on it!).
A part of me is struggling with the idea of having money, and so I move the money away in an attempt to ease the anxiety, and tell myself it’s because “interest is better there” or some such thing.
But that is not the entire truth. I am simply not used to having money, and in our attempt to approach financial independence, I am moving outside an old, ingrained money script, and it is making me uncomfortable. Instead, I look for the familiar in an almost empty checking account, wilfully ignoring my other accounts.
What can you do if you feel like old habits are holding you back?
Well, the first thing is always to take a long, hard look at yourself and identify what your money scripts might be. “Money is evil” is quite a different beast from “I just don’t have any money” or “It will all work itself out”.
If you don’t know what you are dealing with, how can you possibly try to address it?
Do you have issues related to money which can be traced back to how money was treated when you grew up? Have you developed coping mechanisms in order to deal with them, or do you feel stuck in the habit?
Harmful money scripts can wreck havoc on people’s personal lives, but they don’t have to continue to do so!
I would love to hear about how other people have managed or try to break free from ingrained money scripts. Please share!