The Four Money Patterns
I was reading one of my favourite personal finance blogs the other day, and came across a fascinating article about the money patterns, or scripts, based on a recent research into financial behaviour of 422 participants done by B. Klontz and S. Britt.
The four money scripts are unconscious core beliefs about money which drive financial behaviour throughout life: money avoidance, worship, status (all three of which are often associated with lower net worth and higher amounts of revolving credit) and vigilance.
These individuals believe that money is bad or that they don’t deserve money. It’s often seen as a source of anxiety, negativity and fear. They often believe that wealthy people are greedy, unethical and corrupt, and that there is virtue in living with less money. An example of such behaviour could be putting off checking your bank balances, ignoring the bills and trying to forget about the current financial situation.
These people are convinced that money brings happiness and power, and is the solution to all of their problems. They also believe that a person can never have ENOUGH money, and they feel that they will never be able to afford absolutely everything they want in life. This can often result in chronic overspending in an attempt to buy happiness. Perhaps, retail therapy to improve the buyer’s mood could be a great example of money worshipping.
People see their net worth and self-worth as being synonymous and often pretend to have more money than they do. As a result, they may be at higher risk of overspending – in an effort to give people around them the impression that they are financially successful. For them, owning the newest and best things confers status – a good example could be getting a loan to buy the latest iPhone model.
Financially vigilant individuals consider saving to be a very important part of financial well-being and like being careful with their money. They don’t need to know how much money others have, and don’t care about impressing others by showing them how financially successful they are. Although such people tend to be more financially healthy in general, the researchers point out that excessive wariness could keep someone from enjoying the benefits and sense of security that money can provide.
It’s important to note that many people hold a number of these patterns, which can be seen as a reflection of the complex factor that drive people’s financial behaviour and every day decision-making. Money scripts can also be challenged and changed to promote financial health.
Sources: Squared Away Blog, Sorted.