“If you ever find yourself in the wrong story, LEAVE.”
A “money story” or “money script” is a belief about money that guides a person’s financial behaviours.
These are the stories that children learn from their own experiences with money, their parents’ money stories and their parent’s attitude towards money, as well as from other influences.
Whether or not you are aware of it, we all have money stories and they create the financial habits that we carry into adulthood. Good or bad, these stories and scripts play beneath the surface, subconsciously guiding our actions.
In his research at Kansas State University, Brad Klontz, PsyD, financial psychologist, and his team found a link between specific money scripts and lower incomes and net worth.
“Specifically, money avoidance scripts (e.g. ‘Money is unimportant,’ ‘Rich people are greedy’), money worship scripts (‘More money will make me happier’), and money status scripts (‘Your self-worth equals your net worth’) are all associated with poor financial outcomes,” he said.
So what does this mean for you?
A picture of a healthy relationship with money may include spending that reflects your values, being debt-free or having a plan to become debt-free, setting and achieving financial goals and having money to cover your expenses, even the unplanned ones.
If your relationship with money is not the picture of health it may be time to take a closer look at your own money story and do a little rewriting.
Changing money stories will take time and you have to be willing to dig a little (or a lot) and bare your financial soul. These stories can really have a negative impact on people and in some cases, they can be debilitating.
Should you feel this is too much for you to take on by yourself, seek professional help, give yourself a big pat on the back and congratulate yourself for taking the steps you need to in order to improve your relationship with money!
If you feel that this is something that you can do on your own, but you’re not really sure how to start rewriting your money story…here are 9 crucial steps to reshape your money story and improve your finances.
Identify your money story.
Write down all the negative money stories that you are telling yourself and living out. For example: “I’ll never get out of debt.” Or “I only get jobs with low pay.”
Understand where your story comes from.
By understanding that these stories are not yours, but are conditioned beliefs instilled by your parents and other influences, you can begin to separate yourself from them and create your own story.
Find proof that your current money story is not accurate.
Begin by seeking out at least 3 experiences or pieces of evidence that disprove each story you’re telling yourself.
Your self-worth does not equal your net worth.
Your net worth is the value of your assets minus your liabilities. It does not reflect who you are as a person.
Create a new money story and live it.
What is your ideal money story. What purposeful actions can you take to help you live it?
Start with baby-step changes and commit to one at a time.
Change is difficult but if you choose and commit to small changes, you will increase your chances of creating new financial habits and achieving your goals.
Be willing to forgive yourself.
The will be bumps along the road to changing your money story but that doesn’t mean that it isn’t possible. You have to realize that even with a new money story, life is not perfect and you have to be able to forgive yourself if some things don’t go as planned. If you fall, get up, dust yourself off and keep moving forward.
Visualize your habits.
Have a means to “see” what your money habits are and what your plan is. This could be a spreadsheet on your computer or it could be an app or it could be something as easy as using a pencil and paper. The idea is to be able to visualize what you are doing instead of leaving it as a vague thought in your mind.
If you don’t understand the basics of money management, it can keep you from changing your mindset and rewriting your money story. Being afraid to invest in yourself (time, money, or both) will keep you from moving forward. The more educated you are about personal finance, the more confident you will be to try to improve your situation. Read books, listen to podcasts, invest in a coach. Do whatever it takes to get you on the right path.
Your money story is the driver of your financial behaviours and negative ones can block you from achieving financial wellness and success (whatever success may look like to you).
Take the time to reflect on your stories and ask yourself if they are serving your best interest if they aren't, what are you going to do to change it?