April is Financial Literacy Month, a time to focus on building strong financial habits that set you up for long-term success. For Week 5, we’re exploring a topic that underlies everything we’ve talked about this month: your relationship with money.
You can learn how to budget, save, manage debt, and protect your assets — but if you don’t understand why you make certain money decisions, progress can feel like a constant uphill climb. That’s where financial psychology comes in.
Financial psychology is the study of how our emotions, upbringing, personality, and experiences influence the way we think about, manage, and interact with money. It helps us understand our habits, identify unhelpful patterns, and rewrite the beliefs that may be holding us back.
What Is Your Money Story?
Every person has a unique financial background — a story shaped by what we saw, heard, and experienced growing up. Did your family openly discuss money? Was it a source of stress or shame? Were you taught to save, or encouraged to spend? These early lessons often become the foundation of our financial mindset as adults.
This story becomes internalized in what psychologists call “money scripts,” or subconscious beliefs that guide our financial behavior. Examples include:
- “Money is the root of all evil.”
- “More money will make me happier.”
- “I’m just not good with money.”
- “You can’t trust people with money.”
Recognizing these beliefs is the first step to challenging and changing them.
Every person has a unique financial background — a story shaped by what we saw, heard, and experienced growing up.
Four Common Money Script Categories
Researchers have identified four core money script categories:
- Money Avoidance: Believing that money is bad or undeserved. May lead to under-earning, overspending, or avoiding financial planning altogether.
- Money Worship: Believing that more money will solve all problems. May result in compulsive spending or workaholism.
- Money Status: Tying self-worth to net worth. Often leads to overspending to appear successful.
- Money Vigilance: Cautious and alert about finances. While generally positive, it can lead to excessive fear of spending or difficulty enjoying money.
Understanding your dominant money script can help you break unhealthy cycles and build healthier financial habits.
Changing Your Financial Behavior Starts with Awareness
Here are a few ways to start:
- Reflect on Your Financial Past: Think about your earliest money memories. What messages did you receive?
- Identify Your Money Script: Which beliefs or fears seem to drive your financial decisions today?
- Practice Self-Compassion: Changing behavior takes time. Be patient with yourself as you build new habits.
- Talk About It: Whether with a financial professional, therapist, or loved one, opening up about money can reduce shame and improve your outcomes.
Understanding your dominant money script can help you break unhealthy cycles and build healthier financial habits.
Knowledge + Mindset = Real Change
This Financial Literacy Month, we’ve covered the building blocks of financial health — budgeting, saving, debt, and protection. But true transformation comes when you also address your mindset. Your beliefs about money affect every financial decision you make. By understanding your financial psychology, you unlock the power to change your future.
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Learn more about financial protection and other Financial Literacy Month topics at Real Secrets of Money™. Visit our blog for more insights and connect with a financial literacy teacher to start your journey to financial well-being today.
