A financial psychologist reveals the No. 1 lie we tell ourselves about our money problems

Shopping Tom Pennington/Getty ImagesOur attitudes about money are often passed down through generations.

Personal finance is just that — it’s
personal. It’s up to

to develop habits for spending and saving your money. Ultimately, it’s your actions that will determine your financial success, right?

Well, that’s what we tell ourselves anyway.

According to Brad Klontz, a financial psychologist, author, and cofounder of financial-consulting firm Your Mental Wealth, our core attitudes about money aren’t entirely of our own volition.

The No. 1 lie we tell ourselves about money is that our financial problems are the result of us being crazy, lazy, or stupid,” Klontz told Business Insider. “It’s actually totally predictable based on where you grew up and what you were taught.”

Klontz says the two biggest money problems the average American deals with are spending too much and saving too little.

“It’s really not that complicated. Save money, don’t spend more than you make. I have yet to find somebody who doesn’t know that,” Klontz said. “But I do believe that the majority of our financial problems are the result of our psychology.”

Through extensive research, Klontz has discovered that the catalyst for these problems is not our own capabilities, but rather our “money scripts” or “unconscious beliefs we have about money that drive all of our behaviour.” They’re often based on our parents’ attitudes and behaviours with money.

Klontz described two prominent money scripts based on his research:

  • Money worship: “More money will make you happier, there will never be enough money, or money will solve all of your problems.”
  • Money avoidance: “Rich people are greedy, money corrupts, good people shouldn’t care about money, or it’s not OK to have more than you need.”

After conducting nearly a dozen studies with thousands of people, Klontz concluded “that these beliefs are associated with [corresponding] financial outcomes, like lower income, lower net worth, bad financial behaviours” and are, in effect, the smoking gun.

To identify these scripts and overcome them, Klontz suggests asking yourself a few questions like:

• What are three things your mother taught you about money?

• What are three things your father taught you about money?

• What’s your earliest money memory?

• What’s your most painful money experience?

“All the sudden the light bulb will pop on for people as they realise that they’re just the next actor in this very often multi-generational pattern that’s been passed down,” Klontz said. Once we identify our money scripts and how they’re related to our financial problems, we can begin to disassemble our “erroneous” beliefs about money, he said, and reform our attitudes and behaviours.

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