Your money stories
Contents
Your relationship with money
“Money solves everything.”
You’ve probably heard friends and family say this from time to time. You may have uttered it yourself. But what does a statement like this really say about how we think about money?
Well, it says a lot. And it means plenty to a financial advisor in helping you improve your relationship with money.
How your financial advisor can uncover your money stories
Our beliefs about money, or ‘money stories’, are developed in childhood, as early as seven years of age. These beliefs stay with us and can determine how we relate to money as adults.
Money stories are the personal narratives that we hold about money and are shaped by experiences, upbringing, and cultural influences. These stories influence how we perceive, manage and relate to money and can impact our financial decisions and behaviours.
“I’m no good with money.”
“Rich people are greedy.”
“Save for a rainy day.”
“More stuff will make me happy.”
“There will never be enough.”
“There will always be enough.”
Ground-breaking financial psychologist Dr Brad Klontz has spent decades exploring and researching what these types of statements – what he coined ‘money scripts’ and we call money stories – said about a person’s money beliefs.
What his research found was that money stories can have a profound effect on our financial wellbeing, and are often passed on through the generations, reflecting Dr Klontz’s experience in his own family.
You can see why exploring an individual’s money stories is one of the first places a financial advisor should start when beginning a journey with a client.
Watch this interview with Money Script guru Dr Brad Klontz.
How do money stories form?
For a financial advisor, uncovering why and how your own money stories were formed can be a powerful way of understanding why you hold certain beliefs, and help identify if they are hindering or enhancing your relationship with money.
There’s a number of key influences that can shape your money stories:
Family
Our earliest money stories come from family. Observing parents’ financial habits growing up has a profound impact on our attitude towards saving, spending and investing. And if you delve deeper into your family tree, you’re likely to find these habits have been repeated throughout generations.
For example: A frugal family may instil a cautious approach to spending.
Cultural
Cultural attitudes towards money affect individual money stories, as different societies have varying views on wealth and financial success.
For example: Some cultures see wealth as a sign of success; others as inequality.
Personal
Life events shape our money stories. Financial hardships, windfalls and education influence all play a major role in forming our financial perspectives.
For example: Experiencing poverty may lead to valuing financial security highly.
Emotional
Money stories are deeply emotional. Feelings of fear, guilt, pride or shame can significantly impact financial decisions.
For example: Guilt about spending might lead to deprivation; pride in wealth might lead to lavish spending.
Behavioural
Money stories are a key factor in moulding our financial behaviours towards aspects like budgeting, investing and borrowing.
For example: Growing up with a scarcity mindset might lead to excessive saving and reluctance to spend, even on necessary expenses.
So how do you uncover your own money stories?
To understand more about why you hold certain beliefs about money, your financial planner can take you through the following questions:
- What are your earliest memories about money growing up?
- How do those memories make you feel?
- Would you say your parents were good or bad with money?
- Was money spoken about in your home or was it a taboo topic?
- How do you feel those memories are influencing you as an adult?
The next step is to view your answers in light of the four categories that summarise money stories. At Tribeca, our financial planners use slightly different terms to describe the categories originated by Dr Klontz. We call them Money Procrastination, Money Devotion, Money Reputation, and Money Caution.
So, here’s our take on what each story means and what they say about your money beliefs.
Unpacking your money stories
Money procrastination
“If I don’t think about it, the problem will go away on its own.”
Money Procrastinators have negative associations with money. They are usually ashamed to have money and feel they don’t deserve it. Characteristics include: self-sabotage, ignoring bills and financial statements, overspending, giving away more money than they can afford, difficulty managing a budget.
If you relate to this story a great way to counteract these feelings is setting a regular money date with your partner or a friend to help keep you on track with your spending and overall finances.
Money devotion
“Money solves everything.”
Money Devotees believe that the key to happiness and the solution to their problems is to have more money. Characteristics include: credit card debt, prioritise work over family, buy things in an attempt to achieve happiness.
If you relate to this story, the best way to start thinking about your spending is asking yourself is it a want or a need? If it’s a need, go ahead and buy it. If you want it, make sure you have extra money to spend on fun things before you buy it.
Money reputation
“I need the latest items to prove how successful I am.”
Those falling under the Money Reputation category believe that their self-worth is linked to their net worth. Characteristics include: overspending, hiding expenses from loved ones, grew up in a household that prioritised financial status, overworking.
If you relate to this story, try sharing your financial situation with friends or family (when you feel comfortable enough). You’ll be surprised by how supportive your network can be, and how many people feel the same way.
Money cautious
“I need to save as much as I can, just in case.”
The Money Cautious are alert, cautious and concerned about their financial health. Characteristics include: more likely to have high financial wellness, rarely buy on credit, frugal and enjoy saving money, less likely to keep financial secrets from their partner, can be overly worried about money.
If you relate to this story, it’s important that you don’t miss out on opportunities to enjoy life. Make sure you set aside funds to treat yourself to memorable experiences – whether that’s just for you or with family and friends.
Can you rewrite your story
Is there a money story category that you can identify with? You may not just be in one.
Don’t worry if you identify with a story you’d like to change; that’s a good thing. Understanding and connecting with your money beliefs can lead to a healthier sense of financial wellbeing and help you achieve your goals and aspirations. By being aware of your money stories, you gain the freedom to change them, improving your relationship with money and positively influencing how you view and react to the financial behaviors of those around you.
For example, you may be in a relationship where one of you is a spender and the other is a saver, and this can cause frustration. By understanding more about your own and your partner’s money story, the friction may be eased as you have greater context to your behaviours.
Whichever money stories apply to you, here’s a few basic tips to build better financial habits:
- Set small, achievable goals.
- Always have something to work towards to give yourself a challenge.
- Own your financial situation. Regularly monitor your fixed and discretionary spending to ensure you stay on track.
- Communicate with your partner – never underestimate how important it is to be on the same page and understand each other’s money stories.
At the end of the day it’s really about gaining a greater understanding of your relationship with money – your financial wellbeing – and looking at ways to improve it.
Live your
Good Life
Money stories are just one of the tools our financial advisors use to establish clarity around your attitudes to finances, and identify the best way we can work with you to achieve your Good Life.
If you would like to explore how Tribeca can help you uncover your own money story, please book in a ‘get to know you’ call with one of our financial advisors here.