(This page may contain affiliate links and we may earn fees from qualifying purchases at no additional cost to you. See our Disclosure for more info.)
If I had more money, ____ wouldn’t be a problem.
I work hard. I deserve that new _____.
I’ll never be able to pay off this debt.
I can’t earn enough to get ahead.
I need X amount of money to have peace of mind.
I’m a cheapskate.
Spending money on things for yourself is selfish.
Money can elicit a whole slew of feelings: shame, pride, guilt, stress, and more. And, more often than not, these feelings about money stem from your childhood.
Even if the adults in your life didn’t openly discuss money as you were growing up, you still picked up on how it was handled in your family.
Maybe there was a traumatic event, like a job loss, death, or divorce. Or perhaps it was things such as extreme frugality or spending, parents arguing about money, or a feeling of tension about paying the bills.
All these experiences combined to form your money story (or money scripts, as some call them). Your money story was written, whether you realized it or not. And you carry your money story from the past into your adult life.
By better understanding your story, you can take steps to improve your financial future.
Below we’ll explain what a money story is and how it can affect your finances. We’ll also discuss how you can identify your money script and create a new one.
What is a “Money Story”?
A money story is a personal narrative about money. It makes up your beliefs, thoughts, and feelings about money – and affects your financial behaviors.
Money stories are often generational and culturally based.
Your money story started forming in early childhood. It is passed down to you from parents and other influences in your young life. As a child, you observed the adults in your life – even when they didn’t know you were paying attention.
You heard conversations and casual comments. And you noticed how your parents handled financial situations. You sensed strong emotions and remembered specific experiences—particularly those that were traumatic or uncomfortable.
You might not think you picked up on how money was handled when you were young, but it affected you. And it formed the beginning of your money story.
Your money script can have good chapters and bad chapters.
Maybe your story gave you all the tools you need to be successful with your finances. Or perhaps it gave you negative perceptions that have stunted your financial success.
Either way, it’s important to understand how it affects your finances right now.
How Can It Affect Your Finances?
When you think about money, it’s never just about the money. It represents much more than a tool for life. It’s linked with emotions, such as shame, fear, pride, control, and more. It’s easy to give money a lot of power in your life.
Your money story can affect your finances more than you think it does.
It might affect you when you’re trying to decide how much to spend on a car. It can determine whether you buy a house (and how much you spend). It sways decisions about your job and income. And it influences how you handle finances in your relationships.
As an example, let’s say you experienced trauma or unhappiness as a child. This unhappiness stemmed from your parents fighting about their finances.
The story you may have picked up was that the “lack” of money was the problem in your family. In your child’s mind, you infer that if your family only had more money, the difficulties and unhappiness would go away.
In an attempt to avoid that same problem in your adult life, maybe you strive to accumulate more and more cash. Or you seek complete control over the finances in your relationships.
Or perhaps you go the opposite direction, and just don’t want to deal with money, since it’s a source of pain from your past.
For many, a scarcity mindset about money, or a feeling that “there is never enough,” is common. Sometimes even when there is more money coming in, it never feels like enough. Most of us can look back to our childhoods to see how this money mindset formed.
Think about paying bills, owning a home, buying a car, work and income, and other money-related decisions. How do you think your financial script has affected these decisions?
Identifying Your Money Story
Identifying the money story that formed early in your life can help you move forward with a new awareness.
This knowledge promotes an understanding of your present thoughts, feelings, and decisions about your finances. With this awareness, you can move forward – and alter the script if it needs changing.
To identify your money story, you have to dig deep. You’ll need to answer some tough questions. No filters, no second-guessing yourself.
Let go with your honest thoughts, feelings, experiences, and impressions about the issues. Things can come up that you didn’t remember were there.
To get the most out of the questions, write down your answers. It might surprise you what pops up when you start writing without any goal or expectations.
Questions to Ask Yourself to Identify Your Money Script
- What’s your earliest childhood memory about money?
- Do you remember your parents talking about money? Fighting over their finances? What precisely can you remember?
- What was the feeling around spending money and paying bills when you were growing up?
- Did your family of origin experience a significant financial event when you were a child? A job loss, divorce, substantial debt, windfall, etc.
- When you were young, did you feel like you had more, less, or the same money as your friends? Did you make comparisons?
- What were the financial circumstances of your parents’ childhoods? How could that have shaped their money stories? And how has their money story influenced yours (i.e., what did you inherit)? For example, Depression-era children might have a scarcity money story.
- Do you have feelings of guilt about money?
- Do you feel like you deserve money?
- Where do you spend money? Where do you want to spend money? Do these align?
- Do you feel like financial success is attainable? Why or why not?
Once you have a better idea of your money story, you can take a good, hard look at how it affects your money mindset and finances today.
- Is it holding you back?
- If so, how?
- And how can you move forward with this information?*
*If your money story is blocking you and keeping you from moving forward in life – or causing emotional distress or conflict in your relationships – consider professional counseling.
The Next Step: Creating a New Financial Tale
Once you know your money story, you can see how it’s serving you now. Then you can determine if you need to create a new money mindset.
If you discover you have harmful scripts from your money story, they will play out in your finances over and over again. That’s when it’s time to write a new tale. The past doesn’t dictate the future. If your past money story isn’t benefiting you, you can break free of it.
You can forgive yourself and others, create a new vision, and build habits to support your unique story.
According to the Journal of Financial Planning, “Once identified, money scripts can be challenged and changed to interrupt destructive financial patterns and promote financial health.”
- What does your new money mindset look like?
- How does the new story play out in your life and finances?
- For example, will you earn enough income, pay the bills on time, save more, spend less, invest, let go of the shame and fear, not worry about money as much?
- What actions and behaviors do you need to take to make your new financial tale a reality?
- What thoughts and feelings does your new mindset about money elicit?
Write down your new financial mindset and how it plays out in your life.
Then take steps to make sure your revamped money story comes true. Educate yourself on what you need to live your improved financial script. Take action to make small, incremental changes. Over time your new financial pictures will emerge.
Closing Thoughts on Your Money Story
Your money story might be buried deep in your past, but it can affect your finances today and in the future.
By uncovering your own money story, you begin to understand your financial life. Making necessary script edits can then help you improve your money mindset and your financial health.
- Financial Planning: what, why, and how to create a financial plan
- How Can You Make Managing Your Money More Fun?