How to control the unconscious attitudes influencing your money habits

Being good with money isn't just about knowing the correct information, but having the right attitude. Financial decisions are heavily influenced by unconscious emotional impulses, and sometimes these impulses lead to an unhealthy relationship with money. "If we're not aware of what the issue is, we cannot change it," says Dr. Alex Melkumian, a licensed marriage and family therapist and founder of the Financial Psychology Center  

Dr. Bradley Klontz, financial psychologist and a co-founder of the Financial Psychology Institute, has spent years researching unconscious patterns driving financial behavior, which he calls "money scripts." CNBC Select talked with Klontz and other financial therapists to get their advice on identifying and addressing these behaviors. 

Money scripts are a way of putting a name to a cluster of underlying beliefs about money that tend to lead to certain financial behaviors. "It's really important for people to understand these are not personalities," says Natasha Knox, Certified Financial Behavior Specialist and CFP®. People often have a mixture of all four money scripts humming in the background, but certain scripts exhibit themselves more strongly in different individuals (and in different situations).

These unconscious mindsets are typically tied to what we learn and experience as children and how we react to those experiences. "You could have children growing up in the same household experiencing the same thing. But where it goes for them is totally different," Knox says. One child might grow up to model the financial behavior they observed, while another will adopt a completely different mindset. But in both cases, Knox says, the response is driven by emotions.

Those who show traits of money avoidance view wealth with some level of disgust. "It's a general negative association with money and with wealthy people," Klontz says. Money avoidance beliefs include: 

• Rich people are greedy 
• It's not okay to have more than you need 
• There's virtue in having less money 

Why this can be a problem 

Having an unfavorable view of money may make you more likely to unconsciously self-sabotage your finances by neglecting anything related to money management. "If somebody has a mindset of money avoidance, there's going to be quite a bit of financial anxiety, financial fear, and financial stress," Melkumian, says. 

How to hack the script 

To address money avoidance beliefs, Klontz suggests creating a more balanced view of wealth and the wealthy. While some people get wealthy by taking advantage of others, that's not a universal truth. It could be helpful to find people you can relate to that you consider wealthy (even if they're not famous) who live in a way you consider virtuous and to find out how they make money and what they do with it. 

Money worship is the belief that money is the answer to all your problems. These beliefs put money on a pedestal and include: 

• Money makes life better 
• Money buys freedom 
• You can never have enough money  

Why this can be a problem 

A strong money-worship mindset drives people to pursue happiness through purchases, which can reduce your enjoyment of life to a number in a bank account. Part of the reason this money script can easily get out of hand is that money undoubtedly makes many things easier — it's stressful when you have trouble paying your bills or putting food on the table.

"But it doesn't solve all of life's problems," Klontz says. "Does buying stuff actually make you happier? And if it does, how long? Because typically people then have buyer's remorse." 

How to hack the script 

The solution is to shift your mindset to focus on what brings you joy. "It's not really the money that makes you happy," Klontz says. "It's what you do with it." To focus your spending on what will give you the most positive, long-term benefits, make a list of what you frequently spend money on. Then review that list and identify what made you feel fulfilled even after the initial endorphin rush from the purchase wore off. This can help you prioritize your spending in meaningful ways 

Money status beliefs tend to link personal value to financial value. These beliefs include: 

• Your self-worth is your net worth
• People need to see your wealth 
• I only buy new things 

Why this can be a problem 

The money status script is personified by social media influencers flaunting expensive watches, cars and clothes. "It's approval and love ... that's what we're seeking," says Melkumian. Money status behaviors can lead to severe lifestyle creep, where you end up living paycheck to paycheck even as your income increases.

How to hack the script 

Before you make an expensive purchase, ask yourself why you're buying it and how it fits into your budget. Do you have to take on debt (even if it's in the form of a credit card balance you have to carry month-to-month) to make the purchase? If so, that's a big red flag you can't actually afford what you want and should strongly consider passing — no matter how good it looks in a photo.

The money vigilant tend to keep their financial lives to themselves and avoid frivolous spending. Beliefs associated with money vigilance include: 

• Money should be saved 
• You shouldn't tell anyone how much you have or make 
• It's extravagant to spend money on yourself 

Why this can be a problem 

In many ways, money vigilance is the opposite of money status. This money script can help you build healthy financial habits like having less credit card debt and a higher net worth. But there's also a dark side to it that may not show up in any balance statements. "People can become so anxious around money that they can never enjoy it," Klontz says. "Ebenezer Scrooge had some money vigilance, as an extreme example." 

How to hack the script 

One way to address a money vigilance problem is by making controlled purchases of things you normally would consider too expensive. Exposure to what you fear decreases anxiety, Klontz says. "I will actually give them the assignment of spending money on something ridiculous." This could be as simple as an $8 latte or a $15 turkey sandwich. Of course, you want to make sure you're budgeting for these purchases so you don't swing too far in the other direction with extravagant spending.

If you're struggling to make progress or identify hidden beliefs, you may benefit from working with a professional therapist. An outsider's perspective may be just the thing to help kickstart the changes you want to make. "It's not about being judged," says Judith Gruber, a certified financial therapist. "It's about finding the best in you and ... how do you want to live your life? What do you want to experience?" 

Once you've identified the beliefs and behaviors you want to change, Melkumian suggests forcing yourself to do something that goes against those financial instincts. Having some practical experience with the new habits you want to build can boost your confidence and make it easier to gradually adopt a new money mindset.

As you take steps forward, have patience with yourself and be open to adjusting along the way. Changing what you believe about money and how you approach it isn't about getting fast short-term results. "It's really about committing to getting healthier and committing to ... a new financial journey," Melkumian says. 

The four money scripts are research-backed categories of beliefs about money that tend to shape your financial decisions. You can exhibit tendencies of more than one script and how these mindsets affect your behavior can even be situational. The emotions that drive these behaviors are often unconscious and by identifying the root cause, you can begin to steps to change your situation.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of personal finance. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed:

• Dr. Alex Melkumian, author, Licensed Marriage and Family Therapist and founder of the Financial Psychology Center.
• Judith Gruber, Certified Financial Therapist, Licensed Clinical Social Worker and founder of Money and Self-empowerment Co™.
• Dr. Bradley Klontz, financial psychologist, author, CFP®, Associate Professor of Practice at Creighton University and co-founder of the Financial Psychology Institute.
• Debra Kaplan, author and licensed clinical therapist specializing in financial disorders, sex addiction, trauma and relationships.
• Natasha Knox, CFP®, Certified Financial Behavior Specialist®, Financial Therapy Association board member and founder of Alaphia Financial Wellness.

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