20-05-2025
Want to save and make more money? You might need to look inward. How to do it.
When Dr. Brad Klontz' maternal grandfather went to his bank one day, he discovered all of his money was gone.
His bank was one of the thousands of financial institutions that failed during the Great Depression. He was so traumatized that he never put a dollar in a bank again. His daughter carried some of that risk aversion into her life, investing only in certificates of deposit, or CDs, and she felt ashamed of being poor.
Growing up, Klontz internalized some of that shame and wanted to be wealthy. To get there, he decided that instead of being extremely cautious like his mother and grandfather, he'd go in the opposite direction.
Staring at his $100,000 in student loan debt in his 20s, he sold his truck and used the money to buy a $500 car and invest the rest in one asset class in the stock market.
Then the dot-com bubble burst and he watched that money fade away.
'I went from the most risk averse to the riskiest possible approach,'' Klontz, a certified financial planner and psychologist, said. "That's dysfunctional. It's not moderation.'
Klontz says that he was following a "money script," a term he coined for the unconscious beliefs, often rooted in childhood, that affect your financial behaviors as an adult.
'For many of us, it's like a script that was written by somebody else and you're just reading it,' Klontz said.
But just because financial habits are often first molded by things out of your control, it doesn't mean you can't change them. The first step to having a healthier relationship with money is understanding where you currently stand.
Klontz's story is just one example of how people's attitudes toward money are passed down through generations and shaped by experiences or trauma.
He calls his personal experience a 'dysfunctional pendulum swing.' It's something you often see when alcoholism runs in a family, he said. If a parent is an alcoholic, their child will either also become one or never drink a drop of it in their life.
Helping people uncover their money scripts and rewrite them, Klontz said, has led to improved mental health. One study he conducted found people's savings rate increased 73% when they became more aware of their psychological relationship with money.
The four main money scripts are Money Avoidance, Money Focus, Money Status, and Money Vigilance. Klontz offers a free diagnostic test to help determine yours.
Some lead to better financial outcomes than others, but no matter your script, there are tips to help you build a healthier relationship with money.
More: What to prioritize when making a budget? Tips on creating and sticking to one
Those who are money avoidant tend to believe money is inherently bad or corrupting, according to Klontz' framework. Money avoidants might avoid thinking or talking about money, ignore financial statements, financially enable others, or overspend.
Jack Howard, head of financial wellness at Ally Financial, discusses 'money stories' — a concept similar to money scripts — in her financial education workshops.
She said she often sees parents hesitate to have conversations about finances with their children because their own parents avoided the subject.
'I'm hearing that in a lot of our classes. 'We didn't talk about money. It was taboo. It was seen as disrespectful,'' Howard said.
Klontz' advises the money avoidant to schedule periodic money check-ins, financially support people and causes they care about, and to identify a role model who uses wealth to do good, to strengthen their overall relationship with money.
Money vigilant individuals are cautious and concerned about their financial well-being. They save for the future, avoid unnecessary debt, and believe hard work pays off.
'The average American needs to get way more money vigilant,' Klontz said. 'That's just the bottom line.'
But identifying with this script can lead to missing out on experiences due to fear-based decision making. Klontz said as a financial adviser, he's seen wealthy people struggle to spend their money even in retirement because they are used to being so vigilant.
'People who are really high on money vigilance may end up with the highest net worth,' Klontz said. But 'Are they happy? Can they sleep at night? Are they so vigilant around money that they can't spend it?'
If that sounds like you, he advises you create a 'fun money' budget, check in with an adviser who will set your mind at ease, and set limits on how often you monitor your finances.
Money focused individuals often believe money is the key to happiness and a solution to life's problems but also that no amount of money is enough, according to Klontz' framework.
Klontz himself identifies with this script, but he also scores high in the money vigilance category. It's a duality he sees a lot in business professionals.
'The two go hand in hand,' he said. 'Why would you be so conscientious and concerned about it if you didn't want more of it?'
But unchecked money focus can actually lead to lower net worth and higher levels of debt, as people try to buy happiness and prioritize work over relationships, research shows.
Tips for the money focused include pausing before making a purchase to determine if you need it and realizing money can buy comfort but not connection. Giving both money and time to causes and people that matter to you can also help those who identify with this script.
If you often tie your self-worth to your net worth, you may find the money status script familiar. Individuals who fall into this category may be a fan of outward displays of wealth and see them as a way to gain respect, according to Klontz' framework.
Klontz said he likely would've scored high in this category when he was younger. When he started making six figures for the first time, he bought himself a luxury watch and a gold bracelet for his mother, even though he still had a significant amount of student loan debt.
'I don't know why I did it. I mean I did it because I heard there's a whole club when you're making money now and it's about luxury watches,' Klontz said. 'It's a signal, you know? 'Hey, I've made it.''
Howard said as a mom to a Gen Z child, she sees the younger generations buying things to showcase and achieve status on social media. Those social networks' influencers and ads can also lead to more impulse buying, she said.
To avoid the most negative outcomes including overspending, compulsive gambling, and financial dependence on others, money status seekers should take a step back. Klontz advises them to pause before they purchase, schedule money check-ins, and take care of their overall health instead of only chasing financial goals.
Reach Rachel Barber at rbarber@ and follow her on X @rachelbarber_
This article originally appeared on USA TODAY: Financial wellness benefits from self reflection. How to do it.
