Money Scripts

Money scripts are the beliefs a person holds about money, generally acquired early and generally not examined. The term belongs to the clinical work of Brad Klontz and Ted Klontz, and the definition most often cited comes from a 2011 paper in the Journal of Financial Therapy that developed an instrument to measure them. That paper attributes the definition to the authors' own earlier 2009 work rather than claiming it: money scripts are "beliefs individuals hold about money" that are "(a) developed in childhood, (b) often passed down from generation to generation in family systems, (c) typically unconscious, (d) contextually-bound," and that drive financial behavior. The plural names the construct, since a person holds several at once; the singular appears mainly inside the instrument's name, the Klontz Money Script Inventory. The 2011 paper carries no trademark symbol on either.

The instrument was built the way psychological scales usually are, and the method sets the limits of what the result can be used for. The authors assembled 72 statements about money, had a panel of financial therapists assess whether the items looked like what they were meant to measure, and asked respondents to rate agreement with each on a six-point scale. A principal axis factor analysis with an oblique rotation produced four factors; items loading below .30 were dropped, leaving 51 statements distributed across the four scales. Internal consistency was .84 for avoidance, .80 for worship, .77 for status and .70 for vigilance, which is acceptable to good. It was described by its authors as a pilot study.

Money avoidance collects beliefs that money is bad, or that the person does not deserve it. The highest-loading items are statements like "I do not deserve a lot of money when others have less than me," "rich people are greedy," and "money corrupts people." The authors describe money as something that stirs fear, anxiety or disgust for people who score highly, and note the behaviors they hypothesize follow: avoiding spending on even reasonable purchases, and in some cases giving money away in order to have as little of it as possible under one's control. Note that none of this is the same as the everyday sense of avoiding money tasks, which is closer to the ostrich effect and to financial anxiety. The scale measures what a person believes about money, not what they do with their mail.

Money worship collects the belief that more money would solve the person's problems, through items like "things would get better if I had more money" and "more money will make you happier." Whether more money in fact solves problems is a separate research question with its own large literature, covered under money and happiness; what this scale measures is the strength of the belief, not its accuracy.

Money status collects the equation of self-worth with net worth, through items like "your self-worth equals your net worth" and "people are only as successful as the amount of money they earn." The authors describe it as locking people into a competitive stance of needing more than those around them, which is the territory keeping up with the Joneses occupies.

Money vigilance collects alertness, watchfulness and secrecy about money, through items like "you should not tell others how much money you have or make" and "money should be saved not spent." It is the one scale the authors treat as double-edged: it encourages saving and frugality, and taken far enough it stops someone drawing any benefit or security from money they already have. It was also the only scale not associated with income or net worth in the sample, and the one associated with not carrying a credit card balance from month to month.

What the numbers can and cannot support is where most secondary accounts of this work overreach. Three of the four scales correlated significantly with income, and avoidance and worship also with net worth. Every one of those correlations was small, between about 0.13 and 0.24 in absolute size, and negative; the authors themselves write that "although the correlation coefficients were not large, they do show some statistical significance." More importantly, they state plainly that it is not possible to tell whether lower income and net worth precede the beliefs or the beliefs prevent higher income and net worth. Nothing in the study licenses the claim that changing a belief changes a balance sheet.

The sample sets the outer limit. Participants were recruited through a financial-planning and therapy mailing list, social networks and newspaper mentions, so who responded was not controlled and no response rate could be computed. The authors record that the sample had relatively high net worth and education, which restricts generalizing to similar groups, and that 82 percent were white. They also note that no cutoff scores were established, and that norms still have to be built before the instrument can function as a diagnostic tool. A score from an online version of the questionnaire is therefore a description of where someone sits relative to one 422-person sample, and nothing more than that.

The sequence the construct describes is short. A household transmits a belief about money, usually without stating it. The belief is absorbed as background rather than as an opinion, which is why better information later does not displace it. It then surfaces as a decision that does not match the plan the same person wrote, and the mismatch reads from the inside as a personal failing rather than as a belief doing what beliefs do.

A worked example about the arithmetic of the instrument, since that is what most readers will actually encounter. The money avoidance scale has 15 items, each rated from 1 to 6, so its possible range is 15 to 90 (15 × 1 and 15 × 6). The 2011 sample averaged 41.92 on it, with observed scores from 16 to 83. A person scoring 60 is therefore well above that sample's average, and there is nothing in the study that says what a 60 means, because no cutoff scores were established and the authors state that norms still need to be developed. That is the useful piece of arithmetic: the number places you against one convenience sample of 422 people, and stops there.

The practical use is not scoring but naming. A plan built against an unnamed pattern tends to lose quietly, because the pattern is not in the plan and gets consulted anyway. A plan built with the pattern stated can either accommodate it or arrange matters so it is not asked for an opinion every month.

Pros

• It gives a household language for something that otherwise gets described as a character flaw, which is both inaccurate and useless.
• Four named patterns are more workable than a general "attitude toward money," and they point in different directions rather than along a single good-to-bad axis.
• The scales are made of sentences, so a person can read the items and recognize themselves rather than accept a label.
• It predicts where a plan will quietly fail, which is wherever the plan assumes a belief the person does not hold.

Cons

• The evidence base is one pilot factor analysis on a convenience sample that was wealthier, better educated and less diverse than the population.
• The correlations with income and net worth are small and cannot establish direction, so the scales describe an association rather than a cause.
• No cutoff scores were established, so a score from any version of the questionnaire is not a threshold and not a diagnosis.
• The scales measure beliefs and are routinely read as behaviors, which produces the wrong conclusion about what someone actually does.
• Any framework of four types invites sorting people into four boxes, and most people carry more than one pattern at a time.