5 Money Beliefs for Better Financial Wellbeing

Money beliefs inform our financial habits and impact our behaviors. These beliefs either cause distress or lead to success. Dr. Brad Smith, a financial psychologist, coined the term “money scripts,” which helps categorize these money beliefs that affect financial habits.

Whether you are on your financial wellness journey, it’s great to be aware of how your relationship with money–positive or negative–impacts your financial decisions.

Before I share the 5 money beliefs to better your financial wellbeing, I want to share the four types of money scripts described by Dr. Brad.

What’s Your Money Script?

According to Dr. Brad’s research, the four money scripts are money avoidance, money status, money worship, and money vigilance. The first three are associated with negative financial behaviors associated with living paycheck to paycheck, lower net worth, higher debt, and no savings. The last belief, money vigilance, was not associated with any negative financial habits.

1. Money Avoiders

The first category is money avoiders who view money negatively with fear and anxiety. These may include beliefs that money is the root of all evil, and wealthy people are greedy. This belief creates conflict between the negative view of money and the desire for a better life that money affords. Money avoiders may often find it challenging to set financial and life goals and create and stick to a budget.

2. Money Worshippers

With money worshippers, this group believes that money solves all problems and money can buy happiness. It’s often associated with the idea that only money can make things better in life–more money equals more happiness. With worshippers, money is seen as scarce and prioritized everything else, including health, family, and social relationships. The money worship script can lead to work-life imbalances, compulsive spending, and hoarding behaviors.

3. Money Status

The third script is money status which defines one’s self-worth by their financial net worth. Money status beliefs focus on buying the latest and trendiest new item. Money is seen as a status symbol that needs to be shown through stuff to show others their financial success. This can lead to overspending and living a life that isn’t reflective of actual values. With the money status, this belief often leads to financial dependence on others and compulsive spending problems.

4. Money Vigilance

The final script is money vigilance associated with frugality, wealth protection, and those who focus on saving and financial wellbeing. They believe in hard work to make money and are guarded when discussing financial matters with others. Unfortunately, being too money vigilant can prevent you from enjoying the benefits of your financial success.

Understand these money scripts aren’t entirely problematic and can be helpful in different situations. The key is understanding your “script” and work to improve the gaps. And that’s the great news. These scripts aren’t set in stone. Once you know your script, you can begin the work to change your money beliefs.

Now that you have a better understanding of money scripts let me share some money beliefs to help you better your financial wellbeing.

5 Money Beliefs You Should Have About Money

As I continued my financial wellness journey, I’ve discovered five money beliefs that profoundly impacted my financial decision-making. After addressing these limiting beliefs, I made great strides in creating and living my dream life.

I share these lessons to help you improve your relationship with money. Parts of these are excerpts from my book; You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life.

1. Money is a tool

Money is not the end goal. Your purpose in life isn’t to accumulate a stash of cash. I emphasize that money is a tool that helps you serve your purpose. When you understand and accept money as a tool, you begin to use it to build your dream life.

Think of money as a hammer. It can help you build or tear down a wall. So, money can help build or break your dreams. Money as a tool cannot control you; therefore, you must learn to control – use – money.

You must acquire the skill to use the tool, and that is done through lessons, reading, and learning from experts. Learn to manage money to build a life.

2. Money is not evil

Some money beliefs equate it to being good or evil. I grew up believing money was a necessary evil. It created financial behaviors that made me spend money as soon as I made it.

If money is evil, why would I want to hold on to it? It would be immoral. If money is evil, what kind of people have lots of money? Bad people. I didn’t want to be an immoral, bad person, so I didn’t prioritize creating wealth. I’m sorry to break it to you; money is neither good nor evil.

Money is a tool, and how you use money says a lot more about your values. Think of money as a magnifying glass. It will magnify your values and beliefs.

3. Money equates to wealth

I want to focus on material wealth. Wealth is measured by how much you own of value. It’s the size of your asset and your ability to cover your living expenses well into the future. Wealth also limits the impact of financial stress because money gives you access to expert support.

Wealth is about how much you’ve saved and not about how much you’ve spent. I once believed spending equated to wealth. You cannot make yourself wealthy by spending mindlessly.

Wealth comes from an Old English word meaning to be well. Having wealth means you have more control over your time and have more options to support your wellbeing. So, save more, grow income and assets, lower expenses, spend mindfully, and invest intentionally.

4. Money can buy happiness

Happiness isn’t a destination but a result of choices. When you’re using your money well and working towards your vision for life, the result is feelings of happiness.

Because money affords you the necessities of life: food, shelter, medicine, and clothing, money is an opportunity to realize dreams. When you believe money can buy happiness, you’re a bit more mindful of how you spend it. You even want to make more money to use as a tool to achieve life goals – things that matter and add value in your life.

Overconsumption and mindless consumption cannot buy happiness. You end up with more stuff and potentially more debt. Learn the difference between buying what you want and need versus overindulgence.

5. Money can be created

Another money belief concerns our time. Most of us exchange our time for a paycheck. We value money more than our time, and many spend money on things that don’t matter. I used to believe money was made by exchange more hours at work. That all changed when I finally realized I could make money with money.

When you believe money can be created not “worked for,” you begin to find ways to make more money without allocating more time.

For instance, saving money early gives you the benefit of compound interest, where you’re earning interest on interest. You also begin to invest money in the stock market, take advantage of employer retirement plans, and make money off your talents through side hustles.

What is your relationship with money?

Acknowledge your existing money beliefs to reassess your relationship with money. Uncovering the reasons behind your financial behaviors can help you achieve your financial and life goals.

You may not have been aware of it, but you have a relationship with money that has been created since childhood and influenced by others, society, and marketing efforts.

The truth is that money is actually quite simple – we make money to spend money. However, our money beliefs impact how we manage money, either causing distress or lead to success.

The wrong beliefs can cause us to overspend and not save, invest or contribute to our retirement. It may lead to working more hours to earn income and not value the purchases made. On the flip side, a positive money belief prioritizes saving and investing.