Do You Understand Your Emotions About Money?

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Published by Daniel Morrison, Wealth Advisor

Have you ever had buyer’s remorse after making a purchase? Have you ever let fear of failure keep you from investing, or even creating a budget? If you have experienced these feelings before, then you know firsthand how much of a role our emotions can play in our financial lives. And did you know that there is actually a term for the way these emotions affect our financial decision-making abilities? Psychologists refer to these emotions and beliefs we hold about money as “money scripts.” (1)

The Roots Of Your Money Habits

Have you ever felt that no matter how hard you try to make only rational and well-thought-out financial decisions, you just can’t seem to do it? This is most likely due to the emotional and psychological baggage we all carry around relating to our money, otherwise known as our money scripts. Before you beat yourself up about this, understand that these scripts start forming at a very young age, and not all of them have been formed by you.

Even if we aren’t aware of it, we spend our childhood watching our parents relate to and deal with money, and over time, our brains are unconsciously trained to respond in similar ways. For example, if your parents were confident and wise investors, you will likely face investing with confidence. If your parents scrimped and saved and constantly fought over expenses, you may have strong feelings of guilt when making large purchases.

The seeds of money scripts are planted in childhood and grow to influence your financial behavior as an adult. For this reason, it is incredibly important to talk to your kids about money and model healthy financial behaviors. It is also vital for you to take the time to explore and understand your money scripts and how they influence your financial behavior.

The Negative Side Of Money Scripts

While some money scripts are beneficial to financial health, others, such as money avoidance, money status, and money worship, can be detrimental. Unhealthy emotions and belief patterns can lead to all kinds of financial problems, including financial infidelity, compulsive buying, pathological gambling, and financial dependence. Certain money scripts have been tied to lower levels of net worth, lower income, and higher amounts of revolving credit.

Those may sound extreme, but have you ever let panic during a market downturn take your focus off of your long-term investing plan? Have you ever been unable to make a decision because you were paralyzed with worry and anxiety about the future? Have you ever wreaked havoc on your budget for the momentary high of acquiring something you really wanted? All of these behaviors stem from your personal money script.

Money Scripts Can Be Changed

We often think that if we had more money, we wouldn’t have any problems. But we have money problems because of how we approach money, not necessarily because we don’t have enough. This is good news! We might not be able to drastically increase our income, but we can learn to significantly change our attitudes and control our perceptions. Our money scripts may be ingrained from childhood, but they are not permanent. With a focused and determined effort, they can be changed.

The first step to overcoming your money scripts is identifying them. One way to do so is to be aware of your emotional responses to common financial situations. How do the following things make you feel?

  • Earning money
  • Buying things
  • Saving for the future
  • Budgeting and tracking expenses
  • Making financial decisions
  • Volatile markets
  • Healthy markets
  • Meeting with a financial professional
  • Thinking about your financial future

Anything that elicits strong emotions warrants further reflection. Negative emotions are not the only ones that can harm your financial life. Some positive emotions, like optimism and self-confidence, can still potentially bring about negative results if left unchecked.

How To Manage Emotional Money Decisions

Learning to recognize your emotionally driven money scripts is only the first step. Learning to then control those emotions is the real key to changing your money scripts and developing healthier money habits. You can also begin to apply some beneficial practices to protect you financially, such as taking advantage of automatic saving and investing through your bank or employer’s retirement plan. Another great practice is to schedule regular family budget meetings and maybe even enlist a friend or extended family member as someone to hold you accountable. By doing things such as these, you can learn how you respond to emotional triggers and learn to self-mandate a “cooling off” period for yourself before making any decisions.

And last but definitely not least, you need to be willing to forgive yourself when you make mistakes. Leave the past in the past and move forward fresh with the new knowledge you have gained. We all make mistakes; what is important is that we learn from them and don’t allow ourselves to keep repeating them.  

Your Financial Partner

An important resource to utilize on your journey of taking control of your finances is your financial professional. At Jacob William Advisory, we believe that knowledge is power and is the foundation for wise decision-making. We also believe that enlisting a professional for guidance and accountability is the best way to build on that foundation. If you are ready to break free of your money scripts and make sound decisions that will help you pursue your goals and avoid costly mistakes, contact our office today by calling 410-821-6724 or emailing

About Dan

Daniel Morrison is the co-founder and Managing Partner of Jacob William Advisory, a wealth management firm whose sole mission is to service their clients’ needs beyond their expectations. Dan Morrison has 27 years of industry experience, and for the past decade, he has been committed to building Jacob William Advisory into one of the foremost wealth advisory firms. Dan graduated from the Towson University with a bachelor’s degree of finance in economics and obtained his master’s degree in finance from the University of Baltimore. He is a CERTIFIED FINANCIAL PLANNER™ professional and holds the designations of Chartered Financial Consultant® (ChFC), Chartered Life Underwriter (CLU), and Chartered Advisor for Senior Living (CASL). He and his wife Beth reside outside of Baltimore, Maryland, and have three wonderful children. Dan is involved in his church and is a board member for Believe Big, a charity whose mission is to help families navigate the cancer journey. He enjoys spending time with his family, playing golf, and sailing. A good book is also never far from his reach. Learn more about Dan by connecting with him on LinkedIn.



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