How to turn unhealthy money mindsets into smart financial decisions

Wealth planning

Beliefs about spending and wealth often form during childhood and can fuel negative financial behaviors. Thankfully, these habits can be changed.


Cyndy Ranzau grew up as one of four kids to a single mother who kept a very tight budget.

But Ranzau, a wealth strategist with RBC Wealth Management–U.S., didn’t realize just how much this shaped her relationship with money until she began working with many high-net-worth clients who hold the same kind of reservations on spending their hard-earned money. “Even though I can afford nice things, I tend not to want to spend the money on them,” she says.

And while there’s nothing wrong with being cost conscious, Ranzau says the attitudes about money that she’s carried with her since childhood have sometimes led to poor decisions. That reality hit home after she hired a moving company that offered a good deal for a relocation. It took a month for her belongings to show up.

“When they finally did bring our stuff, the boxes were crushed and my crystal from my mom was destroyed,” she says. Her deep-seated beliefs about money prevented her from “looking at the value versus just the price,” a lesson she’s not eager to relearn.

What is a money script?

Everyone has a unique “money script” informed by our personal experiences and family circumstances, says Angie O’Leary, head of Wealth Planning at RBC Wealth Management–U.S. “Understanding our money mindset, and the history that contributes to our belief system, helps facilitate financial health and leads to better outcomes.”

Brad Klontz, a certified financial planner and Creighton University professor in Omaha, Nebraska, coined the term “money scripts” and identified four distinct categories: money avoidance, money status, money worship and money vigilance. The first three are linked to negative financial behaviors.

People with avoidance believe money is bad and that wealthy people are greedy and don’t deserve financial success. Those in the money status category tend to fixate on owning the newest and best things, while those who revere money are convinced that more of it will solve their problems and bring them power and happiness. Those with money vigilance, like Ranzau, embrace frugality and are committed to saving while being discreet about how much they have or make.

“We take these beliefs for granted as adults and we rarely go back and examine them, let alone decide to change them because they aren’t getting us where we want to be,” Klontz says. “They’re kind of like an actor’s script in a movie. We just continue to read the lines in our heads or out loud to our families and friends and believe they’re true, when in fact they’re often quite distorted and can limit our success.”

Ranzau says she most identifies with money vigilance, but sees other scripts influencing her life based on the different experiences she’s had. “Nobody has just one money script,” she says. “What’s your money script when it comes to savings? What’s your money script in your day-to-day household management?”

Identify your money script

Negative money mindsets can emerge in times of financial crisis, such as during the COVID-19 pandemic when stock markets became turbulent. O’Leary sees clients who bail out of their investment plans then can’t get back in. “In the absence of any discipline, your money scripts will take over your financial behavior. And that can be really damaging, especially in stressful times,” she says. “Some of those behaviors come right out of our money scripts from how we grew up.”

The same applies for today’s parents, O’Leary says, and it’s important for them to understand how their actions form money scripts their children could hold on to throughout their lives. “Parents need to be really aware of how they’re talking about these things because that’s how scripts are formed,” she says. “Our reaction to financial stress and the narrative we share with our kids can leave a lasting impression.”

O’Leary says she’s most aware of how money scripts play out in her own life when she’s discussing finances with her husband, whose parents’ views were shaped by the Great Depression and World War II. “They had zero debt—ever,” she says. In contrast, her parents were entrepreneurs who took on debt when interest rates were sky high in the 1970s and used it to build wealth. “So you can imagine how this could play out in our house when we’re talking about money.” she says.

Turn negative scripts into positive financial planning

While damaging money scripts like money avoidance, money status, and money worship are powerful, they can be replaced with healthier ones, O’Leary says. Using money mantras—a personal motto you can repeat over and over again—is one powerful tool for creating new, healthier money scripts.

During a recent discussion with young women facing high stress levels connected to student debt, O’Leary showed them how to take control of their thought process. “In the absence of any discipline, your money scripts can take over your financial behavior—and that can be really damaging, especially in stressful times,” she says. “When you’re feeling all tight in your stomach about it, you start to replay that new script that says ‘I’ve got a plan and I’m on track.’”

Conversations about money scripts can be uncomfortable, O’Leary says, and societal factors have made it difficult for older Gen Xers and baby boomers to understand their own mindsets. “But money scripts help,” she adds. “Everybody has some history with money. You can get people talking, and they start making the connection.”

Moving forward, Ranzau says she has embraced some new money scripts, including the importance of being willing to pay for expertise when it counts, such as hiring a financial advisor to help her and her husband reach their goals.

And she also keeps her old money scripts in check. “The first step is recognizing your behaviors,” she says. “Then you can work on changing the negatives ones.”

<Return to Women and wealth

RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.

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