Why your money mindset matters more than you think
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Most people approach personal finance in a way that’s seemingly most logical: numbers, budgets and limiting daily expenses. But according to Brad Klontz, PsyD, CFP, financial psychologist and associate professor at Creighton University’s Heider College of Business, there’s another step people often miss.
The key to long-term financial success starts well before spreadsheets. It starts with your mindset.
The power of money scripts
Many of our financial behaviors are subconsciously shaped by something called money scripts—deeply ingrained beliefs about money that are often formed in childhood. These beliefs, like “spending money is scary” or “more money means more happiness,” influence how we spend, save, invest and manage our financial lives.
“Most people don’t even realize these beliefs are driving their decisions,” says Klontz. “But they have a powerful impact.”
Why Your Money Mindset Matters
Redefining financial literacy
We often think of financial literacy as understanding how to budget, invest and save. But Klontz emphasizes understanding and rewriting your money script is part of financial literacy. As is identifying your goals and aligning your behavior with them.
“It’s not just about knowledge,” he says. “It’s about behavior. And understanding yourself is a key part of that.”
Start with one step at a time; you might feel overwhelmed if you overhaul your financial behavior all at once.
Moving toward financial well-being
Financial confidence doesn’t come from a perfectly balanced spreadsheet. It starts with a healthy mindset. When you begin to understand the beliefs that influence your financial life, you gain the power to make more intentional, empowering choices.
Because the first step to building the future you want isn’t just a budget—it’s believing it’s possible.
Most people don’t even realize their money scripts are driving their decisions. But they have a powerful impact.
— Brad Klontz, PsyD, CFP
Mindset first, money second
Behavioral finance research shows that mindset often determines behavior. If you believe wealth is possible for you, you’re more likely to take positive action. But if you believe financial success is out of reach, you're less likely to even try.
“Your mindset can be your greatest asset or your biggest barrier,” Klontz explains. “If you believe that the system is rigged against you specifically, you’ll self-sabotage. If you believe money is freedom, you’ll find ways to grow it.”
When you become aware of the ways your money script influences your decisions, you can start to shift them for the better.
How to rewrite your money story
Start by exploring your financial psychology, or your core beliefs about money. Ask yourself:
Where did this belief come from?
Is it still true today?
Is it helping or holding me back?
You can also try to work backwards, starting by identifying your money behaviors, like your spending habits, and your thoughts and feelings when you’re making a purchase or avoiding one. This may provide some clarity into why you make certain purchasing decisions.
Once you’ve identified your money script, think of the ways you can replace limiting beliefs with more supportive ones. For example, instead of thinking “I’m just not good with money,” try, “I’m learning how to manage my finances in a way that works for me.”
If you believe that success is out of your reach, you're never even going to try. But if you believe you can learn and grow, you will start taking meaningful action.
— Brad Klontz, PsyD, CFP
