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4 unhealthy attitudes toward money

May 10, 2011 at 1:05 PM ET

Reuters /

If you find yourself constantly stressed about money, making poor financial decisions that get you nowhere, you're not alone.

A new study provides insight into why some people are locked into these seemingly losing battles with their finances. The research, published in The Journal of Financial Therapy, identifies four basic attitudes that can hurt people’s finances.

These "money scripts" are usually unconscious and typically originate in childhood, said Professor Brad Klontz, one of the authors of the study. They drive our financial decisions and can have catastrophic effects on our finances and lives.

The four harmful money personalities:

  • Money avoidance: Believing that money is bad or that you do not deserve money. For people with this personality, money can evoke feelings of fear, anxiety or disgust. Low-income, younger and single individuals were more likely to hold this attitude.
  • Money worship: Believing that an increase in income or financial windfall will solve your problems. People with this attitude are likely to carry revolving debt. The most common money attitude found in Americans, Klontz suspects it could be a reaction by Baby Boomers to their parents' extreme frugality, which was developed as a survival mechanism during the Great Depression. "When parents take an extreme view of money, children will either emulate that attitude or do the exact opposite, which can be equally dysfunctional," Klontz said.
  • Money status: Tying your self-worth to your net worth. Individuals who believe that money is a status symbol are more likely to be young, single, less educated, and less wealthy.
  • Money vigilance: Being secretive about finances and overly wary of spending. In other words, the classic miser. While people with this trait are often financially secure, they often do not allow themselves to enjoy the benefits of having money. In extreme cases, it can lead to hoarding and underspending.

A healthy attitude about money requires flexibility, said Klontz, who worked as clinical psychologist in Hawaii and specializes in financial therapy.

"If we can identify our money scripts, have insight into the early experiences of our childhood and multigenerational patterns of money beliefs in our family, we can challenge and change financial beliefs that may be causing us financial harm or limiting our potential," Klontz said.

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