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Do You Understand Your Emotions About Money?

When it comes to making financial decisions, whether that’s buying a new TV or investing an inheritance, most of us know the wise thing to do. We know not to spend more than we have, to stay disciplined when the markets go haywire, and to set aside funds for a rainy day. But just because our brains know the right thing to do, our emotions often make the decisions for us. If you’ve ever had buyer’s remorse after making a big purchase or avoided making a budget, you know firsthand how much of a role emotions play in our financial lives. Psychologists refer to these emotions and beliefs we hold about money as “money scripts.”1



It Starts In Childhood

No matter how hard we try to make only rational and well-thought-out financial decisions, we just can’t seem to do it. This is most likely due to the emotional and psychological baggage we 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. 


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. 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, some, like money avoidance, money status, and money worship, can be detrimental. Unhealthy emotions and belief patterns can lead to all kinds of financial problems, such as 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 down markets or overconfidence when they rally veer you from 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 put off something you know is important out of embarrassment or discomfort? Have you ever wreaked havoc on your budget for the momentary high of acquiring something you really wanted?

Money Scripts Can Be Changed

Everyone is susceptible to emotions that sabotage their finances. The good news is that though our money scripts are ingrained from childhood, they are not permanent. With a focused and concerted effort, they can be changed. It’s all about mind over money.


Do you know what the biggest indicator of success is? Emotional intelligence, or self-awareness and self-management.2 Before you can take charge of your money scripts, you first have to identify them. One way to do this 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
  • Extreme volatile markets
  • Trending up or down markets
  • Meeting with a financial professional
  • Thinking about your financial future

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

How To Manage Emotional Money Decisions

Learning to control your emotions is the key to changing your money scripts and developing healthier money habits. You can also build habits into your life that protect you financially, such as taking advantage of automatic saving and investing through your bank or employer’s retirement plan. You can schedule regular family budget meetings and enlist a friend or loved one for accountability. You can learn how you respond to emotional triggers and mandate a “cooling off” period for yourself before making any decisions. 

Finally, you need to be willing to forgive yourself when you make mistakes. Leave the past in the past and move forward with the new knowledge you have gained.  

Find An Objective Financial Partner

An important resource to utilize on your journey of taking control of your finances is your financial professional, someone who can look at your situation from the outside in and help you navigate your finances without the emotional attachment you bring to the table. At Montag Private Wealth, we provide customized and comprehensive financial plans based on your financial situation. If you want the help of a professional to guide you through your financial life and overcome your money scripts, book an appointment now

About Carl

Carl Martel is the president and portfolio manager of Montag Private Wealth. Along with more than 15 years of capital market experience and 10 years of experience in real estate hard assets, he is a Chartered Investment Manager® and holds a Certificate in Derivatives Market Strategies from CSI Global Education, a Masters of Science from Laval University, and an MBA from l’Université du Québec à Montréal. A focused and pragmatic, results-oriented investment professional and entrepreneur, he specializes in serving the unique financial needs of high net-worth individuals and families, foundations and endowment funds, and business owners. To learn more, visit or connect with Carl on LinkedIn.