More Money, More Problems: What your Money Mindset Says About You

By Lana Cheaib

We all want to make money. In the end, it's the only way to survive. Despite it being such a fundamental resource, we all have different means of obtaining a personal threshold that allows us to sustain mental clarity.

Our money scripts, which are defined as our unconscious convictions surrounding money, are often formed as early as preschool days, when we’d ask our parents for a particular toy or beg for a fast food meal, only to be denied as we drove back home. 

The question remains: How have these early perceptions of money formed our present-day monetary mindsets? Are you even aware of the type of relationship you share with money?

6 different monetary mindsets conflict with one another within their pairs: 

• Scarcity mindset versus Abundance mindset 

• Poor mindset versus Rich Mindset

• Money Worship versus Money Avoidance

Despite the contrasting pairs, there is a continuum, and where one may fall onto the spectrum, another may fall opposite. Money scripts are subject to change and are situational, making way for an intersectional embodiment.

(Famous Campaigns, 2021)

Scarcity Mindset vs. Abundance Mindset

A scarcity mindset is defined through two avenues:

• The tendency to fixate on what you do not have rather than what you do (Burdick, 2023)

  
  

• Is a form of social comparison that prides itself on the belief that because someone else is doing well, it is dipping into a collective bucket of limited resources, making them less accessible for yourself.

  
  

An example of both these avenues would be:

• "I am broke. I am living pay-check to pay-check,”

• “If I don’t get this opportunity, I’ll never have another chance.”

This triggers feelings of anxiety, greed, and inferiority. The mentality that there are only so many resources out there, and I need to get my hands on them before someone else does! is the emblem of the scarcity mindset.

This set of money-scripted beliefs explains why many never believe they have enough and centralize financial expansion over financial appreciation. In short, the scarcity mindset is constantly thinking about how things could be instead of how things are. 

In contrast, an abundance mindset is recognizing the opportunities you do have and taking advantage of them to achieve your ambitions. This represents a complete 360-degree shift from a scarcity mindset, as it employs problem-focused coping: recognizing the issue at hand and planning accordingly (Burdick, 2023).

An example of an abundance mindset is the affirmation, “I don’t need to cling so tight, there’s always more (money) coming.” Being able to reinforce these affirmations demonstrates that there is enough to go around, the power is within oneself to change one's circumstances, and we must be grounded in the now to recognize what is in our control.

The abundance mindset in the context of money is recognizing that you do have the money to spend, you are worthy of financial security, and that there is always more where that came from. These appraisals do not come innately but are rather developed through a strong foundation of self-esteem and an internal sense of trust.

Not only are those with an abundance mindset resilient, but they exhibit grit when faced with financial adversity, reinforcing their psychological flexibility.

They do not believe that one man’s loss is another man’s treasure, but rather the ocean’s big enough for every ship to sail without one sinking.

(Jack Johnson, 2021)

Poor Mindset vs. Rich Mindset

A poor mindset views money strictly as a source of compensation for labour. Those with a poor mindset tend to spend their money on momentary pleasures and instant appeasement (Frank, 2020). This mindset acts without considering the vast opportunities that wise money decision-making can open up, such as investing.

Through a poor mindset, money is not personified or given depth and often drives unnecessary purchases. A great example of a poor mindset is overconsumption—purchasing a new lip gloss that has just been released despite already owning seven others, in the same colour. This is done purely for instant satisfaction rather than out of necessity.

With a poor mindset, there is always the active defiance of how does investing in this instantly benefit me? It shares a quid pro quo relationship with money, often incapable of recognizing the value of passive income and places legitimacy on tangibility.

In contrast, a rich mindset recognizes money as a personified source with longevity and investment potential. It’s what you can do for money, not what money can do for you. The rich mindset seeks self-improvement through money: academically, professionally, or through skill development. It is rooted in collectivism and how we can all strive to win.

An example of this is thinking about all the ways an upcoming pay cheque can be invested rather than hoarded—perhaps into a stock or self-help books to learn a new skill. The rich mindset sees money as a key to a locked door, knowing that whatever is behind it is worth it because money is a tool made to be utilized.

It is fundamentally based on intentional and purposeful spending, often activating our “system 2” decision-making skills: a slow, deliberate, effortful mental process. This contrasts sharply with “system 1” thinking skills that drive the poor mindset: automatic, impulsive, and effortless decision-making (Loo, 2021).

(Decision Lab, 2021)

Money Worship vs. Money Avoidance

For many, money makes the world go round. A money-worship mindset promotes the belief that great riches are the overarching pursuit of life. They believe money inherently comes with value, and it's not something that you assign to it.

Those with the money worship mindset place their happiness on the amount of money they have, carrying the belief that you can never have too much (YMW Advisors, 2020). Money worshippers tend to score high on conscientiousness due to their goal-oriented motivations of achieving the most money they can.

An example of money worship is believing “I would be happier if I were rich.” This reinforces the idea that money alone has the power to promote positive well-being and is the sole determinant of life quality.

Although financial security can relieve a significant amount of personal stress, money worshippers are disproportionate in their belief that money carries the highest form of influence in this cause.

Today, we are in a monetary-obsessed period. We often carry redemptive narratives that promote the message that this financial struggle will all be worth it when I arrive at my riches. This is deceitful, as placing an overreliance on anticipated income growth creates disappointment when it's not successfully attained (McAdams, 2013). 

On the other end of the spectrum, money avoidance often entails the perception that money is bad, promotes evil, and should be avoided in conversation altogether (Cole, 2022). Money avoidants believe the more money you have, the worse it is for you. This explains why many may give away their money so freely—as the less they have, the better they feel.

An example of money avoidance is refusing a salary raise out of fear of being perceived as money-hungry. Even dodging conversations around finances, wages, or income is maladaptive. This preserves an avoidant's mental ease, as placing as little importance on money as possible can help them avoid moral discomfort.

Money avoidance is deemed abnormal; how can someone be opposed to the financial compensation that they rightfully deserve? Money avoidance often stems from early childhood adversities and psychological vulnerabilities depending on the type of money script their family promotes. Early distorted influences and experiences with money contribute to this perception, leading to the evasive behaviours they exhibit in their adulthood.

Money avoidance is most prevalent amongst those who score high on humility-honesty personality. It is all about moral discomfort for them, as they believe placing heavy emphasis on materialism is corrupt in itself. 

So you've discovered your money script, now what?

My personal experience with money has been nothing short of difficult. Some days, I have an abundance mindset, where I recognize there’s enough in this world for us all. On other days, when I want to go on a shopping spree, I equip my poor mindset, rationalizing the purchase of a white shirt that I already have three of in my closet.

Why do I feel more okay spending $25 on a meal but will put down a $25 t-shirt that I know has a more sustainable use? Why am I so okay with spending money on others, but the second I spend money on myself it's a problem? These are all money-scripted behaviours that require cognitive reframing.

We all have the power to retrain our perception surrounding money. Although our scripts can be helpful guides, when they become an instrument of harm, they can deprive us of a prosperous life and healthy relationship with the tool.

For many, spending money on others evokes a serotonin release as a result of pleasing them. For others, saving money wisely prompts a dopamine surge that praises their good decision-making skills. Recognizing the biological reinforcements that belong to these motivations is fundamental in understanding why we embody the money-motivated behaviours that we do.

You tread lightly to avoid financial debt, yet walk away carrying an even heavier backpack of emotional debt instead. This poses one final question: Is your money working for you, or are you working for your money?

References

Burdick, E. (2023, October 23). There will always be more: overcoming Scarcity Mindset. https://www.headspace.com/mindfulness/there-will-always-be-more-overcoming-scarcity-mindset 

Cole, K. D. (2024, April 2). What are the 4 types of money scripts?: Clarity wealth. Clarity Wealth Management. https://claritywealthdevelopment.com/blog/there-are-four-different-money-scripts-which-one-are-you/ 

Frank, T. J. (2020, October 16). The rich mindset vs. the poor mindset. Thomas Frank. https://thomasjfrank.com/the-rich-mindset-vs-the-poor-mindset/  

Loo J. (2021). System 1 and System 2 Thinking. The Decision Lab. https://thedecisionlab.com/reference-guide/philosophy/system-1-and-system-2-thinking 

McAdams, D. P. (2013). The redemptive self: Stories Americans live by (revised and expanded edition). New York, NY: Oxford University Press. 

Your money script: Your mental wealth advisors. Your Money Script | Your Mental Wealth Advisors. (2020).