Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Are your money scripts holding you back?

Learn how our parents’ and grandparents’ attitudes towards money can shape how we feel about trading and investing.

Reading time: 5 minutes

Trading level: Intermediate


Are your money scripts holding you back? Source: Shutterstock

Money scripts are often inherited from your parents and grandparents. It’s like the script written in a play that has been passed down to you. Your money scripts can guide your financial outcomes and specifically influence important decisions around money. These scripts are usually subconscious and can have an impact on your behaviour, even though you may have no idea that they exist within you.

The way you talk to yourself about money can assist or detract from the way you perceive your results as a trader. The language you use around money, and your self-talk in this arena is often contextually bound, and only partially true.

According to the Klontz Money Script Inventory, there are four potential, common money scripts that you might be experiencing1.

Money Status

Money Status traders are likely to spend more than they can afford and want the visually striking signs of wealth that they think others will admire. They may take excessive risks in the markets and might hide their losses from their spouse or partner because they believe it would make them lose face. Often from a lower socioeconomic background, they may believe that if they live a virtuous life, the universe will reward them financially.

Money Worship

Money Worshippers feel that the solution to all of their problems is to have more money. They feel that they never have enough money, and they may put their work ahead of their family. An attitude of scarcity is prevalent. Lower net worth individuals are more prone to have these scripts and it’s possible that they often make upward and downward comparisons with their peers.

Keith Payne, author of The Broken Ladder, says: “Inequality does a few different things to the way that both your minds and your bodies respond. One is that it makes us focused on the short term. It makes us impulsive, focused on the here and now. And it makes us more willing to seek out risks and engage in high risk, high reward, sort of gambling behaviours. It also affects our bodies in ways that are similar to physical threats”.

You can imagine how this view can affect traders. Comparing yourself to others, and trying to be flashy with your purchases, and possibly bragging about your trading sounds like a recipe for angst.

Money Vigilance

Money Vigilant traders are hyper alert in relation to their financial health. Having money makes them feel safe, but it can also mean that they have trouble enjoying the fruits of their labour. Traders with these money scripts feel they need to work for money, they spend what they can afford, and they value a bargain. They rarely keep financial secrets from their partners – however, their focus on saving and frugality can create rifts. If you believe you should be going to a caravan park for a holiday, while your partner would prefer a first-class trip to Paris, there are bound to be some arguments.

As traders, this can mean that you don’t get to have fun when you make money in the markets. If, as a reward for work, your subconscious only allows you to work more… you may be on a path to burnout.

Whilst much of the research involves personal money scripts, how it impacts those around you is also of particular interest. Mismatched money scripts within families, or within a partner context, can explain a lot of initially confusing behaviour in those around you. Understanding yourself, as well as the actions and behaviours of those you associate with is a focus when developing psychological fitness.

Money Avoidance

Money avoidance is often a characteristic of wealthier, well-educated traders who unfortunately, at their core, believe that money is bad. They also may feel that they do not deserve money, and that wealthy people may be greedy or corrupt.

Traders brought up in a religious environment may also struggle with the question of ethics. Is it OK to be a trader? Is there a higher level of nobility in suffering and being the revered ‘battler’ who is almost worshipped within so many cultures?

Self-sabotage is common when their bank accounts go above a level that feels comfortable to the individual trader. People with these money scripts may ignore their financial and trading statements, give money away, and unconsciously want to have as few possessions as possible.

Why is it important?

As a trader, if you’re not aware of your own money scripts, you can be side swiped by them. You will need to come to grips with these issues in order to develop trading prowess. Money doesn’t change people - it only amplifies their natural predisposition. If it is in your nature to be kind and good to your fellow man, then money will assist you in this goal. Your contributions to charity can be more significant.

Without understanding your own money scripts, you may act in a way that damages your trading account.

According to research in the financial planning field2, even some of the most diligent clients “hesitate, fail to act, or simply do not take the agreed upon action to implement planning recommendations.”

It’s evident that making positive behavioural changes isn’t easy. If those changes are out of line with that individual’s money script, then it’s more than likely resistance will be observed.

However, if you can understand your own resistance to following effective trading practices, this may give you an insight into your own behaviour. Identifying possible areas of trading that are likely to conflict with your own personal money scripts may enable you to find ways to overcome any maladaptive behaviour.

There are so many things to be fearful of in the financial markets. Fear of taking a loss, fear of learning a new skill, fear of failure, fear of what others think of your decisions - the list goes on and on. When you’re under threat, you often turn to unconscious habits to get through. To be successful in the financial markets you must understand these fears, change any harmful habits and strive to achieve trading excellence. To quote Lao Tzu (born in 604BC and known as the Father of Taoism), “Conquering others requires force, conquering oneself requires strength”.


This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

IG Academy - Learn at your own pace

Choose from a huge range of resources, designed to help you learn however – and wherever – it suits you:

  • From beginner to advanced
  • Learn at your own pace with step by step courses including videos, interactive exercises and quizzes
  • Hear from experts in live and on-demand webinars