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Our money beliefs help to determine our net worth and our net income, according to a new study published in The Journal of Financial Therapy. The study, conducted by financial psychologist and author Dr. Brad Klontz, identifies patterns of beliefs that are associated with wealth. He examined the money scripts of more than 400 people and identified three categories of money beliefs that are associated with lower income and lower-net-worth individuals.
If you see yourself in one of the three categories below, Dr. Klontz says it's a wake-up call and time for some introspection. People who hold the following beliefs have less money than the people who don't. Holding onto these limiting beliefs won't set you up for wealth.
Money Worship
If you believe that more money equals more happiness, and more possessions make you complete, this is your category. Dr. Klontz says this worship of money persists despite the fact that there is no correlation between money and happiness above an income of $75,000 per year. The belief that more is better can lead to workaholism and, ironically, lower income and lower net worth. We set arbitrary targets for more money and more stuff, believing they will bring us meaning and security. The problem occurs when we hit our goal and the intended payoff isn't there. We fail to realize happiness comes more from our experiences and our relationships.
Money Avoidance
If you believe that rich people are greedy, that you don't deserve more, or that money corrupts people, you fall into the money avoidance category. Dr. Klontz says these beliefs are rooted in low self-esteem or childhood experiences where money was misused or misunderstood. The solution for those who continually run anti-wealth statements in their heads is to take note every time a negative belief comes up. Take note and switch your thinking. Realize that money is simply a tool that can be used for good as well as evil.
Money Status
If you believe that your self-worth equals your net worth or money is what gives life meaning, this is your category. Dr. Klontz says individuals in this category are more likely to take excessive risk to chase a win, or slip into despair and give up if they fail. Either action is harmful to your financial health.
If we change our beliefs, we will have better financial results, according to Dr. Klontz. After identifying your money beliefs, ask yourself where they came from and whether they are helping or hurting. If you're not where you'd like to be, they're probably hurting. If you're not sure, dig deeper with your money beliefs. Dr. Klontz says he asks the individuals in the money worship category to visualize how life really would be different with more money. It usually debunks the whole idea.
Angela Self is one of the founders of the Smart Cookies money group.