The Financial Wisdom of Ebenezer Scrooge: 5 Principles to Transform Your Relationship with Money - Softcover

Über die Autorinnen und Autoren

Ted Klontz, Ph.D., is the President of Klontz Coaching & Consulting (www.klontzcoaching.com) and a noted pioneer in bending the fields of psychotherapy and financial planning. He is a speaker, workshop leader, and has an active private coaching/consulting practice. Ted has been a contributor and coauthor of a number of books, including Chicken Soup for the Recovering Soul and Facilitating Financial Health. His work has been featured in Wynonna Judd's best-selling book Coming Home To Myself, and he has been a guest on Today and Naomi's New Morning on the Hallmark Channel. 

Brad Klontz, Psy.D., is the 2008 President of the Hawaii Psychological Association. He is a licensed clinical psychologist, speaker, researcher, consultant, columnist, and personal coach. The CEO of Klontz Coaching & Consulting (www.klontzcoaching.com), Brad has been published in numerous professional journals. He is a leading expert in the psychology of money whose work has been featured on NPR and in the Wall Street Journal and Washington Post. He is the coauthor of Facilitating Financial Health and the creator of the Financial Health Scale. 

Rick Kahler, CFP®, MS, ChFC, CCIM, launched his professional career in real estate at age eighteen and went on to earn a master's degree in personal financial planning. He founded Kahler Financial Group in 1981 and became South Dakota's first fee-only financial planner in 1983. Between 1998 and 2003, he served as a member and then chairman of the South Dakota Investment Council. He oversaw a six-billion-dollar portfolio and was widely recognized for making exemplary strides in a time of unprecedented market volatility.

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1
Money Scripts
The
Beliefs Behind
the Behaviors

If you bring forth what is within you, what you bring forth will save you. If you do not bring forth
what is within you, what you do not bring forth will destroy you.
—The Gnostic Gospel of St. Thomas

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As warped as Scrooge's behavior may seem, his actions make perfect sense when viewed in the context of his beliefs about money. Several hidden beliefs are at the root of Scrooge's misery. For example, Scrooge believed 'You can't trust anyone with your money.' He didn't even trust his loyal clerk, Bob Cratchit. We can see this clearly in the first chapter of A Christmas Carol:

'The door of Scrooge's counting house was open
that he might keep his eye upon his clerk.'

Scrooge also believed that you 'Don't spend money on yourself or others.' He lived this belief to the extreme. He barely heated his office and lit his sparse apartment with a single candle:

'Darkness is cheap, and Scrooge liked it.'

These and other similar behaviors certainly appear severe, but not when you look at his perspective of the world. In view of these underlying and mostly unconscious beliefs, Scrooge's actions are perfectly logical, at least from his perspective. In our work, we have come to believe that every financial behavior, no matter how seemingly illogical, makes perfect sense when we understand the underlying beliefs. Scrooge's excessive behaviors merely reflected what he believed to be true.

We call these powerful beliefs money scripts.

Money Scripts

Very early in life, people begin to internalize messages about money's purpose—how it works, what it promises, its overall significance—and develop their relationship to it. Since children can't fully grasp adult reality, they translate what they see and hear into unconscious rules about life, including any internalized messages about money. These messages about money, or money scripts, don't necessarily reflect reality from the adult perspective. Instead, they may represent only a distorted or partial truth as seen through the eyes of a child. As children grow into adulthood, they often behave as though these partial truths are absolute truths. They may find themselves unable to change destructive behaviors that, at a very basic level, somehow feel right and make perfect sense.

Think of a money script like the script for a play with several roles in it. The script is written by one person, and a specific role in the script is memorized by another person—an actor who plays one character in that particular play. If the actor memorizes the script and executes his lines well, the result will be exactly what the playwright intended. However, if the actor attempts to use the same script for any other role, or in any other play, the results will be disastrous. It is the same with money scripts.

To learn their lines, actors must repeat them over and over. Few actors, no matter how talented, can read a script once and then deliver a flawless performance. They must practice frequently. In a similar way, the depth of any money script depends on the frequency and intensity of the original event or financial trauma. A child who hears his mother voice concern once about how the family business may fail and that they may not have money for food will probably not internalize a damaging money script. However, if the child hears his mother voice that fear monthly, weekly or daily, the result could be a deeply held belief that will influence the child's behavior well into adulthood. Our deepest, most ingrained money scripts are often formed by such examples of financial trauma.

For example, when Brenda was eight years old, she, unlike the rest of her siblings, saved her money. When the rest of the family needed money, they robbed her piggy bank.

Sounds sad but innocent enough, right? But little Brenda internalized the same message that Scrooge internalized: 'You can't trust anyone with your money.' This worked for both Scrooge and Brenda as children. However, as adults, the results of this money script didn't work for either of them—although the results for Brenda were very different from Scrooge's.

As an adult, Brenda earns $250,000 a year. She needs only $100,000 to support her preferred lifestyle, but she spends the entire amount each year. She doesn't use many of the things she buys. She spends all of her money rather than saves or invests it because of an unconscious fear that others will take it away. This old belief is reinforced when her parents and siblings frequently call and want her to bail them out of some financial dilemma. By never having any money in the bank, she can say no when her siblings ask her for money. Unfortunately, spending money as quickly as she gets it makes her just like them—always broke.

Money scripts internalized in childhood
can affect our beliefs and behaviors
well into adulthood.

Why Money Scripts Are So Powerful

Brenda's belief, originating from a child's perspective of an experience, created a money script that is still affecting her today. Brenda's subconscious belief is keeping her from achieving success. She neglects to save for her future. So, while she is enjoying the fruits of her labors, her inability to say no to her family and her failure to save jeopardize her financial future. Worse, because it is mostly unconscious, Brenda isn't even aware that this money script is sabotaging her career goals and dreams for her own family. Instead, she feels a vague sense of dissatisfaction and failure because she knows she should be saving and investing for her future, but can't.

When we met Brenda, she thought the answer to saving money was to earn more; then she could save. The problem was that she had been saying the same thing to herself as she moved up the salary scale from $50,000 to $100,000 to $150,000 to $250,000. To us, it was obvious that the solution lay elsewhere, in her basic money script.

People are generally unaware of their
money scripts and how their self-defeating behaviors are linked to them.

Often, these messages learned during childhood are buried so deeply that the individual doesn't know about or question the belief, even when acting on it causes him or her repeated problems.

It is important to understand that money scripts are not inherently good or bad, right or wrong. Certain money scripts can serve us well when applied to the appropriate financial circumstance. However, money scripts can become a problem, even become destructive, when they are applied to inappropriate financial circumstances.

For example, have you ever met anyone with this money script:

'I deserve to spend money on myself.'

Now, believing you deserve to spend money on yourself is not inherently bad. In fact, it can be very positive. We hope you believe this to be true. Many people do not share this belief, but we all deserve to take care of ourselves. Never­theless, believing you deserve something extravagant for your­self today at the expense of saving for tomorrow can undermine your financial well-being.

Moreover, believing that you deserve to spend money on yourself to the point that you feel entitled to do so regardless of your circumstances can also be destructive. Professional credit counselors tell us that this is a typical money script among people with excessive debt. Some of their stories of money mismanagement are incredible.

Carl had serious credit problems. Quite unexpectedly, he received a windfall inheritance. He could have used it to pay off his debt. He could have saved it. He could have used it to rebuild his life. Instead, he bought a...