Craig Bowen 
Anyone considering growing their wealth through multiple means knows there is a psychological aspect to saving and building wealth. Several psychological biases inform an individual’s financial decisions. People can follow rules to trick their brains into building wealth consistently over time.
What are “money scripts,” and why do they matter?
Brad Klontz, a financial psychologist, author, and professor, first introduced the concept of “money scripts” in public discourse. Klontz stated that people form beliefs regarding money as they grow up and become adults. These “scripts” are shaped by one’s friend circle, the people one looks up to, and upbringing. A person’s money script can fall into one of the following four broadly defined categories:
- Money avoidance: If someone’s money script is “money avoidance,” they generally avoid thinking about money because they equate it with qualities like greed, corruption, or evil. They might find it difficult to read financial statements, plan for the future, or budget consistently.
- Money worship: This money script applies to people who believe money solves all their problems. They tend to spend money to buy happiness. This money script is generally associated with excessive generosity.
- Money status: If one links money to social status, their money script is likely “Money Status.” An individual with this money script may also believe that people with wealth are happier than those who have a lower socio-economic status.
- Money vigilance: If one’s money script is “money vigilance”, they generally save high amounts and spend only on what they can afford.
How do we build wealth by overcoming psychological barriers?
Follow these steps to build wealth consistently by overcoming all psychological barriers:
- Choose a financial goal and note it down: Doing so can help individuals determine their savings target amount and work towards achieving it in a disciplined manner. An example of a financial goal could be – “saving for my higher studies in the UK in 2026.”
- Add a time frame to the financial goal: In the example cited in the previous point, a time frame was specified. It’s a very important part of a financial goal.
- Open an online savings account: Open a digital account with a high interest rate. Before applying for a savings account, one should also assess the bank’s customer and mobile banking services.
- Automate one’s savings: After opening an online savings account, try to save a fixed monthly amount by automating it. For instance, if an individual decides to save ₹6,000 monthly, they can automate these savings so they get deducted from their account at the start of the month.
- Invest and re-assess one’s portfolio regularly: Investing in securities based on one’s risk appetite and liquidity-related preferences is prudent. They should keep re-assessing their investment portfolio to make better investment decisions.
People can use the tricks mentioned in this article to grow their savings consistently monthly. Before starting their saving journey, it is advisable to analyze one’s money script and take steps to reduce the impact of biases hindering one’s saving habits.
