UNDERSTANDING THE PSYCHOLOGY BEHIND YOUR FINANCIAL CHOICES
- Derek Hagen
- Oct 9
- 3 min read
❝Every financial decision makes perfect sense when we understand our underlying beliefs, our money scripts.❞ -Rick Kahler
Your past experiences shape what you believe and how you behave with money.
WHY WE DO WHAT WE DO WITH MONEY
We’ve all had moments where our money choices didn’t make logical sense.
Maybe you’ve put off making an important financial decision for too long.
Maybe you’ve spent money you didn’t plan to, even when you knew better.
Or maybe you’ve struggled to enjoy what you’ve earned: saving obsessively but finding it hard to spend.
It’s easy to call these behaviors “bad habits” or “mistakes.” Financial psychology offers a different view: our choices make sense when we understand why we make them.
If you're interested in values-based financial planning, here's how to work with a Money Quotient-trained financial life planner.
Every financial behavior—spending, saving, avoiding, giving—is rooted in the stories and beliefs we’ve built over time. Those stories aren’t random. They were shaped by experience.
WHAT FINANCIAL PSYCHOLOGY REALLY MEANS
Financial psychology is where money meets emotion. It explores how our experiences, families, and culture shape the way we think, feel, and act around money.
You can think of it as the emotional side of personal finance. While traditional finance focuses on what to do, financial psychology focuses on why we do it.
Your earliest memories of money—how your parents talked about it (or didn’t), whether money was a source of security or stress—helped form your current beliefs. And those beliefs quietly guide how you spend, save, and share today.
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Money Scripts® are subconscious beliefs we have about money that we learn these we are growing up in our family systems. A Money Script can be anything, but they tend to fall into four categories. Learn what categories your Money Scripts fall into. |
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EXPLORING YOUR OWN MONEY STORY
Understanding your relationship with money isn’t about judgment—it’s about curiosity.
Here are a few ways to start exploring your own “money psychology”:
Notice your emotional triggers. What situations make you anxious about money? What brings relief or pride? Emotions are clues to deeper beliefs.
Identify your money scripts. These are the hidden rules we learn early in life—like “debt is bad,” “money equals freedom,” or “I’m just not good with money.” Which ones sound familiar?
Ask where they came from. Most of our beliefs made sense once. Maybe being frugal kept your family afloat. Maybe generosity helped you feel connected. Those lessons worked then—but they may not fit your life now.
Write your biography. Reflect on your earliest money memories. Who influenced your beliefs? What lessons still shape you today? Seeing your story on paper can bring surprising clarity.
FROM AWARENESS TO INTENTION
You can’t change what you don’t notice.
Financial psychology helps you see the patterns beneath your choices so you can decide which ones still serve you, and which ones don’t.
Your money story isn’t fixed. It’s evolving. And once you start understanding why you do what you do, you gain the freedom to make new choices... ones that reflect not just your past, but your priorities and values today.
Because every decision makes sense once you understand the story behind it.
You get one life; live intentionally.
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REFERENCES AND INFLUENCES
Ariely, Dan: Predictably Irrational
Ariely, Dan & Jeff Kreisler: Dollars and Sense
Clements, Jonathan: How to Think About Money
Klontz, Brad, Rick Kahler & Ted Klontz: Facilitating Financial Health
Klontz, Brad & Ted Klontz: Mind Over Money
