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Written by: Chris Carnazzo | Your Money Cues
Have you ever done something stupid with your money? Be honest. Did you know better?
My biggest money mistake was letting a six-figure IRA sit in cash… for two years. I definitely knew better, and that part is worth examining.
At the time, I had built two careers around financial competence. In broadcast television, I moved from producer to department head partly because I handled budgeting and operations well. In commercial real estate, I advanced from property manager to asset manager because I could analyze investments and understand risk.
So why did I freeze?
Because the person running the IRA was not entirely the adult version of me.
It was also a ten-year-old.
The Cost of Inaction
Before I get there, a quick thought experiment to show what is at stake.
Imagine a 32-year-old with $100K in the market, earning a long-term average return of roughly 9 percent per year. Under the Rule of 72, the money roughly doubles every eight years.
$100K → $200K → $400K → $800K → $1.6 million
Now imagine that same person waits eight years to invest. They do not just lose time. They lose the last doubling, the most significant one. The leap from $800K to $1.6 million adds more dollars than every doubling before it combined.
The cost of inaction compounds too.
My version was less dramatic. Two years in cash, not eight. The math does not punish me nearly as much, but the question remains.
Why did I freeze?
What Is a Money Script?
According to researchers, most likely because of a money script.
A money script is an unconscious belief about money, formed early in life, that drives adult financial behavior. The research validated four categories (Klontz et al., 2011):
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Money avoidance
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Money worship
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Money status
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Money vigilance
None of them announce themselves. They run in the background, shaping decisions you would swear you made for rational reasons. Sometimes a family hands a script down like an heirloom. Sometimes you catch one sideways, from a friend of a friend or a stranger on social media. And sometimes, it is not so gentle.
Financial Flashpoints
These moments have a name: financial flashpoints.
In Psychology of Financial Planning: The Practitioner’s Guide to Money and Behavior, Brad Klontz, Charles Chaffin, and Ted Klontz define them as “life events (or a series of events) associated with money that are so emotionally powerful that they leave an imprint that lasts into adulthood” (Klontz, Chaffin, and Klontz, 2022).
A flashpoint is essentially a trauma response. The script that follows protects the mind from feeling that kind of pain again.
Most of these moments happen in childhood, when the prefrontal cortex, the part of the brain responsible for judgment, perspective, and abstract reasoning, still has years left to develop (Arain et al., 2013).
A child trying to make sense of the adult financial world does not have much to work with. So the brain grabs whatever raw material is available: fear, shame, a parent’s tone of voice, tension at the dinner table, a comment overheard from another room.
Then it starts building rules.
As Brad Klontz and his coauthors explain, “our childlike brains lack perspective, nuance, and context, and in our attempts to make sense of what’s happening, we can easily draw inaccurate conclusions” (Klontz, Chaffin, and Klontz, 2022).
Without later inspection, those conclusions harden into beliefs that quietly run in the background for decades.
The examples their book catalogs are heavy:
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Growing up poor, where scarcity becomes the lens for every later financial decision
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Growing up wealthy, where money becomes tangled with guilt, loneliness, or shame
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A bankruptcy
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A foreclosure
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The financial chaos after a death or divorce
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Inherited messages about gender, race, or class
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Living through a recession that taught an entire generation what loss feels like
Over time, those moments stop feeling like memories.
They start feeling like truth.
My Financial Flashpoint
Here is mine.
I was ten years old, with a paper route from the Omaha World Herald. I was not an employee. I was a little entrepreneur. I collected subscriptions, used that money to buy the papers, rubber bands, and other supplies, and kept the rest as profit.
That was how I made my money. Not a wage.
The problem started when I spent the money I collected before paying expenses. I covered my costs for a few months using future subscription payments.
A small case of robbing Peter to pay Paul, run by a ten-year-old, on a paper route.
Then it stopped working.
Subscribers complained. The distributor came after me. My dad was the most upset. He had to bail me out for a whopping $80. Big money in 1980s Omaha.
My ten-year-old brain did not encode “manage cash flow better.” It encoded something simpler and more durable.
“You are not good with money.”
That script sat dormant for twenty years. Then I rolled over a 401k, opened a brokerage tab, and it woke up.
Money Avoidance
Looking back, that financial flashpoint wrote my money avoidance script.
Money avoidance is the unconscious belief that money is bad, dangerous, or out of reach. It shows up as guilt about having money, distrust of those who do, or a quiet conviction that you are not good with it. Avoiders usually do not blow themselves up making reckless bets. They freeze. They delay. They avoid the wrong decision by making no decision at all.
That is exactly what a six-figure IRA sitting in cash was.
In 2014, I asked a few friends I trusted for mutual fund tickers. I put the IRA into a couple broad market index funds, like JL Collins recommends in his book A Simple Path to Wealth.
The technical strategy is simple. The nervous system is the hard part.
Simply being in the market felt better than I expected. The first set of returns opened my eyes, not because of the dollar amount, but because nothing bad happened.
That experience helped push me toward a Master’s Degree in Financial Planning.
Scripts Can Be Rewritten
When I was in grad school, I took the Klontz Money Script Inventory Revised (KMSI-R), a measurement tool that uncovers money scripts. By this point, my dominant script was money vigilance.
Money vigilance is the watchful saver script. Vigilants stay alert about money, save conscientiously, keep their finances private, sometimes to the point of secrecy, and worry about losing what they have. The posture inverts avoidance. Vigilance pays attention. It does not freeze.
Vigilance is also the one script the research links to better financial outcomes. It is the only one that offers protection against bad money decisions. But it can be taken too far. The classic literary case is Ebenezer Scrooge, whom Ted Klontz, Rick Kahler, and Brad Klontz used as the central case study in The Financial Wisdom of Ebenezer Scrooge, a portrait of vigilance pushed all the way to damage.
Same family of unconscious beliefs, different surface behavior. The avoidance script did not disappear. It evolved.
That matters because most people think money scripts are permanent personality traits. They are not. You can recognize a script, challenge it, and slowly rewrite it.
Naming it changed it.
Coming Next
In the next piece, I will look at how these scripts leak out through facial expressions, body language, and vocal tone, often before someone says a single word about money.
Related: The Overlooked Connection Between Financial Planning and Emotional Well-Being
References
Arain, M., Haque, M., Johal, L., Mathur, P., Nel, W., Rais, A., Sandhu, R., & Sharma, S. (2013). Maturation of the adolescent brain. Neuropsychiatric Disease and Treatment, 9, 449–461.
Collins, J. L. (2016). A Simple Path to Wealth: Your Road Map to Financial Independence and a Rich, Free Life. JL Collins LLC.
Klontz, B., Chaffin, C. R., & Klontz, T. (2022). Psychology of Financial Planning: The Practitioner’s Guide to Money and Behavior. Function.
|Klontz, B. T., Britt, S. L., Mentzer, J., & Klontz, P. T. (2011). Money beliefs and financial behaviors: Development of the Klontz Money Script Inventory. Journal of Financial Therapy, 2(1), 1–22.
Klontz, T., Kahler, R., & Klontz, B. (2006). The Financial Wisdom of Ebenezer Scrooge: 5 Principles to Transform Your Relationship with Money. HCI Books.