Delivering the Systems and Expertise You Need to Confidently Make Great Hiring Decisions
As I was browsing through the Sunday paper last week there was one article in particular that really caught my eye. It was written by Paul Sullivan of the New York Times and it shared the findings of a new academic study Money Beliefs and Financial Behaviors: Development of the Klontz Money Script Inventory published in the current issue of The Journal of Financial Therapy.
Disclaimer: this is a heavy blog post but if you finish it I think you’ll understand why I found it compelling enough to share with you as a Hiring Manager.
He found that some people were under stress about having too little money while others were anxious about losing what they had or felt guilty for having so much. Some people immediately disliked anyone with money, while others would spend their money immediately without regard to the future.
The Klontz study asked 422 people about 72 money-related beliefs and then analyzed correlations among the answers. This produced four broad categories that Klontz called “money scripts”: money avoidance, money worship, money status and money vigilance.
- Money Avoidance: people who may be worried about abusing credit cards. They may believe that they do not deserve to have money and may sabotage their own financial well-being. People in this group tend to have low incomes and net worth. They also tend to be younger.
- Money Worship: the opposite of those with avoidance, but their behaviors are equally destructive. They believe that an increase in income or a windfall will make everything better and love the status derived from the things money can buy. This belief also lands people in debt because they use whatever credit they have to buy things that will impress others. “They believe money will solve all of your problems,” Klontz said. “This is the money belief pattern that afflicts the majority of Americans.”
- Money Equals Status: occurs when people’s self-worth is linked to their net worth. These people often take bigger financial risks because they want to have the stories of big gains to impress their friends. (Don’t expect them to tell you when those big bets do not pay off.)
- Money Vigilance: The only affliction that did not have an overwhelmingly negative impact on people’s financial future. People with this disorder do not like to share information about their income or wealth, but they also do not spend foolishly. Still, excessive wariness about spending can keep these people from enjoying the benefits of what money can buy. On the other hand, while they did not necessarily have higher incomes, they paid off their credit card bills each month. “Maybe some anxiety and vigilance around money is good for your bottom line,” Klontz said.
As Mr. Sullivan insightfully pointed out, “Not surprisingly, the four money scripts illustrate problems that have less to do with money than with what money represents.”
Most of the people in the study identified themselves as “middle class” during their developmental years. Another common thread was how people remembered a financially traumatic moment in their life. Klontz described a case in which a family was beset by debt and about to lose its house. In one case, the grandmother bails out the family. In the other, the family figures out a way to keep the house on its own. The outcome is the same, but the takeaway can be different.
“If grandma swoops in and saves the day, you could walk away from that thinking that you don’t need to worry about money,” he said. “Or where there was a lot of talk about losing the house, that could impact you so you live your life afraid of losing everything.”
What I found most interesting for you as a Hiring Manager was this: One of the goals of the study was to use the results to create a test that therapists and financial advisers could use to quickly understand their clients’ beliefs about money. Klontz estimated that administering the test could save therapists hours of conversation and help them understand how a patient came to a particular belief about money.
Conclusion: if someone you’ve got on your team grew up in an environment where their parents demonstrated destructive behaviors but got bailed out, don’t be surprised when that employee misses deadlines and expects someone else to jump in and save them.