Excerpt: 'The Financial Wisdom of Ebenezer Scrooge'

Through the process they've used successfully with their clients, Ted Klontz, Brad Klontz and Rick Kahler have penned "The Financial Wisdom of Ebenezer Scrooge: 5 Principles to Transform Your Relationship With Money" to help with your financial woes.

Hailed by the Wall Street Journal as "an innovative effort that combines experiential therapy with nuts-and-bolts financial planning," the book provides a practical plan for achieving financial wellness.

While Scrooge may seem to be an odd source of financial wisdom, the book focuses on your relationship with money and how to improve your money behaviors by using the five essentials of financial prosperity.

Read an excerpt of the book below.

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 new car. He threw a big party, bought new clothes and gave money away. Within months, he was back in the same predicament. This is not an isolated example. Dave Ramsey, a nationally syndicated radio talk-show host, author and founder of Financial Peace University, has cited statistics showing that within seven years of coming into money, the average person, like Carl, will be living at the same economic level as they were before the windfall appeared.

This behavior seems incredibly destructive, yet it makes sense to the person whose money script is "I deserve to spend money on myself." Having that money script creates the same consequences that would have occurred if the person had made a conscious decision to be poor.

Money Scripts Are Generational

Frequently, our money scripts are passed down through the generations. When people carefully explore their family histories, clear and profound patterns of financial behaviors often emerge. With close examination of our multigenerational family stories, we are able to identify the money scripts driving the actions of our ancestors. Many of us live our financial lives unaware of how powerfully our beliefs around money are linked to the specific experiences of our ancestors. As such, they continue to affect us today, long after their adaptive and functional aspects have lost their benefit.

In our work with clients, we still see in today's forty- to sixty-year-olds the lessons their parents and grandparents learned during the Great Depression. Hiding money, hoarding money, not trusting banks or investment institutions, and poverty thinking are behaviors that still plague the children and grandchildren of family members traumatized by those economic and social experiences.

Younger clients suffer from other thinking distortions. One father told us of his uneasiness as he handed his eight-year-old daughter her twenty-dollar-a-week allowance. He sensed that the amount was too much, but he didn't want her to feel different from the other kids in the neighborhood whose parents gave their eight-year-olds that amount.

Another parent told of his distress in realizing that his seven-year-old had no idea where money comes from or what is involved in acquiring it. He learned this when he told her she could not have something she wanted because there was no money for it. Her response was, "Daddy, just go to the wall and get some." She had learned that money comes from "the wall," better known to adults as an ATM. In fact, we have worked with a number of clients who tell us that one of their beliefs is that "Money is not real." Since it is not real, then there is nothing to deal with.

Money scripts and their consequences, such as the ones we have mentioned, are much more of a potential problem than ever. Two generations ago, if you got a good job, worked hard and were a loyal employee, at the end of twenty-five, thirty or forty years of service, you received an adequate guaranteed retirement. That, along with Social Security, would pretty much guarantee you would have sufficient funds for the rest of your life. Now, however, both corporate America and the Social Security system have changed radically. Fewer companies offer defined benefits retirement plans. Fewer employees choose or even have the option of lifetime employment. And the Social Security system is bending and threatening to collapse under the weight of too many recipients, too few contributors and the extended life spans of the beneficiaries. Given this reality, old money scripts and their resulting behaviors can be disastrous.

Knowledge Is Power

The following sections examine the money scripts driving Scrooge, Cratchit and many people today. Armed with this knowledge, you'll be ready to begin recognizing at least some of your own money scripts. In some cases, awareness, along with a commitment to change, is enough to change behavior that is being driven by an unconscious belief and can help clear the way for conscious beliefs to move into the driver's seat.

Scrooge Chose to Be Poor

As we've mentioned, despite his great wealth, Ebenezer Scrooge unconsciously chose to be poor. Of course, if the definition of poor were measured solely by one's bank account, Scrooge would certainly not fit that definition. On the other hand, if you define poor as a measure of the quality of one's physical environment, emotional health, relationship quality and lifestyle, then Scrooge would certainly qualify as poor. Scrooge's excessive hoarding created an impoverishment as real as any caused by financial distress. Ironically, Scrooge's money scripts created the very poverty and isolation that Young Scrooge had so desperately tried to avoid.

• As an apprentice under Fezziwig, Young Scrooge had to sleep under a counter at the warehouse. As an adult, Scrooge lives in a dreary old apartment that was as cold and sparse as a warehouse.
• As a child, Scrooge spent the holidays alone at the warehouse. As an adult, Scrooge spends the holidays alone in his rooms.
• As a child, Scrooge was poor. As an adult, Scrooge lives a meager existence, eating sparingly and barely heating or lighting his tiny dwelling.

Scrooge lived in a poverty created by his own beliefs and behaviors around money.
Scrooge's Money Scripts As we observe Scrooge's behaviors, we can begin to see the money scripts that drove them. These are just a few of

Scrooge's money scripts:

• You can't trust anyone with your money.
• People only want you for your money.
• You must work hard for money.
• You can never have enough money.
• Don't spend money on yourself or others.
• Money will give you meaning in life.
• The more money you have, the happier you will be.
• You can never be happy if you are poor.
• Giving to the poor encourages laziness.
• If you had more money, things would be better.

Scrooge was living in harmony with what he believed to be true. Unfortunately, many of his beliefs about money were distorted half-truths. As a result, he was living a life full of pain and loneliness and devoid of love.

Your money scripts could be keeping you financially, emotionally or spiritually poor.

Similarly, your money scripts could be the reason you are in debt, facing bankruptcy and living in deprivation. Your money scripts could be sabotaging your quest for the American dream, your retirement, your children's education and your financial security. Even if you have significant wealth, your money scripts could be destroying your peace of mind, relationships, happiness and sense of fulfillment.

Cratchit Chose to Be Poor

One could argue that Bob Cratchit, Scrooge's loyal clerk and father of Tiny Tim, was a victim of circumstance. He was trapped in an abusive socioeconomic system that didn't allow the less fortunate individual to advance. On the other hand, we would argue that Cratchit's unconscious money scripts contributed to his poverty. He didn't truly appreciate his own talents and skills. He undersold himself. He spent impulsively when he could have bought medicine for his son. He didn't know what steps to take to plan for his own future. In effect, it's possible that Cratchit made an unconscious decision to be poor.

Cratchit's Money Scripts

Bob Cratchit is often characterized as the eternal optimist, always finding the silver lining in a bad situation. But careful analysis of his behavior reveals there's far more to his personality.

Bob Cratchit also has his share of money scripts. Although Dickens never tells us the nature of Tiny Tim's illness, we know that it is treatable. Yet Cratchit spends his money on a goose for Christmas dinner instead of buying medicine for Tiny Tim—a classic example of binge spending.


In today's dollars, Bob Cratchit's Christmas dinner would have cost about $500. His spending for Christmas dinner was considered so extravagant that in some early stage adaptations, the goose becomes a surprise gift from Scrooge's nephew, Fred.

Cratchit stays in a minimum wage job working for Scrooge when he might have found better employment elsewhere. Rather than even thinking about improving his situation, Cratchit stays stuck and unaware of his choices. Even when his family mocks Scrooge, Cratchit defends and protects him. He accepts his miserable existence as his destiny.

Let's look at a few of Bob Cratchit's possible money scripts:

• There will never be enough money.
• Money is to be spent, not saved.
• You'll be paid what you are worth.
• You can never be happy if you are rich.
• If you are good, the universe will supply your needs.
• You don't deserve money.

It's easy to see how Cratchit's unconscious money scripts, as we have defined them, keep him stuck in the role of a victim, trapped in poverty. His family supports this belief by reinforcing that Scrooge was the problem, not Bob.

It's easier to be a victim than to change one's behavior.

Money Scripts and the Truth

One reason that some money scripts are so difficult to change is that, like the broken clock that's accurate twice a day, a money script that is dysfunctional in one situation can be functional in another. The fact that most scripts are valid part of the time makes it harder for people to recognize that they may be applying the same money scripts inappropriately. In other words, sometimes "true" is not always true.

For example, if you were approached by a con artist promoting a get-rich-quick scheme, a money script of "trust no one" would prevent a disastrous money mistake. The problem arises when you apply that same script to a scrupulous financial planner, attorney, accountant or even your spouse. That's like an actor playing the same role, regardless of whether the movie is a comedy, drama or adventure. The role needs to change to fit the situation. It's the same with money scripts.

Paul, for example, believed that "being in debt is like being in prison." Understanding that debt is a significant obligation is important. Because this script was so entrenched within him, however, Paul was never able to buy a home for his family because he could never save enough to pay cash for it. As a result, he and his family had lived in a series of rented apartments and homes for over twenty years, actually spending more on rent payments than he would have on house payments if he had taken out a loan. Even when loan rates were the lowest they had been in over fifty years, Paul could not take advantage of this favorable financial opportunity because he "didn't want to go to prison."

Of the eighty or more money scripts Kate identified for herself, the one that was "absolutely true" was "the only thing a parent can give a child that can't be taken away is an ­education at a private school." The tuition to send Kate's children to private elementary and prep schools consumed over 20 percent of her family's income. Still, Kate was driven by this money script, although the public schools in her area were above average, her children said they would prefer to go to public school and her graduating son had received a full scholarship to a state university. Kate and her husband were spending so much on the children's education that there was no money left for them to save for their retirement or even pay the interest on their mortgage. Kate's dream of improving her employment situation by obtaining a much-needed master's degree was completely shelved.

While it appears obvious to you and me that Kate could not afford private schools and that Kate's children would probably not suffer significantly by attending public schools, she was unable to see it any other way.

Same Money Script, Different Manifestations

You'd think that the same money script held by two different people would lead to the same behaviors for each person. Interestingly, as we saw in Brenda's case, it does not. Behaviors can vary widely depending on how a money script manifests itself. For example, consider the money script "If only I had more money, I would be happy."

To obtain money, and thus happiness, some people might turn into workaholics. Others might become obsessive underspenders or hoarders. Some might turn to unethical or illegal actions. Some might turn to gambling. Others might take excessive risks with their money, chasing get-rich-quick schemes. Others, sensing they will never be able to have enough, may become chronically underemployed and feel hopeless and depressed. Whatever is desired—fulfillment, happiness or security—will always remain just out of reach.

On the other hand—and only up to a point—having more money can open up more opportunities and create more happiness and fulfillment in someone's life. Research has shown that there is a direct correlation between income and happiness until a person reaches an income of $50,000 annually. Above that threshold, however, there is no significant increase in happiness as earnings rise.

Common Money Scripts

Unconscious money scripts and the behaviors they engender are sabotaging the goals and dreams of many.

Walk through a mall on any weekend. You'll see people buying things they really don't need and they probably can't afford. Others stay in jobs they hate because they convince themselves "It can't get any better than this for me." Consider Charles.

Charles has worked in public education for thirty-five years and complains about the lack of personal challenge and mistreatment by the system. Though he grumbles constantly, he resists all opportunities to understand his options and alter his fate. This resistance is unconscious on Charles's part. He cannot see how the skills he's developed over his thirty-five-year career are transferable to other careers. He thinks others can make such a transition, but he cannot. When we suggested that such a change would be possible, and that, in fact, one of us had done so coming out of the same profession, his response was "Maybe you can, but not me."

Nor is wealth an inoculation against destructive money scripts. We consistently see wealthy people who are trapped by their money scripts. One common mistake they make is trying to buy fulfillment, whether by buying the newest luxury car or fashion, or by giving too much to friends, relatives or children. Another of the wealthy's self-destructive money scripts involves guilt over having wealth when others don't. One of our client couples told us that they feel shame when they are around peers who are wealthier, because they haven't done well enough, and they feel guilt around people who have less than they do. The only people that they feel comfortable with are those who have about the same amount as they do, giving them a relatively small and limited number of choices.

People acting on their unconscious money scripts are ubiquitous. Look at how your parents, your friends and even your own children behave around money. You'll see obvious mistakes. Why do people continue behaviors that are so harmful to themselves and their loved ones? Why can't they see their mistakes? Why do they behave so irrationally? What drives these obviously destructive behaviors? Why are these money scripts so powerful? To find out, let's analyze some common money scripts.