The lessons you learned in childhood about money could turn your financial life into a tragic tale. But don’t despair. You can just as easily have a happy ending by rewriting your money story. First you have to explore how your beliefs about—and attitude toward—money developed…

How We Write Our Money Stories

It’s no secret that different people handle money in different ways. Some focus on saving…others on spending. Some are driven to earn as much as possible…others put maximizing paychecks low on their list of priorities. Some share money freely with loved ones and charities…others hate to give away a dime. What’s widely misunderstood is why people have their money habits. 

Despite what many people assume, it usually isn’t a matter of common sense or character—spenders are not necessarily less responsible than savers, for example, and people who give generously to charity are not necessarily more compassionate than those who don’t. 

The way people interact with money often stems from the stories they tell themselves about what money means—perceptions and assumptions that tend to be oversimplifications at best and totally inaccurate at worst. Examples of possible stories: “Money is the source of happiness”…“Money is the root of evil”… “Money is the most meaningful measure of self-worth”…“Money is the only true source of security.” 

Usually people tell themselves the same money story or group of stories their whole lives—often beginning in childhood, formed by the financial lives and attitudes of their parents or by a specific money-related life event, such as a major financial setback experienced by the family during childhood. These beliefs become so deeply ingrained in their thinking that they never question their accuracy…or realize how deeply the stories are shaping their own financial choices.

The Most Common Money Stories

Most people’s money stories fall into one (or occasionally two) of the following four categories—each of which brings its own set of problems…

Money is bad. Money stories that fall into this category include, “Rich people are greedy”…“Money corrupts”…“It’s not OK to have more than you need”…“Good people should not care about money”…and “Living with little money is virtuous.” People who subscribe to stories such as these often feel guilty about having money.

For some people, this guilt may encourage them to give away more money than they should and/or discourage them from taking the steps ­necessary to accumulate and safeguard money. They might seek jobs in “helping professions,” such as social work and psychology. For other people, considering money bad is a way to rationalize why they don’t have much of it—a significant percentage of people who believe money is bad also wish they were rich.

Related: Some people subscribe to the story, “I’m bad with money.” That’s different from the story, “Money is bad,” but the results are similar—they behave in ways that do not help them accumulate and safeguard savings. For instance, they might contribute very little or nothing to retirement accounts, and/or they might fail to choose investments that are likely to grow substantially. 

Money will solve all my problems. Stories here include, “More money will make me happier”…“Money is power”…and “It’s hard to be poor and happy.” Certainly, money can solve some problems, but people who live by these stories take this too far—no matter how much they have, they believe the life they desire requires more. Evidence suggests otherwise. Although cost of living varies widely across the country, in general once annual household income rises above a certain level, additional earnings tend not to bring increased happiness, according to a 2010 study by Nobel Prize–winning psychologist Daniel Kahneman. (That $75,000 level in the study would be about $87,400 today, adjusted for inflation.) Believing that money will solve most problems can turn people into workaholics who opt to spend long hours in the workplace, even when they would derive greater benefits from time spent relaxing, exercising or socializing with family or friends. 

Money equals status. Stories here can include, “Money is what gives life meaning”…“Poor people don’t deserve to have money”…and “Your self-worth is equal to your net worth.” People who tell themselves these stories put a ­priority on appearing wealthy over actually being wealthy, so they splurge on flashy ­luxury goods or large homes that they can’t ­really afford. They often brag about their incomes or the hefty amounts they paid for high-end goods—and might ­exaggerate when they do so. They’re prone to accumulating credit card debt and hiding their spending from their spouses. They are not greatly concerned about their overspending and lack of savings—they believe wealth will come their way because they deserve it. 

Money must be saved, not spent. Money stories in this category include, “The best use of money is to set it aside for a rainy day” and “If you cannot pay cash for something, you should not buy it.” People who live by these money stories generally consider it improper to talk about how much money they have or make (though they generally don’t keep financial secrets from their spouses). They’re more likely to be in good financial shape than people who fall into any of the categories above, but there’s a downside here, too—these people tend to feel anxiety about their financial futures even when anxiety is not warranted. And they might be so averse to spending that they don’t enjoy their money as much as they should. 

In addition to the four different types of money stories, there is another crucial distinction that may determine someone’s attitude toward money. Some people’s stories hold them accountable for every financial result they experience…while other people’s stories hold outside forces accountable, especially when things go wrong. Example: Credit card debt is blamed on greedy credit card companies, not on overspending. 

People who blame outside forces tend not to experience long-term financial success. They never hold themselves accountable, so they fail to figure out where they went wrong and they repeat the same mistakes again and again.

How to Rewrite Your Money Story

The most important step in overcoming an unhelpful money story is first to become aware of it. Money stories are so ingrained in people that it often is difficult to even see them. You may have recognized yours in the earlier descriptions. If you’re not sure, ask your spouse or someone else who knows you very well for input.

Here’s how to confront your money story and adopt a more balanced, more accurate and more financially beneficial money mentality…

Search for the source of the story. Most money stories date back to childhood. Yours might be a reaction to the financial circumstances of your childhood…a copy of a money story believed by one of your parents…or a polar-opposite response to a parent’s money story. Example: When a parent believes that money is bad, the child might adopt that view, too…or might take the opposite view and believe that money is the only goal worth pursuing. 

If you can establish that a money story comes largely from your upbringing, not from some deep truth about the way the financial world works, you can begin to see that this story is flawed and that the story has been doing you financial harm. 

Admit that your money story cannot be 100% right 100% of the time. There might be an element of truth to your money story. But if this story is the way you reflexively see the world, there certainly are times when it’s wrong. 

Modify your social circles and reading materials to include alternative money stories. People tend to surround themselves with friends who share similar money stories—or they avoid talking about money matters with friends. They tend to seek out publications that confirm what they already believe about money and dismiss or ignore those that do not. 

Escape your money story’s echo chamber. Spend time with people who think differently about money, and read books and articles that provide alternate viewpoints as well. Rather than try to shoot down their opinions, adopt the attitude, Maybe there is something to what they’re saying

Create a money mantra that contradicts the errors of your money story—or that better reflects your values. Think up a sentence or two that calls out the flaws of your money story (or stories) and points you toward a more helpful financial belief system. Type this mantra into your smartphone, or write it on a card that you keep in your pocket. Read it in situations where your money story encourages you to engage in unhelpful financial behaviors…and any other times when you hear your money story in your head. Soon you won’t even need to read this mantra—it will pop to mind automatically.

Examples: A workaholic’s mantra might be, I love my kids, I love my wife and I love my friends. I’ve worked enough for today, and right now the best use of my time is to be with my loved ones. The mantra for someone who believes money is bad might be, Money is neither good nor bad—it all depends on what we do with it. I’ll try to acquire money so I can use it for good. For someone who associates money with status, it might be, Appearing wealthy isn’t what matters to the people who really matter to me. For savers, the mantra might be, The point of saving is to have a good life—if my drive to save is preventing me from having a good life, I’m taking it too far.