Book review: Mind Over Money

Mind Over Money by Brad and Ted Klontz“Financial success is more about mastering the mental game of money than about understanding the numbers.” That's the first tenet of the Get Rich Slowly philosophy. That math of personal finance is simple; it's controlling your habits and emotions that's difficult.

In Mind Over Money, the father-son team of Ted and Brad Klontz provide a thorough discussion of the psychology of personal finance. They argue that our relationships with money are complex and not wholly rational. Our financial behavior is influenced by psychology and emotion and, especially, our personal history. We've all developed money blueprints (or “money scripts”, as the authors call them) that shape how we deal with money. These are “the slow accumulation of the lessons we learn from the adults around us.”

Money Blueprints

Some of our money blueprints are accurate; some aren't. But:

Whether or not these interpretations are accurate or rational is not the point; the source of money scripts' power is the fact that the beliefs made sense in their original context, in our childhood minds.


And that's where problems arise. Even if our money scripts were very useful when they were formed, they can become destructive if we cling to them and act on them unthinkingly throughout our lives.

What sorts of things make up a money script (or money blueprint)? Let's use me as an example.

My own money blueprint was built from my family's poverty when I was a child, and from the way my parents fought and obsessed about money, and immediately spent any money they received. In my family, money was never saved for the future; it was spent on immediate wants and needs. This example became part of my own money blueprint. For years — and even today, actually — whenever I received a chunk of money (through a paycheck or a windfall or anything), my initial impulse was to spend it. It's taken lots of hard work to overwrite my old ways of thought with something more constructive.

Money Mantras

Mind Over Money is divided into three sections.

  • The first section deals with what the authors call “The Big Lie”: that our financial problems arise because we're lazy, crazy, greedy, or stupid. Nobody wants to be bad with money. Instead, financial problems are usually a result of our money blueprints (which the authors call “money scripts”).
  • The second section looks at a variety of money disorders, which are flaws in our money blueprints. These include money-avoidance disorders (like underspending and risk aversion), money-worshipping disorders (like compulsive spending and workaholism), and relationship disorders (such as enabling and dependency).
  • The final section discusses a variety of ways to overcome money disorders and replace them with more constructive financial blueprints.

The final section of Mind Over Money includes several exercises the authors have developed in workshops and while working one-on-one with clients. These exercises are designed to help you explore and understand your relationship with money. I usually hate stuff like this; I often think the exercises in self-help books are cheesy or irrelevant. The exercises in Mind Over Money are actually interesting and fun. They're not just filler.

For example, the authors suggest that readers combat bad financial habits by developing a money mantra: a conscious statement that you repeat to yourself when you find yourself in trouble. This is something that's proved very effective for me. While digging out of debt, I learned to ask myself, “Is this a Want or a Need?” As simple as that sounds, this mantra (in the form of a question) helped me arrest my compulsive spending. Now I adopt temporary mantras that reflect my priorities, such as: “If I buy this, I may not be able to afford my trip to Africa.”

Note: I've actually found that it's useful to have different mantras for different situations. I build mantras around my weaknesses. To keep myself from buying books I'll never read, I've learned to thwart my urge to spend by saying: “I can borrow this from the library. I can borrow this from the library.” To keep myself from bringing home tons of free Stuff, I tell myself: “Free isn't always free. Free isn't always free.”

Mind Over Money

Mind Over Money contains ample anecdotes: real stories from real people about their relationships with money. As you know, I always like real-life personal finance stories — and, in fact, would like to write a book built around them — because I think they're more revealing and instructive than the pure theory provided in most finance manuals. There are many stories here, and they're diverse. They show why “one size fits all” answers just don't work in personal finance.

What's more, the authors are very clear that they believe “financial advice is not enough to change destructive financial behaviors“. I agree. As I often say, money is more about mind than it is about math. We all know that we should save, and we all know about the power of compound interest. Knowledge isn't the problem; psychology is the problem.

Mind Over Money won't teach you how to budget and it doesn't ever mention index funds. This isn't a book about the nuts-and-bolts of personal finance. It's a book about how we relate to money. Should you read it? I can't say. Some of you will think it's hogwash. But I'm willing to wager that there are a lot of GRS readers out there who would benefit from thinking more about their personal money blueprints.

Mind Over Money doesn't provide all of the answers you need to correct your money blueprint, but I don't think that's the point. The strength of the book isn't in the answers it provides, but in the questions it provokes.

[Earlier this year, Mind Over Money was reviewed by Kent at The Financial Philosopher and a guest-poster at ChristianPF.]

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