How to Overcome Your Money Biases


We’re all motivated by money in some way. Whether we think it can buy happiness or we believe it’s the root of all evil, our money hang-ups – often formed in childhood – can really impact our financial lives as adults. The key is to recognize these inherent convictions and do our best to approach money from an informed point of view.

Psychology has identified many categories of money bias, but for our purposes, we’ll take a look at:

Money Avoiders.

These individuals typically think money is corrupting, or they may feel guilty about having money when others don’t. This could eventually lead to inadequately saving or planning for retirement.

Money Worshipers.

These people LOVE money and can never get enough of it. They might become workaholics in order to earn more money or accrue a lot of debt because they can’t stop spending.

Money Neutralizers.

If you’re a Money Neutralizer, you’re probably indifferent towards money and don’t spend a lot of time thinking about it. As a result, you probably don’t see the need to invest or plan for your financial future.

Let’s look at some real-life examples of money bias and what you can do to rise above these blind spots. First up: Money Avoiders:


Jon Pelton, 31, didn’t grow up in a family with lots of money.

“I was a pastor’s kid and my dad was not a ‘megachurch’ pastor,” Pelton said. “I don’t remember ever being in need, but we never had money to just do whatever we wanted.”

Pelton said money met his family’s needs, but the pursuit of money didn’t drive his parents’ decisions. As an adult, Pelton followed in his father’s footsteps in many ways, studying theology at MidAmerica Nazarene University and attending seminary. He now works as a freelance graphic designer.

Pelton pursues his convictions with religious fervor, but in the process he became a Money Avoider.

Money Avoiders Can Become Conscientious Investors

Pelton said he started noticing as an adult the way money affected others. Companies, churches and positions all cater to the highest bidder, he said.

“The more I saw and the more I thought about it, the more I just started hating the whole system,” Pelton said. “It definitely does make me more hesitant to participate in the system as a whole.”

At 31, Pelton hasn’t started saving for retirement. He said that when he does, he won’t invest in companies that go against his moral convictions.

“If I can make a lot of money and do it in a way that is socially and morally responsible, I’ll go for it,” Pelton said.

In order for Money Avoiders to thrive financially, they must first create a budget and be realistic with their household needs and retirement goals. It’s important also for Money Avoiders to meet with a financial advisor to discuss investments with which they feel comfortable. Because they likely get a late start with saving for retirement, they’ll also need to look at ways to maximize their contributions to retirement accounts.

Money Worshipers Can Become Enthusiast Savers

Amy Collette, 31, said her family of four has experienced a significant increase in income over the past three years. But her husband’s frequent wage increases (as an operator at a chemical-manufacturing plant) have usually translated to more spending – not more saving.

“I feel like if I had a lot of money I wouldn’t spend it very well,” Collette said. “In 2015 we are really trying to be better about money.”

The Collettes are not alone in their spending habits. According to a recent article in The New York Times, a majority of American households have less than one month’s savings readily available.[1]

For people who love to spend, a solution is to increase your 401(k) contributions when you receive a raise. This way, the money is automatically put into your retirement accounts in lieu of showing up in your bank account. If you don’t see it, you can’t spend it, right?

Money Neutralizers Can Become Prepared Retirees

For some, money doesn’t bring up strong feelings of love or hate. These individuals see money as a completely neutral element in their life. At first this may not sound like a bad thing, but if you become so neutral in your feelings towards money that you put no thought in your retirement plans, it can become a problem.

The solution for Money Neutralizers is to be realistic about what they want their retirement to look like. Money Neutralizers don’t need to become passionate about money, but they do need to know how much they need to save to make their retirement dreams a reality.

Regardless of how you feel about money, it’s time to put your feelings aside and get serious about saving and planning for your financial future. To get started, contact your local advisor at The Mutual Fund Store®.

[1] The New York Times. “The Dangerous State of American Savings.” Jan. 30, 2015. Web.
Note: Individuals quoted within this article are not clients of The Mutual Fund Store. Their views do not necessarily represent the views of The Mutual Fund Store, its management or employees. The use of the individuals quoted within this article in no way implies an endorsement by The Mutual Fund Store or is intended to be legal advice.