Crazy About Money

My review of Crazy About Money by Maggie Baker. This book by a practicing psychologist is about how emotions confuse our money choices and what to do about it.

Financial planning is often presented as a scientific discipline. Future expenditure needs and timeframes, our future earnings potential and quantitative assessment of our risk profile are combined into an investment strategy that magically removes the red ink from our future cashflow forecast. Job done.

If only.

800lb gorilla

Unfortunately, our emotional relationship with money has a way of wreaking havoc with our best laid plans. Maggie Baker describes it as the ‘800lb gorilla in the room’. For some, money triggers feelings of enjoyment, recognition or pride. For others fear, anger or shame. Often, we don’t recognise what it is we’re feeling or that it’s money that’s triggering it.

Emotions about money get linked to money beliefs, or what Baker calls money ‘scripts’. These beliefs have frequently arisen to maintain our psychological equilibrium. Where this is an equilibrium rooted in fear or anger then these beliefs can be unhealth and self-defeating. Examples of negative scripts that Baker explores are:


  • I’m keeping score. No one is going to ace me out.
  • Money doesn’t count; I’m above it all.
  • I’ll never have enough.

Unhealthy money beliefs

The first of these examples is the classic money = status identity. It’s often assumed that this can be learned from overly materialistic parents. But this isn’t necessarily true. A child that feels unable to win the affection of their parents may use success and money as a proxy for that unmet need for parental love. The consequences for future healthy relationships and perspectives on career and life are obvious.

At first sight, the belief that money doesn’t count seems a more healthy belief. And indeed many money beliefs can have both healthy and unhealthy manifestations. But taken to extremes this can lead to a carelessness about money that can lead to distress not just for the person themselves but family also. This belief can be an excuse for not taking accountability for your own financial life, believing that money is someone else’s responsibility.

A childhood dominated by money scarcity can lead to an excessive desire for security: I’ll never have enough. But this money belief can also be transferred from another emotional need. A sense of fear of the world, or difficulty forming relationships, can lead to financial security becoming a proxy for emotional security. Such a script prevents people enjoying the money they’ve earned in a healthy way and can lead to frustration in relationships with a partner with different beliefs.

Indeed, it is in relationships that money beliefs, and in particular differences between money beliefs, can really bite. It was through her work in relationship counselling that Baker first became interested in the psychology of money.

A window into our behaviour

Baker’s book takes us through a range of money beliefs drawing on case studies from her practice. She shows how money beliefs develop over the course of a person’s life into what can be described as money types: clusters of beliefs and behaviours that describe a person’s relationship with money. Each chapter ends with  reflection exercises to help embed learning. 

As with any psychological categorisation, the money types should be viewed as windows into your behaviour as opposed to boxes that define you. But I found them an engaging way to reflect on my own relationship with money, both good and bad. And they helped me understand how these beliefs might be affecting the way I was interacting with the world.

The book is stronger on providing ways to reflect on and understand your money type than it is on ways to shift it. But awareness is the first step on the road to change.

So Crazy About Money is a very useful starting point for anyone looking to understand their relationship with money and how this impinges on how they live their lives.