Definition of scared money
A player is said to be "scared money" when he or she plays higher than his or her comfort limit. The term "scared money" could be translated as "the fear of losing money". A player can be scared money when he is new to a limit. If he moves up from NL100 to NL200, the first few days he will be playing NL200, he may be less aggressive and more cautious than usual.
Recognize when you are scared money
The limit at which you play poker will depend on several things. First, your skill level. Second, your bankroll. You don't play NL400 with a $1000 bankroll, that's only 3 buy-ins. You don't want to play too low either. If you play too low, you might not respect the limit and become too aggressive. And if you're scared money at the limit you're playing at, lower the limit. You can't play optimal poker when you're scared money.