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Healing Financial Wounds: How Trauma Shapes Your Money Mindset

Girl with hands over heart and trees growing from money
Having a good relationship with money

Healing Financial Wounds: How Trauma Shapes Your Money Mindset

Frugality was the money mindset theme I grew up with. I wore my brothers hand-me-downs. My mother would never buy anything unless it was on sale or she had a coupon. Dad saved various metals and newspapers to bring to recycling. Back in the 1960's he got 5 cents a pound for those newspapers and I remember our 2 car garage being packed full of newspapers for a yield of $10 dollars.

While financial matters may seem cut and dry and completely separate from our emotional life, the reality is that our past traumas can significantly impact how we think about and utilize finances. Our relationship with money is deeply intertwined with our emotions, experiences, and upbringing. My mother often binge drank when I was younger and to alleviate her guilt and shame about her behavior, she would go shopping the next day and buy me things with a generosity that was a complete flip flop from the conservative, frugal vibe the household ran on. It left me with the confusing construct of be thrifty but it's perfectly ok to overspend when you feel guilt, shame or stress. That is financial trauma. The fact that affection was expressed with a dollar sign was yet another unhealthy overcoupled construct. Connecting money with love is a disaster for both your emotional AND financial health.

Understanding Financial Trauma

Financial trauma also refers to the emotional distress and psychological impact experienced as a result of adverse financial events or circumstances. It can arise from various sources such as job loss, bankruptcy, mounting debt, financial abuse, or even witnessing financial struggles within our family. Just like any other trauma, financial trauma can manifest as anxiety, fear, shame, guilt, and a sense of powerlessness.

The Connection Between Past Traumas and Finances

Our past traumas, whether they are related to money or not, can significantly shape our financial beliefs and behaviors. Here are some common ways in which past traumas can influence our financial mindset:

  1. Childhood Experiences: Our early experiences with money mindset and financial instability during childhood can deeply impact our beliefs about abundance, security, and self-worth. Growing up in an environment of financial scarcity or witnessing parental conflicts over money can lead to fear-based financial attitudes.

  2. Personal Financial Crisis: Personal financial crises, such as bankruptcy or foreclosure, can leave lasting emotional scars. These experiences can create a fear of repeating past mistakes, resulting in a scarcity mindset, overspending, or an inability to trust financial institutions.

  3. Financial Abuse: Individuals who have experienced financial abuse, such as control over finances by a partner or family member, may develop a deep-seated mistrust of others, leading to difficulties in forming healthy financial relationships.

  4. Societal and Cultural Factors: Broader societal factors such as economic recessions, financial inequality, or systemic barriers can contribute to collective financial trauma. These factors can influence our financial perspectives and trigger a sense of helplessness or vulnerability.

Breaking Free from Financial Trauma

While financial trauma can have a significant impact on our lives, it is possible to heal and develop a healthier relationship with money. Here are some strategies to consider

  1. Self-Awareness and Reflection: Begin by reflecting on your past experiences and identifying the financial traumas that have affected you. Understand how these experiences may have shaped your beliefs, attitudes, and behaviors towards money.

  2. Seek Support: Consider seeking professional help from therapists or financial advisors who specialize in trauma. They can provide guidance, support, and strategies to help you navigate your financial healing journey.

  3. Education and Empowerment: Educate yourself about personal finance and financial literacy. Building knowledge and skills can help you regain a sense of control and confidence in managing your finances.

  4. Practice Self-Compassion: Be gentle with yourself throughout the healing process. Recognize that healing takes time, and it is okay to make mistakes along the way. Practice self-care and cultivate positive financial habits that align with your values and goals.

  5. Create a New Financial Narrative: Challenge negative beliefs and replace them with positive affirmations. Focus on rewriting your financial narrative by setting realistic goals, creating a budget, and celebrating small victories.

Financial trauma can have a profound impact on our financial well-being, but it does not have to define our future. By understanding the connection between our past traumas and our financial mindset, we can begin to heal and develop a healthier relationship with money and ourselves. Remember, it is never too late to embark on a journey of financial and personal healing. By taking the necessary continual steps, we can break free from the chains of financial trauma and build a brighter financial future.

Need assistance with your trauma money mindset? Eileen is HUD Certified financial counselor and alternative healer who has completed 17 vision quests enabling her to be a clear and effective conduit for your personal growth. She has worked with somatic breathwork practices for the last 10 years and is a certified Unified Mindfulness Coach Contact or visit

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I needed to see this today. Even though I've cured most of my financial maladies, I still have internal financial traumas that affect how I move with money. The internal ones are the hardest to beat because you don't always know they are there. Thanks for the reminder to look inward. 💖

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