There isn’t some 5-step process to overcoming financial trauma. You could do all the positive affirmations, journaling, calendaring your financial tasks, or make endless spreadsheets and none of it will work.
The one thing, the very first thing, and by far the hardest thing to do as you begin recovering from financial trauma is to be gentle with yourself.
Approximate read time: 9 minutes
Healing From All Trauma is Difficult, but Shame Makes it Even More Difficult
Shame, judgment, and guilt are powerful emotions. Acting under the influence of these emotions feels like we are doing something, ANYTHING to recover from past decisions and prevent new “bad” decisions.
People experiencing financial trauma are incredibly hard on themselves. They may also hyperfocus on one or two things. Hyperfocus might sound like a good thing, but it can be its own kind of avoidance, and at the very least makes it difficult to see things coming at you from left field.
Financial Trauma and Procrastination
Avoidance, apathy, and procrastination are deeply misunderstood. We avoid the things that hurt us. That’s something all animals do! It’s an absolutely abhorrent idea that we should be able to move towards, force ourselves into, or intentionally expose ourselves to pain and trauma. And yet when finances are the topic, we expect just that.
Sam and Mo attack each other, avoid financial conversations, procrastinate on paying bills, and escape into other activities rather than sit down and talk about money. They alternate between feverish, desperate, panicked attempts at budgeting and being shut down and hopeless. Each of them feels isolated from each other, friends, and family. No one can understand. That isolation comes with shame. They are exhausted, hurt, and terrified. Nothing either of them ever feels like enough and it feels like they’re always going to live this way.
I hope you have a pretty good picture of Sam and Mo in your head. Now remove the element of finances from your image of them. Let’s replace that with any kind of loss. The loss of a loved one, a job, or even health will do nicely.
Loss, pain, and trauma
Let’s picture their story again.
Sam and Mo attack each other, they avoid talking about the loss and procrastinate on anything having to do with recovery from that loss. They escape into other activities rather than sit down and talk about their loss. They alternate between feverish, desperate, panicked attempts to resolve that loss and stop the pain associated with it, and being shut down and hopeless. Each of them feels isolated from each other, friends, and family. No one can understand. That isolation comes with shame. They are exhausted, hurt, and terrified. Nothing either of them ever feels like enough and it feels like they’re always going to live this way.
When framed this way, most people will see Sam and Mo with much more compassion after they’ve suffered a loss versus if they are struggling financially. When it comes to finances, we, as a society, have wholly bought the lie that your financial situation is a reflection of your worth. You made your bed, now lie in it. You did this to yourself.
It’s also much easier to see that there is trauma in the loss, pain, and grief, but we are less likely to acknowledge financial trauma. And unacknowledged trauma only creates more trauma.
The tools we have to make better decisions (and in theory prevent future trauma and failure) only make the problem worse.
Financial Trauma, Force, and Restriction
Look, Sam and Mo. You two just need to sit down once and for all and talk about this traumatizing thing. Get it together! Stop spending on stupid stuff, stop avoiding bills, and just talk about this painful topic that has hurt you both every time you’ve tried talking about it over the last 20 years.
Force, obligation, and restriction can look like they are propelling us forward, but instead only result in negative self-talk and the reinforcement that we can’t do anything right. Feeling like a failure is a horrible place to make decisions from. Decisions made from this place of “I’m not enough” typically only increase financial insecurity, and in turn, financial trauma.
If you have to force yourself to do something, the message you’re reinforcing to yourself is that you can’t be trusted to act without force. This deeply wounds our sense of autonomy and will likely result in one of two responses on your part. Rebellion, resentment, or more than likely, both. Rebellion and resentment are the normal, healthy reactions when we feel choices have been removed from us. Removal of choice means we are in dire straights to the survival-obsessed part of our brains, the R-complex. And that part of our brains WILL NOT stand for a reduction of choice. That’s what rebellion and resentment are for… to claw back control of our lives.
And your brain does not know the difference between someone else removing choices from you, and you doing it to yourself. Your brain doesn’t know, and it doesn’t care. That’s why restriction will get you short-term compliance, but not long-term behavior change.
The Poverty of Restriction
Restriction has a great sales pitch! Restriction tells us “This is the only way you’ll make better choices, you can’t trust yourself to make good decisions, so just restrict, restrict, restrict”. But restricted spending IS emotional spending.
I hear this frequently as: “I just need to focus on my needs, not my wants” and “We just need to tighten our belts”. All of this is a setup for failure. We set up unrealistic, unsustainable expectations, and then we fall off, even a little, we shame ourselves. And that counts as trauma too. So we get stuck in this feedback loop of restriction, rebellion/resentment, perceived failure, and trauma. It’s nearly impossible for us to make good decisions with an eye to the future when we are locked in the fog of trauma.
Shame, judgment, guilt, remorse, and obligation will not help clear that fog. If they were going to work, they would have worked by now. Restriction, shame, and force will only increase financial trauma.
“FFS, Hanna, just tell us how to recover from financial trauma!”
No one likes my answer to this. I think what people want is for me to give them a premade budget, a set of rules, or some magical restrictive plan. But none of that will work.
What I work on with my clients is far more difficult.
There are a few ways you can help yourself begin the process of recovering from financial trauma, and a few ways you’ll need a team for.
The first way you can begin healing is to be patient with yourself. Practice grace. Go slowly.
The single biggest thing you can do to heal financial trauma and all of the muck that comes along with it is to give yourself grace. And this means being patient with yourself even for times you have NOT been patient with yourself.
After you have practiced being gentle with yourself, you can practice being aware of your behavior without judging your behavior.
Treating yourself gently is a mindset, and being aware of your own behavior without judgment is that gentleness in practice. Being aware of our behavior without judgment requires grace, and acceptance of ourselves where we are RIGHT NOW is pretty much the only way we get to long-term, positive behavior change. The ability to observe yourself without judgment means you can look for patterns, experiment, pivot, and iterate plans and systems quicker than you can when you’re shaming yourself. Observation without judgment means you evaluate the systems and strategies you’re using, not yourself.
And in the process of evaluating the systems we use (not ourselves), we learn to trust ourselves.
Once you can be aware of your own behavior without judgment, you can learn to trust yourself
There is no difference between trusting yourself and being resilient. Learning to trust yourself doesn’t have to be onerous. In fact, I typically teach my clients how to trust themselves with a game.
Let’s return to Sam and Mo
Imagine they slowed down and began to practice patience and grace for themselves.
Maybe as she slowed down, Mo noticed that she might make assumptions about Sam’s intent when he didn’t comply with a task request. “You said you would, but you didn’t, so you don’t care about me.” That assumption had been repeated and reinforced in her head for decades now, so it was easy for her to believe it. But was it true? Was this repetitive assumption re-traumatizing her?
And as Sam practiced patience for himself he noticed his pattern of shutting down to protect himself. Was he reinforcing his own financial trauma by avoiding and quitting conversations? We avoid things that hurt us. Using trauma logic that means that if he’s avoiding financial conversations they must therefore be painful. What if they weren’t and his own fear response was doubling down on the trauma?
Trauma of all kinds tells us lies. It’s okay to be a little skeptical of those fast, sneaky lies.
Recovering from financial trauma with a team and Financial Coach
The first and most obvious team member you might bring on to help you through this is a trusted, experienced trauma therapist.
Secondly, leveraging a trauma-informed, holistic financial coach is a great way to put new financial tools in your toolbox AND practice them in a safe place. (Full disclosure, I am a trauma-informed, holistic financial coach)
Thirdly, begin to grow a community around yourself. Financial trauma is widespread. And everyone thinks they are the only person experiencing it. You don’t need to get financially “naked” with anyone, or unburden yourself to an online group, but begin looking and listening for others who are expressing similar concerns to yours, and see our community with them. Not talking about financial trauma only increases the shame around it. Building a community is a fantastic way to practice bravery (trusting yourself) while developing a supportive network around yourself.
Patience and grace are key to overcoming financial trauma and building a healthier relationship with money. Financial trauma is incredibly common, yet isolating. There are little steps you could take TODAY to begin healing from financial trauma.
Next recommended article: Signs of Financial Abuse
Ready to Meet With a Financial Coach and Begin Financial Coaching Services in California, New York, Texas, and anywhere else in the United States?
If you’re ready to break free from the chains of financial trauma and take control of your financial future, it’s time to seek guidance from a skilled financial coach at Pacific Stoa. Together, we’ll unpack your past financial experiences, address the pain points, and create a personalized roadmap to financial healing and empowerment. Don’t let the past dictate your future – reach out and embark on your journey toward financial well-being and lasting stability. Follow these three simple steps to get started:
1. Reach out to me to schedule an appointment to see if financial coaching services are right for you.
2. Begin meeting with me, Hanna Morrell, a skilled financial coach.
3. Start overcoming your financial trauma and take control of your financial future!
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At Pacific Stoa, I want to make sure you have everything you need when it comes to managing your finances. So in addition to helping individuals take control of their finances and overcome financial trauma, I also provide Financial Coaching for Couples, Financial Coaching for Divorce and Separation, and Financial Coaching for Families. I also offer Financial Consulting for Nonprofits and Businesses to help create a customized strategy built specifically for you, your organization, and those you serve. Check out my FAQ to learn more about Financial Coaching and my Blog!