How Money Trauma Shows Up in Our Lives

Money trauma can be a sneaky presence in our lives, manifesting in both subtle and obvious ways. Perhaps you've caught yourself delaying the opening of bank statements or avoiding discussions about money — these are some of the subtle signs. On the other hand, it might show up more blatantly, like maxing out credit cards on impulse buys or feeling a deep sense of dread every payday because you know your money will soon be gone.

It's common to feel overwhelmed if you're just starting to explore your relationship with money. Understanding the different forms money trauma can take is the first step toward healing.

For me, the signs became crystal clear during the peak of the pandemic. With the uncertain future, I found a peculiar comfort in online shopping. The excitement of having something to look forward to — a package on the way — was thrilling. However, the excitement would vanish when the packages arrived, often leaving me with items I realized I didn't even want. This pattern is known as compulsive buying disorder, a habit that stems from what's known as financial worship — the excessive emphasis on acquiring and spending money as a way to feel validated or fulfilled.

Understanding the Roots and Manifestations of Money Trauma

Financial worship is just one piece of a larger puzzle. Behavioural finance shows us that our financial decisions are deeply intertwined with the "money scripts" we carry — these are the subconscious beliefs about money that drive our behaviours. Common scripts include overspending, underearning, and hoarding, each linked to deeper emotional narratives.

But it doesn't stop with behaviours. Money trauma also manifests emotionally and psychologically. It can trigger anxiety, depression, and shame, all of which may strain personal relationships and complicate decision-making processes. Just as any life experience can lead to trauma — be it a severe accident or persistent stress—financial stressors can leave a lasting impact. For those of us from marginalized backgrounds, the constant adrenaline rush from facing systemic challenges can exacerbate this trauma, making it even harder to find a "safe space" mentally and financially.

Our responses to money, whether panic-spending or complete avoidance, often come from a place of survival, not choice. Our brains, trying to protect us, might lead us to make decisions that feel right in the moment but are harmful in the long run. It's like the characters in the movie Inside Out — none like discomfort, but they eventually understand that feeling all our emotions is necessary for overall health.

Long-Term Effects and Why They Matter

The long-term effects of money trauma can be far-reaching. It might affect your ability to save for the future, invest wisely, or even feel stable enough to make long-term financial plans. And it doesn't just affect your wallet; it can influence your career choices, family dynamics, and personal growth.

A Kind Reminder: Money Doesn't Define You

It's essential to remember that our financial decisions — or the money trauma behind them — do not define who we are. Money is a tool, not a measure of our worth. As we navigate our financial journeys, we must approach ourselves respectfully and not moralize our financial behaviours. Healing begins with understanding and compassion, recognizing that we're all doing our best with the resources we have. Let's allow ourselves to learn, grow, and heal without judgment.

If this discussion has struck a chord with you, here's how to take action: Consider consulting a mental health professional specializing in financial wellness to navigate these complex emotions. Additionally, a financial advisor can offer practical support and guidance.

There's so much more to uncover about money trauma, and I look forward to delving deeper into this topic with more insights and stories here at ATB. Keep an eye out for more!

Meet Alyssa. 

Alyssa Davies is founder of the two-time award-winning Canadian Personal Finance Blog of the Year, Mixed Up Money. Her books, The 100 Day Financial Goal Journal and Financial First Aid are currently available for purchase.