How understanding your money childhood trauma can make you better with money as an adult

Nov 07, 2023
money trauma, financial trauma, money and family, family money stories, debt with family, family trauma, personal finance, money phycology

Our relationship with money isn’t simple, logical, or rational. The way we spend money is largely emotional, but the way we think about money can have more to do with trauma than anything else.. Let's think of your first memory about money. Was it exciting? Did you feel empowered or hopeful, or was it stressful, made you feel scared, or that you were in danger? If you were being really honest with yourself, can you see patterns between that first belief around money and how you spend/earn money today?

(pause to think)

It’s really interesting. When I first connect with a prospective client, one out of three people tell me that their parents never taught them about money or "I was never taught."

We would never expect our parents to teach us geometry or world history, and we certainly would never ask our parents to teach us about sex and mental health, yet when it comes to money, so many of us feel slighted by our parents for not teaching us about personal finances. We feel that they owed us something more and that their lack of information/education has actually caused us great harm.

Most people associate being in debt or not having savings with a lack of support from their parents/family. 

Here’s the honest truth: Most parents don’t teach their children about money because they’re not good with money. Here’s the second honest truth: most people are not good with money. 

We could look at every statistic in the book to prove this statement to be true. 50% of all adults would struggle to pay a $400 bill, Americans owe $1.08 trillion in credit card debt alone, and how many kids were told to sign up for student loans without figuring out just how much that would cost them in the future? So just like you hated that 10th-grade English teacher who really sucked but was tenured and couldn’t get fired, most of your parents are unqualified AND unenthusiastic about teaching you anything in regard to personal finance.

Because, just like us, most of our parents didn’t grow up talking about money. And if money was brought up, it was a cause of stress or fighting or both. Depending on your heritage, your parents may have been processing generations of traumatic money wounds, all while trying to keep up with the Jones.

In a DNA study, researchers found that descendants of Holocaust survivors had low levels of the hormone cortisone because of prolonged starvation. Cortisone is the main hormone that supports our ability to fight, run, or freeze; it signals to our body that danger is coming. So, children, grandchildren, and great-grandchildren of survivors have inherited lower cortisone production in their genetic makeup. 

What DNA testing shows us is that our genetic makeup is altered by trauma from our familial and personal past. Yes, we inherit hormones, genmones, and eye colors, but we also inherit fear, anxiety, avoidance, denial, anger, resentment, and distrust.

This is why our relationship to money is beyond physical; the way we treat money is cellular deep.

So, how do we change our relationship with money so that we can evolve from what we’ve seen to a better, more healthy relationship? The first step is to acknowledge:

  • Do you avoid looking at your bank statements, opening up mail, or checking your credit card statements?
  • Do you live paycheck to paycheck even though you make consistent income? 
  • Do you fight with your partner about money or say yes to friends when you’re not really sure if you can afford it?
  • Do you have an unexplained fear of money even though you never experienced financial struggle?

Once you acknowledge your history and accept your trauma, only then can you move on from it and make better choices in the future. 

Let’s look at some examples of how to reprogram our childhood trauma around money:

  • Create money goals: If this is about getting out of debt or building savings, having goals keeps us on track and intentional with our spending. 
  • Respect your time/money: Set time and money budgets for friends and family. Just because you were raised in an environment where your family always made time for everybody doesn’t mean you can afford to do that.
  • Make a budget: Getting out of debt is solvable, and building wealth is possible; it just requires a plan. And a budget is a start to that plan. 
  • Stop taking money from abusers: If someone in your family or a friend gives you money with conditions, then stop taking their money ASAP. They are preventing you from becoming financially WELLthy and independent. 
  • Instead of blaming or shaming, find compassion and forgiveness: Taking responsibility for your finances allows you to show up more authentically in every relationship in your life.

We are all shaped by our environment. How we witnessed money being handled as children still plays a part in our day-to-day lives, but it doesn’t have to be. The more you can understand, name, and forgive your childhood trauma, the easier it is to change your beliefs around money. Mindset is the key to having a happy, healthy, and thriving relationship with your finances, and it is possible for everybody. 


Decolonizing Wealth indigenous wisdom to heal divides and restore balance - Page 33 - Edgar Villanueva 

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