🟣 Trauma 🟣

🛀 Your 5-minute dose of financial self-care

Hello there 💜

How are you? What have you been up to?

The past few days have been intense here.

One of my kids started school (in the Netherlands, where I live, kids start school on the day they turn 4), bringing a wave of emotions and earlier wake-up calls.

Currently at ☠️ 5:15 am ☠️.

Meanwhile, I’ve been preparing new sessions for you on a challenging topic.

🟣 Trauma 🟣

More specifically:

How traumatic experiences can influence our beliefs and behaviors toward money.

And how specific financial events can affect us as intensely as traumatic experiences.

Despite its profound effects on individuals and society, this subject is often overlooked, especially by behavioral finance and money mindset programs.

So, for our next sessions together, I worked with two INCREDIBLE professionals (yes, ALL CAPS).

I also set myself three goals:

• Shed light on the intertwined relationship between trauma and money.

• Help you identify if it is a matter you or someone you care about should address.

• Provide insights from and connect you with outstanding practitioners in this field.

As always on Money Feelings, we'll do it with a sprinkle of three of my favorite ingredients: optimism, humor, and creativity.

Welcome to our new series on:

🟣 Trauma 🟣

Please stay; it will be “fun.” 😉

🟣 But first, if someone forwarded you this email, Money Feelings is your weekly dose of financial self-care designed to:

• Kiss your limiting money mindsets and behaviors goodbye.

• Grow your financial wisdom in style: less jargon, more emotion.

• Increase your financial well-being, one feeling at a time.

If you don’t want to miss one:

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If you want more information about Money Feelings, follow this link.

You can also follow me on Substack or LinkedIn.

Trauma starts.

It starts with a big event that hits us like a ton of bricks.

Right away, we might feel shocked, numb, or totally lost. We might get super scared, have panic attacks, or feel like we're not even in our own bodies—like we're watching from outside. Our heart races, we sweat, shake, or can't catch our breath.

In the long run, we might deal with lots of stress, bipolar disorder, flashbacks, PTSD, trouble sleeping, nightmares, or headaches.

Trauma can bring on all of these and more.

It has the power to change our personalities.

And our bodies.

A traumatic experience can change our brains’ structure and function.

It can change our immune systems.

It can even change our genes.

Interconnection with money.

Research shows that trauma can also affect the way we behave around money.

You might think, "Well, money's not as important as my mental or physical health.”

But here's the thing— Our mental, physical, and financial health are all tied together.

Financial issues can majorly impact our mental, physical, and overall well-being.

They can amplify our emotional struggles, leading to things like depression, anxiety, or even stress-related illnesses like hypertension.

And sadly, many people who've experienced trauma end up facing ongoing financial challenges.

It's because trauma can:

• Mess with our ability to earn money, and

• Cause us to develop harmful money behaviors.

New money behaviors.

We know that various forms of trauma can significantly influence the development and functioning of neural pathways within the brain.

This means that trauma can alter the way we make decisions, including those related to financial matters.

And so many of our daily decisions revolve around money.

From grocery shopping to eating out, online purchases, subscription services, saving versus spending, budgeting, investing, choosing transportation options, home maintenance, selecting insurance coverage, charitable giving, and banking choices.

Imagine if your ability to make even the simplest, most instinctive, and rational financial choices was impaired.

Trauma also shapes our beliefs about ourselves.

It can plant limiting and harmful beliefs in our minds.

These beliefs often involve distorted and damaging messages that can shape our self-perceptions and lead to harmful money behaviors.

Trauma can make us believe we're unworthy or inadequate, leading to feelings of not deserving success or financial stability.

It can instill a fear of failure or rejection, manifesting as reluctance to pursue opportunities for financial growth or advancement.

It can create a sense of helplessness or powerlessness, leading to a passive approach to managing money or avoiding financial responsibilities.

It can result in internalized shame or guilt, causing us to engage in self-sabotaging behaviors like overspending or financial recklessness.

It can erode our trust in others, making it difficult to seek support or guidance with financial matters.

The politics of “trauma.”

The other day, I mentioned to a friend that I was diving into the topic of "financial trauma."

He rolled his eyes.

He's a psychiatrist.

He's tired of hearing everyone throw around the word "trauma" for every little life hiccup they encounter.

He’s tired of people misusing medical terminology.

I get it. The guy who recently liked our Instagram post from January 2015 is not actually a “psycho.”

However, the field of mental health is constantly evolving, recognizing new situations where the term "trauma" applies.

Take climate change, for example.

Professionals are now considering it a source of trauma as people worry about future events and deal with climate-related disasters (check out this article: Climate change’s hidden threat: grief and trauma).

Similarly, financial psychologists believe certain money-related experiences can be considered "traumatic."

Money causes trauma.

Abrupt financial loss.

Overwhelming debt.

Enduring poverty.

Inability to retire.

Economic hardship.

Medical expenses.

Scary experiences involving money can hurt our financial and psychological health.

They can arise from one event and a complex interplay of individual circumstances and economic, societal, and systemic factors.

They can leave lasting scars on the psyche that are often referred to as “financial trauma” (sometimes “money trauma” or “financial PTSD”).

Alex Melkumian, a psychologist and the founder of the Financial Psychology Center in Los Angeles described it to the New York Times as “an intense and enduring emotional response to current or past financial distress.”

While not a mental health diagnosis, financial trauma can - like traumatic experiences - distort our beliefs and behaviors around money.

Impulsive purchasing, hoarding, totally avoiding our finances, extreme frugality, workaholism, excessive fear of losing everything, obsessing over money matters, difficulty setting healthy financial limits and boundaries in our relationships at home and work…

These could all be signs of experiencing financial trauma.

I will leave you with this example given by Brad Klontz in his book “Psychology of Financial Planning”:

“During the Great Depression, many people lost everything. They trusted banks with their money, and the banks lost their hard-earned life savings. For many people, the belief that arose out of that traumatic event was. “You can’t trust banks with your money.”

In the time of the Great Depression, that was 100% true and accurate.

But as time went on, regulations were put in place to prevent such a catastrophic event from happening in the future.

This did very little to restore a generation’s faith in the banking system, so many people report finding hidden money all over their deceased grandparent’s property: coffee cans buried in the year, rolled-up bills in the freezer, money under the mattress, and so on.

Intense emotion can make money beliefs rigid and difficult to change - a mindset of “I’m never going to let that happen to me again”, no matter what.

This is why some people who grew up in poverty never feel like they have enough to feel safe and secure. […]

Ideally, [someone] will be flexible and open to change. But if they are having trouble overcoming these limiting beliefs about money, it might be time for them to consider seeing a psychological professional for help.”

In the past 5 minutes, we’ve seen that:

• Traumatic experiences can influence our beliefs and behaviors toward money.

• Specific financial events can affect us as profoundly as traumatic experiences.

We’ll dig deeper into all this in the coming weeks.

But I’m pretty sure « we » all need a little break right now, says the girl who woke up at 5:15 am ☠️.

Thank you for showing up, and well done for finishing this first week. 👏

You’ll receive three more emails on the topic of 🟣 Trauma 🟣 this month.

[Today] 👩‍🚀 Discover ⏱️ 5 minutes ✅

[Week 2] 🧠 Deepen ⏱️ 6 minutes

[Week 3] 🎓 Master ⏱️ 8 minutes

[Week 4] 🪞 Reflect ⏱️ 4 minutes

But for now, take good care of yourself and…

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