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Is spending money a trauma response?

by | Oct 25, 2022 | Personal Finance

While some people might be able to navigate money conversations and behaviours with ease, most people can’t help but feel a sense of anxiety when it comes to confronting their finances. This is a sign of financial trauma and is linked to an array of other related monetary scruples that lead to the detriment of many consumers.

For example, most people from poor upbringings experience difficulty acquainting themselves with healthy financial habits. The hustle and bustle and the constant struggle to survive, leaves a notable mark in a person’s mindset regarding sound money management.

When you grow up poor, every waking moment is a do or die moment. Always on the verge of losing everything, children who grow up poor develop a trauma that is not is not shake off. Also, children often internalize the stress and anxiety they witness their parents go through and financial struggles are no exception to this.

Similarly witnessing family members display poor financial management, during childhood, easily translates to a repetition of this behaviour in adult life. In essence money is at the fabric of human sociophobes. Therefore, our interactions with the rand from an early age play a crucial role in the development of our lived financial experience in days to come.

From generational, intergenerational, relational, societal, or systemic influences, financial trauma can be caused by an array of things.

Either way, the impact can be debilitating, hence it is importance to recognise the signs of financial trauma in order to actively deal with them and improve your financial situation. Here are a few telling signs that your spending behaviours may be trauma response.

 

Underspending

While it is easy to highlight overspending as an obvious red flag, most people often overlook underspending, which is equally an explicit sign of financial trauma. When people excessively underspend, when money is available can be linked to an unhealthy fear of scarcity or lack stemming from childhood poverty. We’ve often heard people who come from poor backgrounds developing psychological behaviour patterns such as hoarding or severe underspending.

 

Financial avoidance

If you are one of those people who always avoid checking your bank balance or keeping track of the transactions on your bank balance, this is another sign of financial trauma. In relation to trauma, and the commonly known fight, flight, freeze, or fawn response, financial avoidance, puts a temporary stop to the confrontation of your money fear and “at its most intense level, it’s dissociation.

 

Underpayment

One thing about financial trauma is that it is a huge blow to your self-esteem. This often leads to deliberately underearning for your efforts. Due to your strained relationship with money, you often fail to advocate for yourself to clients and employers. You end up accepting less than what you’re worth because you underestimate yourself and you fear failing.

 

Reckless spending

People often attribute being reckless with your finances to an immature lack of responsibility. However, sensible adults have on several occasions found themselves overstepping boundaries and squandering budgets for no particular reason. These seemingly uncontrollable impulse spends are also primarily due to financial trauma.  Terms like retail therapy and compulsive spending stem from this very notion. As a means to overcompensate for insecurities and anxieties experiences in emotional areas outside of the resulting act.

The good news is financial trauma can be solved. There are certain tricks and tactics, including meditation and journaling that can help us with our emotional and mental health and healing financial trauma. Before opening a credit card statement, checking your credit score, or discussing money with a spouse, you can gain some perspective by calming your nervous system with mindfulness meditation and breathing exercises.

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