3 Signs You’re Feeling Financial Trauma—and What to Do About it

Money can carry a lot of weight, especially if your past has left scars—growing up in a household that struggled, going through a messy divorce, or facing other financial upheavals. It’s normal to feel anxious, guilty, or overwhelmed when dealing with money. 

You don’t have to let financial trauma control your money moves. Here’s how to recognize the signs of financial trauma and tackle them, so you can start making choices that help you pay off debt, reach your goals, and create a future where money feels like a tool—not a burden.

3 Signs of Financial Trauma 

Do you recognize yourself in any of these money behaviors? You might be feeling financial trauma.  

1. You don’t know how much you owe—and you’re afraid to find out

It’s safe to say that many Americans have debt. We borrow money to pay for higher education, buy homes and cars, and more. Many of us also have high-interest credit card debt. This can cost you a lot of money in interest if you keep a balance on your card. 

If you’re suffering from financial trauma, you might consciously avoid learning how much money you owe creditors. And that could lead you deeper into a debt cycle. Facing your balances is the first step to tackling them, whether that’s by creating a DIY debt payoff plan or seeking debt relief. 

2. You overspend or underspend

If you grew up financially insecure, it could impact your spending habits in different ways. You could engage in so-called retail therapy to make up for years of deprivation or to keep up with your neighbors or friends. You might reach the point where your credit card balances are impossible to pay off. 

Growing up without enough money or going through periods of being broke could also cause you to hoard your cash to the point that you’re harming yourself. If you avoid needed medical care or delay making repairs to your home for fear of spending the money, it’ll likely cost you more in the long run. Or you might seek to avoid all financial risk by keeping all your savings in a bank account. It’s a better idea to diversify it by investing some of it for the future. 

3. Your money “what-ifs” are impacting your life 

If you’ve been through some money turbulence, you might worry excessively about the same thing happening again. For example, if your first experience with homeownership ended in foreclosure or a short sale, you might find yourself catastrophizing if you’re considering becoming a homeowner again. 

Do you have trouble sleeping at night because you’re worrying about your finances? Or difficulty concentrating on work, school, or time with family? Stress could make you ill and get in the way of living your life to the fullest. Feeling a negative life impact because of money worries is a sign that you should face your financial trauma. 

How to Cope with Financial Trauma 

It’s never too late to develop a better relationship with money and get a financial fresh start. Here’s how. 

Speak to a professional

You don’t have to tackle your financial trauma on your own—help is available. If you have the means to meet with a therapist or counselor, you can focus on getting to the root of your bad feelings around money and start to heal. Depression and other mental health concerns could also wreak havoc on your finances. 

If you’re deep in a debt spiral, you might want to speak to a credit counselor or debt relief specialist about options available to address your debt. A money professional, like a financial advisor or planner, could help you set priorities: 

• Pay off debt

• Invest for retirement

• Create a budget, and 

• Get a better handle on your money management

Build your confidence with money 

Once you’ve taken steps to improve your emotional relationship with money, you could retake control by getting a better handle on your money situation and learning as much as you can about personal finance. Start with the basics, like budgeting.

If you’ve never made a budget before or have uncomfortable feelings about budgeting, reframe how you think about it. Making a budget could help you ensure your needs are paid for, while helping you find more money to spend on the expenses that matter most to you. Learning about budgeting and cash flow management could be a great stepping stone to finding money so you can:

• Invest for the future 

• Optimize your tax situation 

• Save for a big money goal 

Set financial goals

Having a plan for the future is a great way to build positive feelings around money and move past financial trauma. Want to take a dream vacation, go back to college, or buy a home? You can start planning how you’ll reach your goal today. For example, you could create a new line item in your budget and arrange a regular automatic transfer of cash to a high-yield savings account to make your dream a reality. 

Financial Trauma Can’t Beat You

Many of us have some negative history with money, but those bad feelings and lingering doubts don't have to be forever. You can work toward financial freedom and a happier tomorrow. Make a plan to tackle your financial trauma and create a better relationship with your money today.