Disclaimer: This post is about trauma. I am not a licensed psychotherapist. Nor am I a psychologist or psychiatrist. The thoughts I share below are based on my professional and personal observations and experiences.

Recently, a friend was recounting a bit about their financial journey – sharing how they rebounded from a major financial setback on the heels of the unexpected death of a loved one. 

This was not the first time they shared their story with me. But something about this time made me ask, “When are you going to give yourself permission to enjoy money again?”

My question made them pause. 

Their pause made me think about the lingering effects of trauma. In this case: financial trauma. 

I could see clearly what they couldn’t because of their proximity to their lived-experience. 

Today, their financial footing is strong. They’ve done an incredible job rebuilding the conditions of their family’s financial life. 

However, you wouldn’t necessarily know this based on how they talk about money, think about it, and behave with it. 

It’s as if they are still in survival mode. That’s how deeply scarred they are by their family being thrown into a financially precarious situation. 

But at some point, the mindset, skills, behaviors and fears (yes, fears!) that once served you in survival mode tend to hinder you as you aim to move forward.

Financial Trauma

According to the American Psychological Association, trauma is defined as “any disturbing experience that results in significant fear, helplessness, dissociation, confusion, or other disruptive feelings intense enough to have a long-lasting negative effect on a person’s attitudes, behavior, and other aspects of functioning.” 

In 2016, Dr. Galen Buckwalter conducted a study, which found that “nearly one in four Americans and one in three millennials suffer from PTSD-like symptoms caused by financially induced stress.”  

In other words, a lot of us are walking around managing some degree of financial stress.

Actually, I am of the belief that everyone worries about some aspect of their money – even if that worry is low grade. Because, from my perspective, worry is not just relegated to those in survival mode.

And from my non-scientific perspective, financial trauma comes into play when the circumstances that cause you stress have changed, but your beliefs, choices and behavior haven’t. 

Trauma – financial or otherwise – shapes your beliefs, behavior, and choices. 

It shapes how you view the world and your place in it. In other words: do you feel safe and secure?

It shapes the degree to which you trust yourself and others.

It shapes the extent to which you feel you have control over what your future looks like.

And especially when it comes to money, it determines if you’re able to unclench your fists and stop waiting for the next financial catastrophe. This is the case with my friend. That’s why one of the things I’m trying to get them to see is this: 

There’s a difference between being on constant guard waiting for the next “bad” financial surprise vs. planning to be prepared for any surprise.

The distinction may be subtle, but it is HUGE!

Signs of Trauma

To appreciate this distinction, though, requires recognizing the less obvious signs of financial trauma. 

The more obvious signs would include emotions like anger, depression, and mood swings, for example. Please note: I am not dismissing the importance or powerful impact of these signs. 

But I want to call your attention to certain behaviors you might be practicing that you may not view as signs of financial trauma. And yet, they very much are – because of WHY you do them.

For example:

Financial avoidance

Do you avoid opening your bills or your banking, credit card and investment statements?

Do you avoid talking about money in key relationships?

Are you continuously deferring critical decisions and tasks? 

If you’ve answered yes to any of these, do you know why you do this? What are you afraid of discovering? What are you afraid of having to do next?


Are you compulsive with your spending? 

Do you splurge, only to feel immediately guilty afterward? 

Do you spend to “feed” an emotional need that isn’t getting met?

What would happen if spending money weren’t used as a tool (even if unwittingly) to do what it wasn’t intended to do?


On the flip side of overspending, there’s not spending money beyond the basics. You don’t give yourself permission to enjoy your money – at all! Even though you have it to spend and doing so wouldn’t thrust you into a problematic position.

Are you overly cautious when it comes to spending? Do you view this tendency as a form of underspending? Do you see this as a reflection of your relationship with risk?

If you’re underspending, what could you do today to shift away from this tendency?


That there may be a relationship between underearning and financial trauma may be an unusual dot to connect. But bear with me for a moment…

Because if you’re constantly charging less than the value of what you’re offering, coupled with what you need to grow your business in a sustainable way, plus what you need for your personal finances to be healthy, it’s a connection worthy of exploration.  

So, are you prone to underearning? Is this because of how you view the relationship between work and money – and more specifically “hard” work and money? Or, is it related to something else?


Are you critical of the choices other people make with their money? 

Do you find yourself defining what “enough” is for them – based on what you’ve experienced, what you have, and what you’ve overcome? 

Moving Forward

Financial trauma can show up in a multitude of ways. And I am fully aware that the five I’ve shared in today’s piece is not by any stretch an exhaustive list. 

But I purposefully chose these five because they likely aren’t the typical signs you might associate with financial trauma.

I am curious, did you have a “yes, I do that and I may be suffering from financial trauma” moment as you read these examples?

I don’t ask this question to trigger emotions of depression, or guilt, or shame, or anger. (If any of these surface and you realize you need professional help, please seek it.) 

I ask because you may be missing out on an opportunity to deepen your awareness of the “silent” influences on you and your money.

You may be missing out on an opportunity to give yourself permission to allow your beliefs and desires to evolve – and maybe even catch up to your new financial reality. 

Look, you don’t get to this point in your life + money journey without any financial stresses or setbacks. None of us do! 

However, when you think about your financial journey to date, what stands out? Particularly, when you reflect on your financial setbacks? Have you learned the lesson and moved on by integrating those lessons into your decisions and choices? 

Or, are you stuck? If so, financial trauma may be present.

How have your past financial experiences affected how you currently talk about money, think about it, and behave with it? If your answers to these are mostly negative, financial trauma may be present.

Like with all traumas, the first step to healing financial trauma is to “see” it for what it is, explore how it is and has impacted you, and commit to taking small steps each day. 

As I told my friend, the goal is to move forward with an awareness of a) what the financial trauma is, and b) how it has affected you. Yet not stay stuck. It’s my belief that doing this will be a key component to their success. And yours, too, if you’re suffering from financial trauma.

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