Chantel Chapman had a personal awakening at the age of 21. Suddenly, she began to make the connection between her troubled relationship with money and her troubled childhood.
“I was spending too much on clothes for me to fit in and people to accept me,” Chapman said.
“I was also doing a lot of under-billing in my business. I was constantly giving things away for free, I had really low prices, and I was just giving and giving, and it was a habit of mine.
Inspired by her achievement, Chapman has spent the past 15 years working as a financial literacy educator. She also co-founded the Trauma of Money method, a platform that helps clients with money problems and trains financial professionals and therapists.
Recognizing trauma and addressing financial blockages can be difficult, but as Chapman’s experience shows, breaking these patterns opens up the possibility of a stronger financial future.
Understand your money attachment style
To understand the impact of trauma on your financial habits, Michael Reynolds, financial counselor and therapist and founder of Elevation Financial, outlines the different attachment styles people develop when young.
Whether you’re anxious, avoidant, disorganized or secure, your attachment style will often dictate how you relate to money, Reynolds says.
While a secure attachment is the ideal, in reality, not everyone is lucky enough to have always felt supported, protected and cared for in early childhood.
Reynolds goes on to explain that these attachment styles manifest in our relationship with money through patterns, or what are known as “money scripts,” which are essentially our unconscious beliefs about money.
“Avoidance, money worship, money status, and money vigilance: these are all money scripts that can manifest as a result of childhood trauma,” Reynolds added.
But it’s not just childhood trauma that can create these money scenarios — your experiences as an adult can also induce trauma.
And the consequences can lead to severe psychological distress. A study found that nearly one in four Americans live with PTSD-like symptoms brought on by financial stress.
But you don’t need to have experienced something that you consider traumatic to be affected. Simply living in a consumer culture that can be “exploitative” may be enough to affect some, Chapman says.
What is the indicative behavior of money scripts?
Certain spending patterns may indicate underlying issues, such as compulsive spending, inability to set limits on under-earning or under-billing for those who have a business or work as a freelancer, excessive risk aversion, financial co-dependency or the opposite of financial dependence.
But Reynolds and Chapman say the most common presentation of money trauma is avoidance.
“Money avoidance is kind of a pattern where people avoid looking at bills and looking at their bank balance and avoid conversations about money,” Reynolds says.
“Any kind of interaction with money causes them so much stress that it causes paralysis, they kind of shut down and are not able to handle financial decisions effectively.”
Patterns can also overlap. Where there is overspending, avoidance tendencies generally follow. And anyone who demonstrates financial co-dependency likely faces avoidance as well, Chapman says.
However, those with excessive risk aversion may experience the opposite of avoidance.
“They’re constantly looking at their financial statements, they’re constantly checking their bank account to a point where it’s compulsive behavior,” Chapman says.
Identify the story
Tackling this issue head-on can be difficult, as it means first recognizing its roots in trauma, which can be painful.
“The first phase is always to identify the narrative that arises around the avoidance or around the behavior,” Chapman explains. “And it’s really important that we ourselves identify the behavior as a problem. And then from there we ask, ‘What’s the narrative associated with it?'”
If someone associates looking at their finances with the assumption that they are going to see something bad, then they will associate that action with feeling shame. But just acknowledging this opens up the conversation about healing.
“Then we start to wonder, whose shame is it? Where does this come from? We map it to external sources of trauma. So we could say it’s generational trauma, it’s societal trauma,” Chapman says.
Once people realize that they are not their trauma or this experience, they will enter the second stage. This is when you begin to explore your nervous system, where our past response to trauma is stored, and how you respond to triggers.
For example, people who are in a siding tend to freeze in response to trauma, Chapman says. Once you have identified your reaction to the trauma, you will need to learn how to soothe and repair your nervous system.
So how do you do this? Chapman says simple actions like calling a friend, having a therapy appointment, or getting out into nature and moving our bodies can be helpful.
“What we’re doing is we’re exploring all the different resources that we can bring in to support ourselves.”
There are ways to make it easier for you
Dealing with the core issues of trauma can be overwhelming and exhausting. But a few simple tricks can make this process easier. Reynolds says automating trades can really help avoidance by removing the need for decision-making.
“So, for example, setting up recurring monthly contributions to your retirement accounts, setting up monthly contributions to your emergency fund, setting up monthly contributions to your children’s 529 accounts, debt payments,” he said.
As a result of trauma, some people may tie their worth to the money they have and addressing this issue is another important step forward.
“If people subconsciously associate their value with the type of car they drive or the house they live in, they can try exercises to uncover their true values,” Reynolds says.
These exercises can help them uncover core beliefs such as “value” is actually found in being with family or giving back to their community.
“Making these spending and cash flow habits concretely back to real value can bring them back to what’s really important,” says Reynolds, adding that “old-fashioned” budgeting can also help uncover your values.
But if you find you’re struggling with your relationship with money, Reynolds adds that “getting help is hugely beneficial” — especially in a world where there are a lot of “opinions and options.”
He adds that there are even organizations like Advisers Give Back and the Foundation for Financial Planning that offer free support to people struggling with money.
“There’s nothing wrong with contacting a therapist, a financial advisor, or someone trained in both,” he said. “An objective opinion from a third party can go a long way in helping people unblock themselves.”
Is there greater interest in financial therapy?
Ultimately, financial therapy is not only for people who seek to change themselves, but also for people who help others.
Chapman’s client list includes accountants, activists and educators, all of whom help fight poverty.
Chapman says the 25 to 38 age group is the “common age range”. However, she also sees more of a “significant height of elderly people”.
The latter group seeks his services because of their inability to retire.
“I’m approaching retirement age, and I’m not financially able to retire, and I’m in such extreme financial distress, and I really want to understand why,” Chapman echoed their sentiment. .
Reynolds also says there has been “an increase in the number of people seeking help after the pandemic began.”
“I think there were a lot of unusual things going on with the money, including the various [U.S] stimulus programs as well as many changes to the way we work, leading to deeper exploration by some in their careers and businesses.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.