The child who learned to equate love with material gifts might grow into an adult who overspends as a means of self-soothing. The child who experienced financial instability might develop a scarcity mindset and no matter how much money is saved, still feels it’s not enough.
When we face neglect, instability, or a lack of resources growing up, our brains develop coping mechanisms. Unfortunately, these mechanisms don’t always serve us well in the long run.
You’re reading this because you want to be confident about your finances, but you’re not too sure about how your past experiences may have affected your relationship with money. Money is deeply intertwined within our belief systems, our past experiences, and our sense of self-worth.
Working directly with clients as a financial advisor for over a decade, I’ve seen first hand how these factors play out, observing people sabotage their financial lives unknowingly, due to past trauma.
The Impact of Trauma on Wealth
Trauma, particularly when experienced during formative years, can leave a lasting imprint on our subconscious. A study published in the Journal of Financial Therapy found that adverse childhood experiences (ACEs) have a significant correlation with financial self-sabotage in adulthood.1
Subconsciously, these early experiences can lead us to reject wealth. It’s not that we don’t want to be successful; it’s that deep down, we don’t believe we deserve it. I’ve seen clients who are on the verge of a major breakthrough, only to pull back at the last moment – It’s not about the opportunity itself; it’s about their belief in their worthiness to seize it.
The Changes That Need To Be Made
So, how do we break free from these subconscious chains? It starts with understanding and then actively working to change our mindset.
Statistics show that we are the average of the five people we spend the most time with. Evaluate your circle. Are they uplifting? Do they encourage growth and prosperity? Or do they tempt you to spend or try to keep you in your past?
Positive affirmations can reshape neural pathways in the brain, a concept backed by neuroscience. Most people feel weird about it, but the reason why it usually feels so weird is because we are often uncomfortable being nice to ourselves. After an extensive amount of research, I put the process of changing your money mindset through affirmations in a book called 31 Badass Money Mindset Affirmations. You can find it here, if you’re ready. Start and end your day with affirmations like, “I am worthy of abundance,” and “Every decision I make multiplies my income.”
3. Hobbies and Interests:
Engage in activities that promote a growth mindset. This could be reading books on personal development, listening to podcasts about financial freedom, or attending workshops. Listening to people that have faith in themselves, and promote self love/acceptance can show you the gaps you’re experiencing in your own self talk.
4. Values and Actions:
Align your actions with your desire for wealth. This means budgeting, investing, and seeking financial education. As you take control of your finances, your belief in your ability to manage and accumulate wealth will grow. (P.S. most people hate the idea of budgeting because they think it automatically means they’ll have to give up what they love for financial security)
5. Seek Professional Help:
Majority of the time, the roots of our beliefs are deep and complex. Don’t be afraid to seek the help of an advisor that specializes in rewriting these mindsets (like me, of course) and/or a therapist or counselor to work through past trauma.
Changing your money mindset isn’t an overnight process. It requires intentionality, consistency, and sometimes, a willingness to confront uncomfortable truths about our past. By making the hard choices now, we open ourselves up to a world of financial opportunity.
- Ross, D. B., Coambs, E., & Johnson, E. (n.d.). Trauma of the past: The impact of adverse childhood experiences on adult attachment, money beliefs and behaviors, and financial transparency. New Prairie Press. https://newprairiepress.org/jft/vol13/iss1/4/ ↩︎