How Financial Trauma Stops You From Achieving Your Goals

If you've been stuck in certain money patterns for a while, it could be a sign that you've encountered financial trauma in the past. Maybe you've been unable to shift your level of savings and actually accumulate meaningful savings. Maybe you've been stuck in debt or maybe you've been unable to break through and achieve your income goals. Often when the same patterns repeat themselves over and over again, there's a deeper root cause that may not be presenting itself on the surface.

In a lot of cases your relationship with money is actually impacted by your early money paradigm - i.e. the way you grew up around money and what you experienced by observing adults around you, particularly your family. It can also be a combination of your family paradigm and financial trauma. In fact, financial trauma can actually have a compounding effect on your family paradigms around money.

What is Financial Trauma?

A financial trauma is an event that usually occurred sometime in your past. The actual event itself at the time may or may not have been emotionally traumatic. The impact of a financial trauma is really around the bottom line. When you look at your finances today, whether that's the state of your savings or any debt that you've got or your income and income earning potential then it really makes you think back to that old event. You might say something to yourself like, "You know, if only that hadn't happened, I would be so much further ahead." So it generally relates to something that has left you scarred or wounded and you see your limitations today as being driven by that event, like a pivotal moment in your past.

Examples of Financial Trauma

An example of financial trauma could be events around business failure. Maybe you really put your heart and soul into a business idea, maybe you invested a lot of money in it and for whatever reason it didn't work out. It could also be an investment gone wrong. Maybe you put something really meaningful into that business idea, like your life savings - possibly in the form of your superannuation or 401k - and for whatever reason that didn't turn out and has left you really scarred.

The other type of event that can be a strong financial trauma for a lot of people is being in debt for the first time. Getting a credit card for the first time can bring on a sense of freedom and empowerment, but when credit cards are not managed well, things can easily get out of control and people can spiral into more and more debt.

Another example of financial trauma can be a missed opportunity, particularly around real estate. A lot of people feel a strong sense of regret from missed opportunities where they wish they had they purchased a property say 10 or 20 years ago and they think about how different life would be or how much further ahead they would be now.

The common theme with financial trauma is that the event had a really big impact on you at the time and that it's still showing up in your finances today. It could be showing up in the exact level of your debt or your inability to save or a ceiling that may be imposed on how much income you're able to earn. The starting point is to try and identify whether there is a financial trauma there and quite often just thinking back to that memory can bring about quite painful memories.

Impact of Financial Trauma

Some of the ways that a financial trauma may impact you today is you might find yourself unable to reach your goals. For different reasons and in different ways you might bring about self-sabotage where you might be working really hard and you've got all these great strategies and plans in place which you start to execute, but every time you almost get there, something gets in the way to pull you back down or you don't quite complete things. Maybe you don't fully follow up and you let lots of opportunities slip through your fingers.

Another way financial trauma might impact you is through the inability to save. It could be that you do have money left over at the end of your pay cycle but for whatever reason, you find ways to spend that money. Things come up, they kind of grab your attention or you might even find that every time you have a pool of money left over, a crisis happens and you've got to dip into your emergency savings.

For a lot of people quite a painful form of financial trauma is not being able to get out of debt. It could be that ever since you triggered a cycle of being in debt, you’ve found yourself getting deeper and deeper into debt and unable to break out of it no matter what you do. I want to explain to you why financial trauma impacts you in this way.

You might be wondering why an event from the past, such as a bad business deal, would mean you're in debt today or that you can't save today. It really comes down to the fact that we store different types of energy in our nervous system. You can see this when you walk around and you interact with people.

Some people come across as just naturally happy and joyous and full of energy whilst other people might seem really low on energy and other people quite tense. We have our personalities and our character traits but we also carry a certain energy with us and that can be shifted and it can be changed because we certainly were not all born the way that we're walking around today, particularly if you are carrying negative energy.

What happens is that we become wired to store certain types of energy and when something is quite traumatic and it leaves an impact on you, if you don't know how to deal with it at the time or subsequently how to clear it, then you end up carrying that energy around with you. When you carry really strong emotions, they need to find an outlet, and that outlet becomes your current relationship with money.

When we talk about financial trauma there are two dominant emotions that pop up in our interactions with money. The first emotion is sadness which is caused by loss-based financial trauma. Feelings of loss occur when we dwell on what could have been and the whole event might feel really unfair to you. Sadness is quite a low-energy emotion.

The second dominant emotion around financial trauma is anger, which is quite a strongly fuelled emotion. When you have anger associated with a financial trauma it can be in two forms:

1. Anger at yourself by you looking back on the situation and saying, "Well, I was naive, I shouldn't have been so stupid, I should have known better" or.
2. You can also have anger at other people, especially if it's around a business loss that involved other partners or even investments where somebody gave you advice that didn't really pan out. Working through anger-based financial trauma is not about trying to pass on the responsibility; it's about identifying whether you do have anger that is directed at other people.

It’s important to deal with any anger ahead of sadness because once you clear that anger, often you will find that the loss and sadness is sitting beneath the surface-level agner.  

The simple truth is that if you don't know how to clear these emotions out of your nervous system, they will continue to exist within you and they may get triggered really easily, especially through your interactions with money.

These emotions need an outlet and they need a way to keep reappearing. They will keep setting you back through the same patterns until you learn how to deal them and how to clear them.

I'm going to go over how to actually deal with and clear loss-based or anger-based financial trauma in my next update.

If any of this resonates with you then please leave me a comment or contact me via the links below and I'll be more than happy to chat to you about it.

To your success,

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