She's On The Money - Unpacking Financial Trauma

Episode Date: September 13, 2022

Most of us carry trauma of some sort, be it from childhood, relationships or other countless experiences that cause ongoing pain. And this is no different when it comes to money. On today’s episode we are talking about a lesser known trauma, but one we hear about all the time in our community - financial trauma. We define it, talk about they ways it manifests and things you can do if you are experiencing it.Acknowledgement of Country By Natarsha Bamblett aka Queen Acknowledgements.The advice shared on She’s on The Money is general in nature and does not consider your individual circumstances. She’s on The Money exists purely for educational purposes and should not be relied upon to make an investment or financial decision. Victoria Devine and She's On The Money are Authorised Representatives of Infocus Securities Australia Proprietary Limited ABN 47 097 797 049 AFSL - AFSL 236523.See omnystudio.com/listener for privacy information.

Hello, my name is Natasha Nabanunga-Bamblett. I'm a proud Yorta Yorta, Kurni, Wolperi and Awadjuri woman. And before we get started on She's on the Money podcast, I would like to acknowledge the traditional custodians of the land of which this podcast is recorded on Awadjuri country, acknowledging the elders, the ancestors and the next generation coming through. As this podcast is about connecting, empowering, knowledge sharing and the storytelling of you to make a difference for today and lasting impact for tomorrow. Let's get into it. She's on the money.

She's on the money. Hello and welcome to She's On The Money, the podcast for millennials who want financial freedom. Most of us carry some sort of trauma with us. It could be from our childhood, maybe a past relationship, or really any significant experience that has caused us ongoing pain. The word trauma is often used to describe very painful and extreme situations that mark our universal human struggle. And this is no different when it comes to money. On today's episode of She's on the Money, we are talking about a lesser known but very prevalent trauma, and it is, of course, financial trauma. My name is Georgia King, and joining me as always is

Victoria Define. V, how are we? Hello, Georgia King. I am not excited, but I'm looking forward to this because I feel like financial trauma has for a very long time not been recognised as as legitimate as other types of trauma when it absolutely is. So I really am looking forward to sharing this and I hope that, don't hope that people relate to it, but I hope that it validates some people's experiences so that they know that they're not alone on this one. It's not something we've spoken about on the podcast before. It's not really a term I've heard of at all, to be honest. So I am super excited to dive into it and hear what it is all about. You've got some stats off the top?

I do. I do. I've taken your job as stats gal. Obviously, really looking forward to diving deep on this one. Financial trauma is obviously very common, sadly, and makes total sense as money is very easily linked to our sense of security, our safety, our status, and our power. And a survey that was conducted by Payoff in 2019 found that one in three millennials suffer from acute financial stress, also known as AFS. And the point of this episode is to shine a light and validate people who are experiencing this. Fortunately, we are living in a time where conversations around mental health are thankfully becoming increasingly more open and common, and we are understanding how better to deal with and identify these painful experiences with less stigma. Win. Financial

trauma is one we hear about all the time in our community. Not so much coined by that term, but the experiences that a lot of our community have had or shared with us, I would absolutely categorize as fitting into the financial trauma space. And it's often one that manifests in our actions and attitudes towards money. It often goes unnoticed or is passed off as logical or reasonable behavior, which is absolutely not the case. All right, V, I'm going to throw two really common terms out there for us to chew over. First is retail therapy and the second is tight ass. Oh yeah. And I bring these up because they come up all the time. We flippantly use them all the time. She's a tight ass. I mean, you probably hear it a fair bit when people are

talking about you, George King. But does that tie in to financial trauma in any way? Ah, look, yes and no. Maybe retail therapy is your thing. And when you're feeling down, you can't control the urge to splurge. See what I did there? Need that dopamine hit. I get it. I'm going to do a whole episode really soon, G, on emotional spending, because I feel like that's a topic that we need to discuss as well. Because things like, quote, shopping addictions, ha ha ha, actually are really serious. And they actually do impact people's mental health. And they actually we do have an emotional connection that we need to delve deeper into because they're not funny and they're not things that we should flippantly laugh about and be the reason why we're bad at

money. Like it's not okay. And then when we look at the term tight ass, maybe you are tight with money to the point where it takes up all your energy and all your brain space and you can't part with money without intense anxiety. That's a completely different thing than the way I flippantly throw it at you, George. I call you that because you're just a really good saver and good at managing your own values and beliefs around money. And it's kind of funny in that context. So I think it's interesting to see both sides of that because I know you deeply enough to know that that's not an issue. Whereas if you threw that term around someone who genuinely was suffering pretty severe money anxiety, that just might perpetuate it. And we need to be really

careful, George, because as much as some people use it really flippantly, these terms can impact you if you are experiencing really significant financial stress or financial trauma and you never know. Okay. Speaking of financial stress versus financial trauma, are they two different things or are they the same? Yes, they are very, very different things. Stress can be used to motivate us. Like put a little bit of pressure on me to organize podcast recording because it's tomorrow. I'm going to do it. Stress drives me, guys. That's fine. I've seen it done many times. That's manageable stress. However, sometimes that extends beyond being a motivator and becomes very detrimental to someone's life. Whereas trauma can shut down our ability to take helpful action

entirely. And it usually stems from a traumatic experience. Financial stress might be like, oh, I just get a bit stressed when I organize my budget. You doing budgeting if you have significant trauma in your history is a different topic completely, G. So financial stress is something everybody experiences. We all have it. Life is expensive and our wages often don't match the things that we want. This can cause emotional and physical distress and can be ongoing through life at various different stages and different levels. And then financial trauma is characterized as a dysfunctional reaction to chronic financial stress. The indicators of financial trauma are often really similar to those experienced by people with post-traumatic stress disorder,

which I find not surprising but some of you might be like wow I didn't realize it was so significant yeah and it is they manifest in several different areas of a person's life they often prevent them from ever feeling successful safe or at ease when money is concerned and it doesn't take a long period of stress around money to ingrain financial trauma and it's easily passed down from generation to generation as unconscious belief systems so does this have a lot to do with our money stories and where we've kind of come from. Yeah. So part of your money story could be financial trauma. If you think about it, it makes sense. Like if you've got financial trauma in your money story, that's something you need to work through and really recognize because trauma is

going to, in any sense of the word, impact your life if you don't address it. Actually on that V, my next point was that epigenetics. So that's the study of your behaviors and the environment and how that can cause changes and affect the way your genes work. That actually tells us that trauma can be passed down generationally. So should we be looking at financial trauma in the same way? Yes, absolutely. I mean, it's not ingrained in your genes in the same way that epigenetics is. However, your parents' thoughts, values, beliefs around money are what you grew up with.

Your parents, your caretaker, whoever brought you up or whoever you were exposed to as a child is going to have some level of impact on you. If you grew up in a really wealthy household and money was never an issue, maybe you don't get that pit in the bottom of your stomach when money comes up. But if you grew up in a household where money was scarce and mum and dad argued all the time over what they could and couldn't afford and put some guilt on you, George, when you said you wanted to do dance lessons but they couldn't afford it, maybe now as an adult when you want to do anything for yourself, you harbour a lot of guilt and a lot of anxiety

when it comes to making decisions for yourself or treating yourself because every time you've ever tried to treat yourself, it's been met with negativity. Whereas a completely flip example of this is maybe mom and dad had really tight budgets and didn't have enough money, but they were really positive about it and they really taught you, all right, gee, we don't have lots of money, but it's a tool and we use this tool to create the life we want. And you go, I really want to go to dance lessons. They go, all right, gee, unfortunately we can't do that right now. Have a look at the budget, you understand that as a child, you don't harbor the same amount of trauma because of the way it's been dealt with. So absolutely, it can be passed down. Gee, was

there bankruptcy growing up? Was there shame around unemployment? Was there detachment or complete refusal to discuss money as a family? Maybe you had an urge to jump in and pay for other people when it wasn't expected and you just can't afford it. That could actually be part of your trauma story it's bigger than what you might think it is okay obviously emotions are really closely tied to our financial choices we talk about it all the time so if we try and take our emotion out of it does crunching the numbers and coming up with a strict budget that makes sense and gives us that clarity is that going to help us solve the problem or is it okay sorry sorry you can't just I mean if you would like to do a budget there is a free budget on my website

you can go and download it. Absolutely no catch. Go organize your finances. I actually really want you to. However, when it comes to financial trauma and dealing with it, just budgeting is not enough. We need a holistic approach. And I know you know that I love a budget and number crunching, but we really need to be paying attention to these feelings and considering why they actually exist in the first place. You won't be free even with a budget and different formulas if you're carrying unconscious trauma, because at the end of the day, it's going to work against your best interests. I could sit you down with a budget, G. Doesn't change anything unless we know our money story. So probably a counsellor, but we will be talking about ways

that we can work through our financial trauma on the other side of the break. And we'll be talking about plenty more. So don't go anywhere, guys. V, let's dive straight back in. Can you please provide some really clear signs of financial trauma? All right. So the first sign of financial trauma I'd say is financial avoidance. Yep. So this could look like not opening bills, not interacting with bookkeeping as a business owner, or avoiding any and all types of conversations around finance. This is linked inherently as humans to our fight, flight, freeze or fawn response. And at its most intense level, it's dissociation. So from my perspective, G, this response makes a lot of sense for someone whose relationship to money is paired with intense

feelings of fear or pain or insecurity, and they can come from any experience. So there's no categorization of what the trauma has to be to mean that you experience it. Same as other types of trauma. One thing to one person might have a completely separate outcome as another. There's no that was trauma or this wasn't. These are the feelings. And if that's how you're feeling about an outcome or a circumstance or an experience in your life, then you are carrying trauma, regardless of what it is. I really hate when people compare it and say, oh, but someone else has it worse. That is not how this community works. Everybody's concerns, everybody's experiences are valid and you are more than welcome to feel your feelings even if someone over the other side of

the world or even across the other side of the room has had an arguably quote worse experience that doesn't invalidate the feelings that you have yeah one of the things we talk about a lot in the community is compulsive spending and overspending could they also be signs of financial trauma of course they could be so this could look like anything from spending too much money on eating out or splurging on major purchases with money that you don't have, which I think can be really common. I used to do it. I was carrying a level of financial trauma. I got through it because I worked through my money story and have decided to re-pivot that and change. If you're someone who is struggling with that, it's really important to do some internal

reflection. And I know it can be really hard asking yourself why you might be doing that spending because you're trying to soothe the pain that you haven't recognized. Or maybe you're a little bit like me in that you chase a dopamine hit. So as you guys know, I've spoken about it on the podcast before, I have ADHD. I chase dopamine hits, love spending money. That's why I have to be so clear about my budget and cash flow and be on top of that because otherwise it will get out of control. So obviously I love a dopamine hit, George. Which ADHD person do you know that doesn't love a dopamine hit? But basically the response of overspending can stem from the common narratives around money in dominant cultures. For example, if you ever feel

bored or sad or lonely or inadequate, something's wrong with you or you need to fix it right away and you can do that by buying something or consuming something. Like that seems to be a pretty common response, right? Not feeling good about myself. Do you know how I'll make myself feel good? I'm going to go buy a nice new outfit that'll make me look good and then I'll feel good. That is the mentality behind a lot of overspending. In many ways, overspending can actually be a form of financial avoidance, even though you're spending, because consumption is a really temporary way to deal with pain while avoiding the reality of your bigger financial picture. How do you know if it's financial trauma or if you're just being financially careless,

though? I think the difference is around, you know, how we went back to the stress, the anxiety, the dissociation, the feeling of not wanting to address those things. I think you'd pretty clearly be able to say after listening to some of this podcast, oh yeah, I'm just not across my budget and I just, I don't care to, yeah, I'm actually burying my head in the sand. And when I go shopping, that's one of my coping mechanisms. I think there's a very different feeling to those things and you might not be able to directly identify it. And if that's you, I think we need to sit down and have a little bit of a think about why do I do the things that I do? Where is this coming from? Why am I overspending? You know, there's lots of reasons why people

overspend. I mentioned ADHD before. Neurodivergent people are very good at overspending. It's got nothing to do with financial trauma and everything to do with the most neurodivergent people are actually chasing more dopamine hits than the average bear. So there are lots of different reasons as to why you could overspend. But I think we need to look back at what I said in the first half of the episode that financial trauma is characterized as a dysfunctional reaction to chronic financial stress. We're not just a little bit stressed. It's chronic. It's really, really bad. So with that said, V, I feel like what I'm garnering is that a lot of this stuff is compulsive. It's not just I love shopping on the weekend. It's a real drive that you can't fight.

Am I right? Is that? Yeah. Yeah. Like when we talk about overspending, there's just a lot to it. Obviously, it could be some trauma. It's just one of the indicators. However, when we talk about compulsive spending, compulsive spending could be likened to an addiction. Like someone compulsively uses drugs or compulsively goes to the pokies. It's not something that they feel like they can control. It's not just like, ha ha ha, I just bought a new dress. I can't control myself. Like, no, that's not it. And we actually really need to be quite serious about these topics because as much as it's, you know, a little bit of fun to buy a dress that, cheeky, you shouldn't have bought on a Friday night to go out with the girls,

that's not compulsive spending. Yeah. Okay. On the flip side of compulsive spending, V, is compulsive underspending a thing? Yes, absolutely it is a thing. I mean, it's probably not a coined term, but we are going to coin it right here and now. But a severe lack of spending, even when the money is available, can also be a really big indicator of financial trauma. Excessive risk aversion is connected with fear and scarcity around money. And that could actually stem from someone having experiences in life where money was really tight and that now causes fear and trepidation around spending. And that can be crippling because you might be putting off spending you have to make. So I know of circumstances where

people literally put off spending money on their rent because they just feel such an anxiety of having that money go out of their bank, even though they've got more than sufficient funds. they refuse to go to the supermarket and buy a healthy diet because they're so anxious about spending money. Like we're not talking here about, ha ha ha, I don't spend money and I am a little bit anxious sometimes because I'm trying to save for a house. We're talking, this is crippling. And I think that those are the terms that we need to keep in mind and not just flippantly go, oh, well, I have some financial trauma and use that as a brace to justify your spending habits. Yeah, I think that's one of the things worth pointing out is that trauma can be a word that's

really overused in 2022. So I think clarifying that this is a real, in quotation marks, thing that people are dealing with is important because I think a lot of people might look at this episode and be like, financial trauma, I've heard it all, but this is really legitimate. No, I agree. And I would summarize this here. I know you've got some more questions, but if you have financial trauma, I genuinely believe you need some level of therapy. like you need to go and work through those things and often the same with all other trauma often it's not something you can work through on your own because it's not just a little bit stressed and i can grab a stress ball and work it out like that's something that actually requires

some deep work and that's hard and you know plugging right here our debt-free hotline friends they are the perfect resource because they're free financial counseling you don't have to be up to your eyeballs in debt to reach out to a financial counsellor. It could just be stress and anxiety and not feeling like you can get on top of your money. Or you're really not sure what you want to say to a financial counsellor, but you just listened to this episode and it's resonating. Maybe start the conversation there. We will get to some more solutions if you are someone who's struggling. So hang around to the end of the show for that. And we will, of course, link the everything in the show notes, of course. But V, how important would you say healthy boundaries

around money are when it comes to this stuff? Very. Regardless of whether you have financial trauma or not, I think that there always should be healthy boundaries around money. In fact, we're talking offline about our future show episodes and I said, let's do a financial red flags when dating because I genuinely think from the very start of any relationship, we need to have healthy boundaries and we need to be able to identify what that actually looks like and what a red flag looks like if it comes up. So from my perspective, having a lack of boundaries or discomfort with setting boundaries around finances really looks like undercharging. If you're a business owner, I'm talking directly to you or under earning and not being willing to

negotiate your own salary. Not negotiating for wages yourself is actually an indicator that you're not placing, from my perspective, enough value on yourself. Not making clear payment terms on contracts is another indicator. People will go into business without clear contracts around the working relationship that they have. And while it can be uncomfortable for anyone to navigate money conversations, let's be honest, a repeated lack of boundaries around finance can be an indicator that there might be some trauma that's present that is stopping you from standing in your power and advocating for what you need in that relationship. And this could stem from learned mindsets that put a cap on your perceived worth and prevent you from believing that you actually

deserve more. So all of that to me is really important, but healthy boundaries around money are always a priority in this house. All right, let's finish off today's show, V, by talking through what we can do if we are struggling with the repercussions of financial trauma. Where do we start? So just like any other form of trauma, financial trauma has a whole host of resources that you can lean on to help you through it. It needs to be brought into the light and given far more time and space though. So that's what we're hoping to do with this podcast. And it needs to be unpicked and challenged and soothed. So here are some things that you can do. I mentioned before, get some counseling, go see a psychologist. If you're in a circumstance

where you're able to pay for that advice, fantastic, head to your GP, talk to them about a mental health care plan. If you're in a bit of a financially constrained circumstance, still head to a GP, bulk billing GP, talk to them about a mental health care plan and get a bulk billing psychologist. That will mean that you will get a minimum of six, but according to, and I'm pretty sure this is still true, up to 20 sessions because of COVID with a psychologist that will literally be bulk build and that can be really helpful. When you're feeling triggered, notice what's happening with your body and use your senses to regulate your nervous system. So this is something that I do, might help you, but breathe, focus on your sense of smell and

the space you're in and ground yourself. Something I find really helpful, especially if I'm quite stressed is to just go on YouTube and look up grounded breathing exercise. And there are a whole heap of free videos that you can just do and follow along. I don't expect everyone to know how to ground themselves, but if you're feeling a bit panicked or a bit stressed, that can help a lot. Separate yourself from this narrative. So if it's like, I'm bad with money or I'm horrible with money because I have credit cards, it's okay. It's all right. I can see where you're coming from. But let's separate ourselves from the narrative that our money story defines us because it doesn't. Our money story happened to us. Great. Do you know what we can't do?

Change that. Do you know what we can do? Change the future. We can put ourselves in a better circumstance. We can rewrite generational trauma. We can rewrite generational money habits and thoughts and values and beliefs, but we actually have to put in a bit of work to do that. And we need to change the story we tell ourselves, right? Because that happens in so many different areas of our lives. Exactly. It's a self-fulfilling prophecy. We also just need to change the language like, oh, I'm horrible with money because I have credit card debt. No, you're not. Have you learned how to do money before? No, I'd argue you haven't because there's no financial literacy program taught in schools in Australia. Most parents have not sat their kids down and taught

them the basis of financial literacy. It's a product of your upbringing, not of your intelligence. And I think that if we can just go, well, I have a credit card and I'm going to get out of it because I'm smart enough to do that. Fantastic. Let's reframe and rewrite that narrative. Do things as well quite gently, but explore your own story, maybe journaling or writing or letting the subconscious stumble out onto paper without any type of regulation. You're not writing for somebody else. You're writing for yourself so that you can understand it. you can rip the paper up later. You can hide it. You can burn it. You can do whatever you want. Flush it down the toilet if you're worried about people seeing it. But I think that that can

actually be quite a soothing process to get things out. It helps. And to organize your thoughts. It's definitely super helpful. Yeah, it can be. Positive affirmations, I think, are really important. We love that. And then forgive yourself and be kind. Like, if you can't be kind to yourself, how are other people going to know how to be kind to you? I think it's just be kind always. but be kind in particular to yourself so that's all i've got george brilliant and as you said earlier like not comparing your trauma to anyone else's and if you are feeling rubbish own that and don't feel like you can't feel that way because the way you feel is valid as you said absolutely it is as we flagged earlier as well we will be linking to the national debt helpline in

the show notes fee was there anything you wanted to add before we head off nope i think that is That's all we have time for today, my friend. So if you could just wrap the boring but important stuff, it would be appreciated. With pleasure, my girl. The advice shared on She's On The Money is general in nature and does not consider your individual circumstances. She's On The Money exists purely for educational purposes

and should not be relied upon to make an investment or a financial decision. Victoria Devine and She's On The Money are authorised representatives of In Focus Securities Australia, Proprietary Limited, ABN 4709-779-7049, AFSL 236-523. We will see you on Friday, guys. Be kind to yourselves.