Do I Have Money Trauma?: Budgeting, Shame and Capitalism | Financial Trauma

Financial Trauma Money Trauma

With the rising cost of living in most parts of the world, it’s becoming more common for people to come face to face with certain feelings when forced to deal with money. Whether that’s budgeting for the month, looking for places to live, needing to access the food bank or fighting with yourself over how much to save vs. spend. Under capitalism, it’s hard not to be consumed by thoughts and feelings around money and those thoughts and feelings? Yeah, they can take a toll on your mental health.

What is Money Trauma?

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To put it simply, money trauma or financial trauma refers to the experience of trauma that’s related to a specific or ongoing event that has to do with money. For example:

• Job loss
• Growing up in poverty
• Inability to retire
• Loss of assets

At the same time, there can also be the more broad idea of trauma of money. Trauma of money considers how experiencing any trauma can impact our relationship with money and money-related behaviours. As Chantel Chapman, creator of Trauma of Money brings attention to – trauma impacts our ability to feel safe, secure and worthy; money, at it’s core also controls safety, security and worth.

So, when a trauma occurs, it’s not uncommon to see behaviours around money change in response, even when the trauma itself was not directly related to money. For example, someone who has experienced domestic violence may find themselves hoarding money once they get out of that relationship as a way to feel secure and safe. For this individual, hoarding money may feel like giving themselves options – always having the option of leaving a bad situation.

What is Financial Shame?

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Financial shame is exactly what it sounds like – shame surrounding money. It is a physical and emotional experience, similar to anxiety, where autonomic nervous system activation can result in overwhelming feelings of fight or flight, overthinking or inability to think clearly, etc. For many, financial shame feels like a deep sense of embarrassment regarding finances or feeling like you’re flawed when it comes to money.

Financial shame can come from many different areas and often involves a trauma or scarcity:

• Generational
• Relational
• Societal
• Systemic
• Financial Literacy

Since this feeling is based in a sense of scarcity, abandonment and embarrassment; our economic culture which is founded on scarcity, competition, and exclusion, only compounds the expectation of individualized responsibility which leads to more avoidance, unhelpful soothing behaviours and/or a freeze state. This is why the opposite of financial shame is acceptance and belonging (community).

The Role of Capitalism, Consumerism and the Systems That Be

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What does our current society (at least in North America) value most? Individualism, consumerism, productivity, perfectionism, wealth….I could go on. All of these values relate directly to money and the ways in which our societal systems have created and continue to reinforce and exploit trauma and financial shame.

Maybe you cope with intense feelings by shopping, or you feel jealous when your friend upgrades to the newest iPhone, or you feel shame when you had to thrift furniture for your new apartment rather than buying new. That’s consumerism for you – and we’ve all been conditioned to seek the instant gratifications, hits of dopamine and feelings of pride that can come along with participating in that system. However, when we do engage with consumerism we are then shamed for any debt we carry as a result. What a vicious cycle we have here.

Capitalism and Trauma

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The trauma you’ve experienced whether it is related to money or not, is a feature of the capitalist system we are living under. For example:

• If you’re trying to escape a toxic workplace or burnout – you’re often acting on your flight response
• When you agree to work overtime or do unpaid labour or work for “exposure” – you’re often acting on your fawn response.

More obviously, capitalism creates financial insecurity and reinforces a scarcity mindset. If you live in poverty, struggle to keep up with the cost of living or for whatever reason are living with chronically unmet needs – you are living without financial security; a sense of safety that tells your body you can rest. This need to be in survival mode, like any other trauma can rewire your brain/nervous system.

While there are resources available for those in needs that can (very slightly) meet some of those needs you wouldn’t otherwise be able to – there’s shame engrained in accessing those resources too. For example, in Ontario, people often call Ontario Works (the government program that supports those in financial needs) “welfare.” While historically this word may have be attached to similar programming, it now carries a stigma and negative connotation that suggests someone is getting handouts for “doing nothing” or “not wanting to work hard.” So, in this way survival is seen as a moral failure which reinforces the capitalist ideal of hoarding wealth (beyond one’s needs).

What Does Budgeting Have To Do With Things?

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The beliefs and messaging that capitalism reinforce dictate how many of us engage with our money. Obviously, as we discussed above – it pushes consumerism and shames survival, but even when you’re not actively participating in the spending part of things, and instead trying to “improve” your relationship with money – capitalism has it’s clammy hands all over that too.

Budgeting is a whole topic in an of itself, and we're going to touch on it very briefly so if you have a desire to dig deeper the Culture Study Podcast has a great interview and podcast episode about budgeting that I recommend. I will also state that, while I have certain opinions of budgeting and believe there are better ways to "budget" than what the mainstream (*cough* Dave Ramsey *cough*) pushes - you do you! 

So, perhaps you’re like the majority of people in North America and you carry a ton of debt – whether that’s student loans, a mortgage, a car loan, credit card debt; or you’re actively trying to achieve goals like buying a house, saving for retirement, etc. A common way to approach both of these is through budgeting. Budgeting under capitalism though reinforces the ideal of individualism. It tells you to look for what’s wrong with your relationship with money – are you overspending on coffee, for example? and doesn’t consider the societal and systemic issues that can be at play. This matters because the feelings of shame that can come up when budgeting (initially for a “good reason” of achieving a goal/improving your money relationship) then bleeds into your self-worth, likely brings up past trauma or even attachment stuff, and can weave its way into your relationships and life in other ways. This often leads to disruptions like financial avoidance, financial control or compulsive soothing behaviours as a way to deal with the difficult feelings when interacting with your money.

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We often hear from “budgeting/finance experts” that if you can’t balance your budget, or you carry too much debt you just need to get another job, never step foot in a restaurant again, remove all joy from your life that costs you money – how very individualistic, ableist, idealistic, and honestly just plain sad of them! It’s no wonder we can find ourselves in a place of avoidance when it comes to our finances and self-blame when we finally sit down to look at things and attempt to change that relationship with money. Let’s not even get into the lack of financial literacy that many of us have thanks again to shame and not wanting to talk about money. So yeah, while we obviously hold some responsibility over our money and choices this isn’t all on you. Society does have a role to play in who can meet these enforced “money rules and expectations.”

Conclusion

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To sum things up, money trauma and financial shame are interwoven and financial shame in particular is something that shows up constantly in our current society. Shame is associated with debt, with accessing government resources, with how we budget or handle money. It’s there whether the relationship we’re trying to have with money is good or bad, a means of survival or an attempt to thrive. All this shame we carry and the ways in which we interact with money can be associated with specific financial events and lead to trauma, or they can be a response to past traumatic experiences; either way they can significantly impact your mental health (often in ways that don’t feel obvious or connected).

Note: Stacey is currently in the process of completing the Trauma of Money program and aims to be certified later in the year.

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