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What is Money Trauma?

By Alyssa Davies 16 April 2024 4 min read

We all have a relationship with money, whether we know it or not. So, let’s talk—about something you might not have heard of before: money trauma. We all have unique ways of dealing with money. We all view the ways that we spend, save, and invest differently. We also all grew up in different households, so for many, the way we interact with money is unconscious.

I first stumbled upon the term ‘money trauma’ back in 2021, and it was a total eye-opener. It quickly made me realize that all those uneasy feelings I had about money weren’t just in my head — they were real. 

Uneasy feelings like…

  • Feeling like there was never enough money
  • Worrying I’ll never be able to retire
  • Feeling guilty for spending money I had saved

Money trauma is all about the deep and complex emotions and thoughts we have about money, which come from our personal experiences, what we see in society, and the financial habits we inherit from our families.

But here’s the thing — money trauma is more than just stressing out about paying bills or keeping a job. The concept, instead, looks more closely at our relationships with money. 

And it’s more than just being stressed about money. Maybe we are struggling to pay bills, manage debt or find a stable job. But, money trauma is largely in part, what leads you to these situations in the first place. These feelings of stress and overwhelm can come and go. But, money trauma can persist and intensely affect our money behaviours and attitudes. 


Where Does Money Trauma Come From?

So, where does all this money trauma come from? It’s a mix of things, like the financial habits passed down from our parents, the impactful experiences we’ve had with money in our lives, the pressure from society to earn more, spend more, and the bigger picture of how our society and economy work. 

All of these factors shape how we feel about and handle our finances. It can be the lingering effect of poverty, wealth, or financial attitudes you’ve experienced from your parents or grandparents. It can be a lack of understanding and knowledge about managing finances, which makes you feel anxiety around money. It can also be driven by societal norms and values, like capitalism, colonialism, and consumerism. All of these things heavily influence our financial perspectives and can create a sense of inadequacy or unfulfilled desires.


How Does Money Trauma Impact Us?

And here’s how money trauma shows up in our lives: It can make us anxious, scared, guilty, or ashamed about money. Think about it. Maybe you feel super guilty every time you treat yourself because you grew up thinking debt was the worst thing ever. Or perhaps you feel shame because you were always told that your worth is measured by your bank balance. These emotions can lead us to some not-so-great financial habits, like splurging impulsively or being too scared to spend at all.

And it’s not just in our heads. Money trauma can also show up in our bodies, too. Like that knot in your stomach when you check your bank account or the headache you get when thinking about budgeting.


Why Understanding Money Trauma is Important

Now, why should we care about understanding money trauma? Because money touches pretty much every aspect of our lives. From the small daily purchases to the big life decisions, money is there. If we’re unaware of our hidden beliefs about money, making these decisions gets a whole lot tougher.

Understanding money trauma is key because it’s linked to much bigger issues than just our personal finances. It’s about societal and economic problems that need fixing. We can’t just tackle money trauma on our own; it’s a collective effort that involves personal changes, community support, and pushing for larger systemic reforms.

But, the first step in dealing with money trauma is acknowledging it’s there and seeing how it impacts us. Then, we can start forming healthier financial habits, like budgeting and setting realistic financial goals. 

It’s also about reaching out — whether it’s professional help or community support. This journey is a shared one, where personal insights pave the way for broader, societal healing. In confronting our money trauma, we’re not just seeking to balance our budgets, but also to find balance in our lives.


Here are some next steps if this is resonating with you:

1. Find a mental health professional who can guide these conversations
2. Reach out to a financial advisor for support

Money trauma is much more than what we’ve discussed here, so I’m excited to continue the conversation with more stories here at ATB. Stay tuned!

Meet Alyssa. 

Alyssa Davies is founder of the two-time award-winning Canadian Personal Finance Blog of the Year, Mixed Up Money. Her books, The 100 Day Financial Goal Journal and Financial First Aid are currently available for purchase.

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