Past financial challenges can stop you from improving your financial health now.
After 25 years as a psychotherapist, I’ve learned that we often unconsciously repeat the familiar until we become aware of it and choose something better.
We are shaped and molded by our families of origin and earlier life experiences in ways that can influence everything from our career choices and relationships to our mental health and financial well-being.
Your Family’s Financial Past Impacts Your Future
Although it may be painful to explore, reflect on how you may have been impacted by intergenerational financial trauma—which might include horrific experiences such as slavery, the Holocaust, genocide, or a severe economic crisis such as the Great Depression—painful financial losses, the chronic stress of poverty, or inadequate financial resources.
The first step toward healing and surviving any financial hardship is to honor your family’s past financial traumas, if present.
Unemployment, illness or disability, an accident, a lawsuit, a divorce or breakup, a failed business, foreclosure, or bankruptcy can all be examples of painful or even traumatic financial losses. Honor how these experiences may have influenced your family’s belief systems about money—and subsequently yours.
Take the Reins of Your Financial Life
The good news is you can take steps to heal and recover from the aftereffects of these negative financial experiences once you take the time to recognize their impact on you. By doing so, it’s possible to get out of financial hardship, regain financial stability, improve your financial health, and stop any self-sabotage behaviors.
Many of us have grown up with negative messages that money is bad, wanting more money is selfish, or we are not deserving or capable of having greater financial prosperity.
These messages can lead to financial self-sabotage. Cognitive behavioral therapy, one of the most empirically supported therapeutic approaches, asserts that our thoughts precede our emotions and behaviors.
We need to restructure our thoughts and beliefs to know we are each innately deserving of financial peace, financial freedom, and an abundant life.
Decrease Financial Self-Sabotage and Increase Mental Wealth
Having both mental wellness and financial health is what I refer to as “mental wealth.” Use the following five strategies to increase your mental wealth:
- Practice self-compassion. Honor your financial challenges or past traumas and how they may have impacted you emotionally, spiritually, and financially. Forgive yourself and others for any past financial mistakes to free yourself from the shame and unhappiness that often accompanies financial struggle. Unnecessary stress can negatively impact your finances. View the challenges of the past as opportunities for learning, growth, and fostering wisdom, strength, and resilience.
- Unplug from fear, uncertainty, and doubt. Set financial fears and anxieties to the side so you can forge ahead with clarity and persistence. Appreciate the power of self-fulfilling prophecy and restructure fear-based or catastrophic thinking to positive and affirming messages that you can and will succeed financially.
- Embrace your worth. Your self-worth ultimately impacts your bottom line. In my book, The Financial Mindset Fix, I show the correlation between net worth and self-worth. Remember, your financial struggles are how you are, not who you are. You are not your job title, bank account, or debt. You are your own beautiful and unique spirit with unique gifts and talents to offer the world. To connect with your deepest and highest self, use mindfulness practices such as meditation, deep breathing, and yoga.
- Shift from a scarcity mindset to abundant thinking. Financial trauma in our or our family’s past can make us focus on what we are lacking and cause worries about not having enough. A scarcity mindset breeds fear, which is never a good mode of operation. Instead, cultivate abundant thinking by not setting your own ceilings with self-limiting beliefs. Abundant thinking sees possibilities instead of roadblocks and encourages creativity, openness, collaboration, expansion, and growth.
- Access support. Due to the shame and stigma associated with financial struggle, many people suffer in silence. They are not alone. According to a May 2022 LendingClub survey, 64 percent of Americans are living paycheck to paycheck. If you are one of them, consider talking to a therapist, a financial advisor, a personal banker, or consumer credit counseling services to get help with budgeting, debt consolidation, and investment opportunities. Remember that Twelve-Step programs are free, anonymous, and available online.
Fix Your Financial Mindset
Past financial difficulties—even inter generational financial traumas—don’t need to hold you back when it comes to your financial future. Spend some time exploring your belief systems about money and then see what messages are negatively impacting you and make changes based on that. Emancipate yourself from financial self-sabotage and open yourself up to financial health and wellness.