5 Tips From Financial Therapists to Start Working Through Financial Trauma

• Financial trauma isn’t always dramatic – it can be as simple as hearing your parents arguing over money when you were a kid.
• Financial therapists say that overcoming such trauma starts with identifying your problematic financial beliefs.
• Then you can focus on developing good financial habits, learning about money, and whether you need professional help.
• Read more stories from Personal Finance Insider.

“When people hear the word ‘trauma’ they think it must be something extreme,” financial planner and financial therapist Natasha Knox told Insider. “Like bankruptcy, divorce or homelessness.”

While financial trauma can result from any of these situations, this is by no means an exhaustive list. “It could also be less traumatic things, but no less impactful,” says Knox, who sits on the board of directors of the Financial Therapy Association. It could be something as common as hearing parents arguing over money as a child.

As certified financial psychotherapist Judith Gruber defines it, financial trauma is “a time in someone’s life when things have changed and beliefs and images about their relationship with money take a negative turn.” While there is no one-size-fits-all approach to financial healing, there are general practices that anyone at risk of experiencing some form of financial trauma can consider implementing in their life.

Below, Knox and Gruber share five tips.

1. Remember that net worth does not equate to self-esteem

Big or small, your net worth does not determine your personal worth. “It’s really important for a person to know that,” says Gruber, who has worked with people from all walks of life and all income levels for the past 35 years.

Not only does this thought reaffirm that a person’s worth comes from outside of the money they own or don’t have, but it also allows them to examine their financial situation objectively and without self-judgment. . “Then let’s see how to be part of the solution,” says Gruber.

While it might be easier said than done, practicing gratitude or using positive affirmations can be a way to incorporate this belief into your daily life. As Gruber explains, “Gratitude is huge, it keeps you from going into the negative … and changing the mindset is really important.”

2. Identify your problematic financial beliefs

Understanding what your financial beliefs are can be a process in itself, but if you can identify one or more, it can be a powerful step. “So you can start asking: is this the truth? Knox said.

Most of us have an ideology when it comes to money: that it is scarce, that it represents power, or that it is a source of validation or security, to name a few – a few. These internalized understandings of money can then influence how we spend, save, or manage our money.

“Usually people will have reasons, but it might be difficult for them to explain why it’s true because it usually isn’t,” Knox told Insider. When you can dismantle some of these misconceptions, it can help you change your financial behaviors. “Ask, ‘How would things be different if this belief did not exist? ”Says Knox.

3. Implement small changes for big impacts

Building strong financial habits, even with small amounts of money, can also be a very valuable tool in healing financial trauma. “Very small steps are better than no steps,” says Gruber.

Opening a savings account and setting aside even a few dollars a month can make a big difference in how you view not only your money, but yourself too. “Take action and recognize that you are doing something proactive,” she says.

Establishing these regular habits can build momentum, self-confidence, and motivation, according to Gruber. “Even though it’s $ 5 a week, it’s something they do for themselves,” she says.

4. Make education part of your routine

While it can be helpful to have a professional walk you through some of these topics, you can also learn a lot on your own using free or inexpensive resources. Knox recommends Brad and Ted Klontz’s “Mind Over Money”. “If they just want to dip their toes or try to work on things themselves, that’s a great place to start,” she says.

If you need more financial support, Gruber recommends Debtors Anonymous, finding a “money buddy” to help hold you accountable, or taking a personal finance course, either online or in a local college.

5. Determine if you need some type of support.

Financial therapy is an “application of evidence-based techniques alongside financial education to help people think, feel, behave, and communicate better around money,” Knox explains.

If you are looking to work with a financial therapist, it might be helpful to determine if you need more financial or therapeutic support. Knox says most financial therapists tend to focus more on one discipline or the other. “A lot of times customers have an idea of ​​how they look,” she explained.

The Financial Therapy Association’s directory even categorizes practitioners according to their primary professional orientation, whether financial or mental. “When there is a mismatch between the client’s needs and expectations and the practitioner’s approach and expertise, this is when it is crucial for the practitioner to know when to refer. one that’s better aligned, ”Knox explained.

No matter what you are faced with, financial therapists help clients unravel false beliefs and learned patterns about money that impact your mental and financial health. As Knox says, “We have thoughts that maybe don’t serve us very well, and we might want to respond to them… but we’re not broken.”