Do you struggle with financial avoidance?
If you put off, ignore, or won't take action, check this out 👇
Financial avoidance is when you avoid thinking about, reviewing, or taking action around your finances. It can look like not looking at bank statements, credit reports, etc. It can be further complicated by a scarcity mindset that manifests through behaviors like avoiding to pay one bill because you’re worried about no longer having the money to pay the next.
Sometimes we hoard money in our bank accounts because we worry that by spending or investing we will no longer have that money. This can create anxiety and fear that robs us of the present moment and opportunities that may be financially beneficial to us. This fear or anxiety turns into a slippery slope that looks like past due debt obligations or bills, collections notices, constant phone calls from bill collectors, or negative impacts to our credit— initiative a cycle that makes us want to slide deeper into avoidance.
Scarcity and Trauma
Early (or recent) experiences with poverty or lack can create an unquenchable thirst to gain as much as you can financially in order to distance yourself from those previous negative experiences with money. Some examples of this can look like:
evictions
power or gas cut offs
not being able to afford food for the week
witnessing your parents arguing over money
missed opportunities to go on school trips or purchase your graduating class year book in high school
Even issues with money at the forefront of your experience today can impact interpersonal relationships, job performance, and how you treat your body through a lack of rest or a bad diet. All of these feelings are valid and can contribute to avoidance or hoarding behaviors. The problem with this is that these behaviors can seem positive on the outside looking in and even be encouraged by your favorite financial guru.
“Set it and forget it”
Fundamentally, the automation involved with saving and investing or autopay can be considered a good thing. You set a predetermined date and amount and your job is simply to make sure the account has enough money to cover whatever transfer or bill pay you set up. What happens though when a hoarding compulsion influenced by trauma takes hold? Or you feel like you have to make sure your account balance doesn’t exceed or drop below a certain amount? On paper these are positive behaviors that would be applauded by the “finance bros” when in reality you are the equivalent of the obsessive compulsive cleaner, or the hoarder house down the street…just applied to your money.
Behavior is influenced by our unique psychology
In my book “Financially Irresponsible”, I tell a story of how I was so committed to the concept of “paying yourself first” that rather than pay certain bills on time, I would make sure that I didn’t break the discipline of making payments to myself. To some, that would indeed be considered financially irresponsible. To others it was viewed as genius. In doing my own self assessment around why I was so committed to making sure the payments to myself were made vs payments to others I recognize that my commitment to “never being poor again” drove this behavior under the acceptable guise of extreme discipline, when the reality was that it was the manifestation of trauma.
Think about how trauma may influence the behaviors you might have in your interactions with money whether they appear to be positive or negative. Do you avoid instances where you should be actively paying attention like credit card utilization, reading statements, or budgeting? Do you hoard as a way to insulate yourself from feeling too close to helplessness by keeping a high cash savings or filling your refrigerator with groceries that you never get to or tend to overeat? Are you reluctant to make purchases that are necessary or serve to benefit you because of the hefty price tag while justifying the use of something inefficient or obsolete?
Our interactions and relationships with money are so riddled with taboo that even when we think we’re doing money right— and appear to be doing so— we still make decisions out of a place that requires introspection and healing.
Here’s an exercise:
As we approach the holidays think about the last 5 major or semi major decisions you’ve made around money. Forget about the cost and focus on the motivation and the way it made you feel.
Were you anxious? Excited? Proud? Apprehensive? Disappointed?
Did you feel obligated or peer pressured into it?
How did those decisions impact adjacent decisions you could have or did make with your money? Did it derail some budget or savings goal? Did you have to rob Peter to pay Paul?
Given the gift of retrospect would you make those decisions again?
There is no right or wrong answer in this exercise. If you’re willing I’d love to hear your results.
Also, I hope you had a safe and happy Thanksgiving holiday with family and/or friends. Until next time, I’ll see you in the comments!
If you’ve enjoyed any of my posts please share and encourage others to subscribe. Consider subscribing to the paid version of the subscription as well as it helps to support me in this work and gives me an opportunity to add even more value to you. Lastly don’t forget to check out and rate the podcast wherever you listen to podcasts.
Thank you always,
Rahkim