How Do We Not Pass On Our Financial Trauma To Our Children

Especially when we don't recognize we have financial trauma ourselves

Photo by Clem Onojeghuo on Unsplash

Recently I was interviewed by NerdWallet on how generational trauma impacts our finances and I shared the following:

“Generational trauma is arguably the biggest impact to our relationship with our finances. Often we learn by observation and reenact the things we saw our parents and grandparents do when it comes to the ways we think about, or even what we believe is attainable, with our finances.”

I think about how the words, actions, and exercises my parents and grandparents would expose me to still influence my independent financial decision making today. Whether or not certain experiences encouraged me to “go harder” in spite of circumstances or because of them. We didn’t have much by way of money, but where we lacked financially we made up for in self determination.

Nevertheless you seemingly can’t “will” yourself out of poverty alone. There are requisite activities, education, and even “lucky” breaks that you’ll encounter to help move the dial on what survival activities followed by wealth building looks like. The price you pay for that knowledge can often be tied to trauma.

“Some examples of financial trauma could include the financial overlap from divorce or child support orders, the inability to participate in scholastic or athletic programs due to a lack of money, or any experience that comes out of navigating poverty,”

Even variables outside of your traditional view on finances could be impacted by financial trauma. I think about my aversion to dating seriously for fear of becoming a “target”. I use aliases, pretend I'm renting an apartment in the house I own, or give vague descriptions of the work I do (or did). I don’t want to be viewed as some “unicorn” single man over 30 with no children. Worse still I think my biggest financial fear is falling for someone, having getting married, having children, and having all of my assets ripped away from me in custody battles and court hearings because I dared to believe in a “happily ever after”. And although I realize those are mostly irrational fears (I hope), I watched it happen with my parents, with my step parents, with friends, and the situation hits too close to home—and I own more alone than any of them did in relationships—. The unfortunate reality is that many of these fears and traumas were passed down generationally.

So as I ponder on a solution for overcoming these fears personally (lest I embrace the single man with a dog lifestyle forever) I’ll use myself as a case study on how to overcome this trauma so as not to pass it on to my not yet realized children.

1. Don’t have children. Seriously, this is something I’ve considered and wrestled with. It seems like the most fool proof way to avoid passing on your own financial traumas. Of course I want to have children of my own so in the case of those who want (or already have) children skip this solution.

2. Look yourself in the mirror. I mean this figuratively and literally. You have to come face to face with the traumas you already carry and potentially will pick up along the way. This takes a tremendous amount of self awareness and may require the assistance of a financial therapist or coach to uncover. I believe we can acquire financial trauma at any stage of wealth building so you can’t “earn” your way out of it. You can simply be present, navigate it, learn from it, and move on.

3. Talk about it. Once you determine what your financial traumas or triggers are you can have open and honest conversations about the “why” behind certain decisions you make or made. In a 2019 TED talk I delivered I shared that I aspired to be poor. This was an internalized trauma I acquired from watching my mom struggle to make ends meet with section 8 and food stamps. I’m sure she didn’t want for me to set this as the bar for myself financially, but we never had conversations to the contrary.

4. Ask your children what their brains “tell them”. When I was growing up my siblings and I would ask my grandfather questions all day about all sorts of things. His answer most frequently was “what does your brain tell you?” In hindsight I realize that this was a clever way to engage without engaging with the hopes that maybe we’d stop asking so many questions for our own amusement, but also as a way to gauge what we thought, what we knew, and what we thought we knew. If you ask your children why they think you do the things you do financially you can better course correct the thoughts they internalize and beliefs they have around money before they ever start managing money on their own.

5. We can’t. The harsh reality we have to come to terms with is that we can greatly decrease the amount of financial trauma we pass on to our children but we can’t avoid it in its entirety. We can give them everything we’ve never had or we can struggle and provide instruction to the contrary, but at the end of the day they’ll have to go out into the world with what we taught them, showed them, said to them, or exposed them to and they’re going to develop their own thoughts, beliefs, and life situations that force them to make decisions around money that may traumatize them.

No exercise for you this week but I have some exciting news! I started a podcast (finally) and I’ve titled it the same as this newsletter. That’s right there is now the overcoming financial trauma podcast and the first official episode is live today!

I hope you’ll have a listen as I interview my first guest Aja Evans a licensed mental health counselor on the topic of financial therapy and financial trauma! Please like, comment, rate, subscribe, and provide feedback!

Here’s the link.