Your Mental Wealth

Our financial flashpoints, or intense emotional experiences relating to money, shape the money scripts – or patterns of thinking and acting – that we write for ourselves. And while each of us has flashpoints or experiences from childhood that shape our relationship with money, some of these experiences are more painful and traumatic than others. In our work helping people overcome the lasting effects of financial trauma, we’ve found that the more traumatic the flashpoint, the more serious the lasting effects. But the good news is that our responses to emotional trauma often follow specific, predictable patterns, and with careful thought and introspection, we can learn to identify, detect and overcome those patterns. Consider these examples:

leslie: When I was a girl we would get paid for doing chores around the house, and we were told that half had to go into a savings account at the bank and we could spend the other half on candy or whatever we wanted. I’d save half in my piggy bank and then, once a month or so, I’d go to the real bank to make a deposit. I liked looking at the numbers on the passbook, thinking about my little pile of money getting bigger and bigger.

One day, when I was twelve or thirteen, I went to the bank to make a deposit and check my balance. The teller said there was nothing there, that my dad had withdrawn it all. When I confronted him about it, he just laughed and said, “That’s my money.” I was just so shocked that he would do that.

I stopped putting money into the savings account. After that, whenever I got any money, I spent it all. I’d spend it when I had it, before someone else could take it away.

 This was a profound financial flashpoint for Leslie. She felt a deep sense of betrayal, and her entire “reality” about how money was supposed to work was changed in an instant. As a child, her behavioral adaptations were limited. After all, she couldn’t open up a bank account without an adult co-signer, and she obviously couldn’t trust her parents with her money. So in an effort to never feel betrayed again, Leslie arrived at what seemed to her like a logical conclusion—spend money before it can be taken from you. After a while, long after Leslie’s rational brain had put the incident with her father behind her, this habit became so ingrained, it took on a life of its own. As a result, she became an over-spender (one of the disorders we’ll talk about in the next section). She lived paycheck to paycheck, accumulating more and more debt, never putting aside any savings.

 Carla: All I remember as a child is chaos, around money and in every area of my life. One of my first memories, at maybe age three or four, was when my mother was in jail for writing bad checks. For the next five years Mom was constantly being arrested, in and out of jail. We were always running from the law, hiding from creditors, moving from house to house, one step ahead of the sheriff. 

When I was nine, Mom finally had a kind of breakdown. She was weeping and crying, just inconsolable. Finally I said “Mom, call Dad.” Amazingly, she did. The very next day, we moved into a house that was better than anyplace we’d ever lived. We were just six houses down from Dad, and I thought it was great to be so close to him. My parents had divorced when I was sixteen months old so I never knew him that well. But now I saw him a lot and we had a nice place to live and food to eat, and things were going better than they ever had. 

Early one Saturday morning, I was still asleep when my mom and my uncle roared into my room. They said, “Grab what you want to take with you. We’re leaving and we’re not coming back.” So I grabbed my goldfish and ran out the back door. They plopped me down in the back seat of a little sports car with a little U-Haul trailer behind it. We took off and drove straight through all day and all night, only stopping for gas. We drove fifteen hundred miles to our new home, and it all started up again.

That did it for me. Something seemed to break inside. I gave up. I learned that I couldn’t trust anything or anyone, that nothing will ever work out and I have no power to change anything. From that point on, whenever things got stressful, I just pretended like I didn’t notice. I just tried to look good, just get by. That was all I could do.

 When I got out on my own, I did pretty well financially. I was taking care of myself, acting responsibly, paying my bills, saving money. All that went away when I married my husband.  I married someone who behaved, in many ways, just like my mother. All my old scripts came rushing back; scripts like “I have to help him and I’ll do that by putting everything I have into our relationship, and never questioning him.”

So for the next twenty years, through lost job after lost job, after many, many moves all over the United States, after promises from him that he’d change his behavior, and lots more chaos, I just gave up. I believed I had no power over my life. I believed that I didn’t deserve to get my needs met. I just shut down, blindly trusted, and just gave up. 

Strange as it may seem, these beliefs kept me sane during that difficult time. As long as I didn’t pay attention to what was going on, I didn’t feel a lot of anxiety.  I didn’t feel a lot of anything, and that seemed okay.

Carla’s story demonstrates how unfinished business from childhood can affect our choices as adults. We’re drawn to people, places and things that feel familiar, often in an unconscious effort to replay the past and “fix it” this time. This rarely succeeds. Notice too how her scripts served her well, in the short term, in a specific situation. They allowed her to survive until she gathered the strength to confront her husband and begin putting together a plan for her own future, despite the fact that her husband was not able or willing to join her in that process. Yet these same scripts were what led her into the painful situation she had to escape, and they would have led her into other self-destructive situations if she hadn’t taken steps to heal.

When people talk about trauma, they often think that only unusual events qualify: armed combat, a mugging, sexual assault. But the fact is that any event, however mundane it might seem, that causes emotional distress and pain can be traumatic. There are differences in degree, not kind. Financial flashpoints don’t have to be shocking rare events, like finding out that your father has robbed you of your savings, or seeing your mother being hauled off the jail; many common, everyday experiences— a hurtful comment from a parent, an embarrassing moment in front of peers—can leave equally lasting imprints, and have equally negative effects on our financial and mental health. The effects of these traumas may not be as immediately noticeable or easy to pinpoint, but they are just as real.

This chapter looks at the fundamental role traumatic experience play in shaping disordered money behaviors. First we’ll explain how emotionally charged or traumatic events associated with money can actually change the physical structure of the brain in such a way as to make future financial reactions primal and automatic, bypassing the logical brain that would otherwise allow us to make informed decisions. Then, we’ll look at the various types of early trauma and the impact such events have on our adult patterns of thinking and acting.