When we can’t seem to learn from our mistakes, when we can’t seem to do what we need to do around money, when we know better but can’t help ourselves, when we try to change and can’t, when our emotional response is more intense than the situation warrants—then it’s likely due to unresolved trauma. Often—but not always—that trauma has its roots in the family experience.
It comes as no surprise that dysfunctional family systems often result in financial dysfunction. Given money’s powerful influence on every aspect of life, and its symbolic connections to emotions like comfort, security, and affection, it’s only natural that we are quite prone to misinterpreting money’s role in painful family systems. Money itself may not be the primary issue, but can very quickly become associated with family pain or problems. For children, the situation is even more complicated. With still-developing brains and coping skills, limited perspectives, and little ability to distinguish between actual threats and imagined ones, a young child can experience almost anything as traumatic: a visit to the dentist, a first haircut, a momentary separation from one’s parents, overhearing a heated argument between adults. Children are programmed to pick up the subtlest of clues with regard to threat or danger. As such, they are much more likely than adults to draw false conclusions or interpret benign situations as threatening. And, because children are so focused on taking in information and making sense out of their world, small events can take on what seems to be, in retrospect, outsized significance. It doesn’t matter whether or not the incident is something our adult selves would consider traumatic. If the emotional component is strong enough, if the message is powerful enough, a child will carry it forward into adulthood.
Additionally, children form their view of the world from observing and modeling adults. They learn what they’re supposed to fear and avoid, and what they should want and pursue. The more stressed a parent is about money, the more likely the child will develop money anxiety also. Or, a child who grows up in a wealthy but painful family system, where money is used as a means of control, may erroneously equate wealth with distress and heartache and spend the rest of his or her life repelling it. Another possibility is that child could grow up equating the amount of money one spends with how much love is felt. Remember Denise’s story from Chapter 1, about the Christmas checks kept in her father’s “fancy box”? She still struggles with separating love and money. Conversely, a child who grows up in a poor and painful family system may erroneously equate a lack of money with distress and heartache, resulting in a life spent pursuing enough wealth to bring happiness (which never materializes). Often that pursuit results in one of two extremes: workaholism or crime.
ELLEN: My mom was one of twelve and they were very poor. She dropped out of high school to help take care of her younger brother and sisters and had her first child at nineteen. There were many things that she couldn’t have and she adopted a “by any means necessary” attitude toward getting what she wanted. Getting something for nothing, having a “hustle”, was just a way of life. She was determined that we would have “everything she never had” and that meant that she would hustle, steal, borrow, do anything to get what she wanted. My mother never saved any money. She spent every dime she made. She was a maid for a wealthy family and she stole from them. Eventually she was caught, she lost her job and we eventually lost our home.
Early in life I remember feeling it was okay to take things and there was a thrill to getting away with it. Fortunately I learned very early that I didn’t want to live that legacy. As a mother and grandmother, I don’t want to look like I’m a taker so I give excessively. I have difficulty accepting anything, whether it’s money or gifts or friendship, offered by people who care for me and simply want to be kind.
Ellen grew up exhibiting a textbook case of one of the disorders we’ll talk about in the next section –rejection of money. Because of the behavior her mother modeled, and the trauma that resulted from her mother’s behavior she grew up to associate money with dishonesty and shame, so it’s hardly shocking that as an adult she wanted little to do with it. Today, Ellen is a highly trained professional who works primarily with the economically disadvantaged. She volunteers to take on projects and work for free, even when the federally funded projects she heads up are designed to pay her. She literally returns the money she does earn, because she wants to preempt any criticism from anyone that she is just “doing it for the money.” Of course, the criticism comes from only one place: her own mind. It would be one thing if she didn’t need the money, but at age 55, her financial situation is one of living from day-to-day, one paycheck at a time, with no savings or retirement plan.
One other source of confusion for children about money is the silence around it. In many families, even though issues involving money are ever-present, they are rarely talked about or expressed. This silence can be just as traumatic as experiences like Ellen’s – if not more so, because the issues are swept under the rug and never dealt with. When money is never talked about in front of the children, common and predictable responses include the child growing up financially dependent, living in financial denial, or developing an avoidance of money (three common disorders we’ll discuss shortly). While it’s important to protect children from worries they’re too young to handle, it’s much healthier to include them in financial decisions appropriate to their age.
All families have histories. Traumatic events are often a part of that history. And when families experience stress or trauma, they respond like individuals do; they create unspoken scripts to try to reconcile that trauma with an acceptable, or at least minimally painful, version of reality. These scripts are compiled into family anthologies and these stories—not to mention the unhealthy habits and behaviors that go along with them—get passed down like heirlooms. And they can exert a powerful and profound effect on families for generations.
Exploring and revealing your family’s financial history can be tremendously rewarding and enlightening. In doing so, you’ll realize that your beliefs are not your own—that they’ve been passed down to you, taught to you (deliberately or not) by your family members. That discovery can be very freeing, opening the door to learning and growth.
As father and son, we share a multi-generational financial legacy, one that went unexamined until we faced our own financial difficulties:
TED: One day in my mid-thirties, I collapsed into bed at 11:30 pm, and silently said to myself “At least they can’t call me lazy.” I had gotten out of bed that morning, as usual, at 3:30 am to feed and care for the six horses I was in charge of. By 5:00 am I was at the gym I owned, working out myself before opening it for customers at 6:00 am. By 7:15 I had traveled the twenty miles to my day job as a high school teacher and coach (for baseball, and men’s and women’s basketball). I would be done with practice by 6:30 or 7:00 pm, go close the gym by 10:00 pm, come home, tend to the horses once again, and get something to eat myself. I’d fall into bed about 11:30 pm, only to start again in four hours. “At least they can’t call me lazy”—where did that voice come from? It made absolutely no sense. No one had ever suggested such a thing. It wasn’t until years later that I began to understand the power of my family’s unspoken legacy.
My father’s family had been very wealthy landowners in Virginia prior to the Civil War. As the war began, they were forced to abandon their holdings and move away in the middle of the night. They settled in southern Ohio, and records show that at one time they were on the county dole. One of the sons enlisted in the Union army and the family used the bonus money for a down payment on some land. He was killed in the war and the death benefits were used to pay off the purchase, much to the everlasting shame of his mom and dad and the succeeding generations. They felt they’d profited from their son’s death.
My paternal grandfather didn’t work much. It could have been because of his bad vision; it could have been because he had injured his foot as a young man; it could have been because he didn’t choose to. The story is a bit unclear. The point is he didn’t do much, and everyone knew it.
My paternal grandmother lost her own mother, who died delivering her. Her father died just months later and she was raised in an orphanage. As an adult, she supported the family by working for other families: taking in laundry, doing mending, caring their children, whatever domestic duties she could barter for what her family needed. The family was exceedingly poor.
My father grew up hearing his mother complain about his father and how little he did to support the family. He started helping neighboring farmers when he was six years old, and he was held up and honored by his mother. She tried to shame her husband into working harder by unfavorably comparing him to his own son. It didn’t work for that purpose, but as a result, working became the centerpiece of her son’s; my father’s life.
When I was a child, my father always had several jobs at the same time. He went to work at his regular job, then come home and work for one of the neighboring farmers. When he finished that, late at night, he’d repair a piece of equipment for yet another neighbor or friend. As with his mother, he was held up by everyone around him for being such a hard worker and doing his best to provide for his family. Every event in our lives was organized around his work. Every hobby turned into some kind of business venture. In our family, being called lazy was one of the worst things that could be said about someone.
I grew up watching this and for as long as I can remember, I wanted to be known as a hard worker, too. I wanted people to admire me the same way they did my father and so I became a hard worker. I worked until the job was done, whether that meant I ate meals or not. Work came before anything else, always. Long after my days on the farm were over, long after my grandparents were dead and gone, I was still trying to live up to the standard that would guarantee that no one can ever call me lazy.
I was so focused on working hard that I left myself at the mercy of others in terms of what happened with my financial life. I never took control of my finances, because I believed that work was about proving my worth, not about making money. I trace that script back to one afternoon at my grandfather’s farm. This was my maternal grandfather and he did work hard. I often worked for him and one day, when I was about ten, I finally mustered up the courage to ask him if he’d be willing to pay me a dollar a day to help bale, pick up and store the hay we were putting up. He’d hired other boys my age, many of them friends of mine, and he was paying them a dollar an hour to do the same work I was doing. I knew he’d never pay me a dollar an hour, but I thought maybe a dollar a day would work. I’ll never forget his answer. His words became the guiding principle of my life for the next thirty years. He said, “I will decide whether or not I think you’re worth anything, and if I do, I’ll pay you. Furthermore, you should feel lucky that you have something to eat, a place to sleep and clothes to wear.”
End of conversation. I never got a cent. Every job I worked at for the next thirty-five years was one where other people decided what I was worth and what I’d be paid.
BRAD: This was a powerful story for me hear. Until recently, I had never heard it. As a child, I saw my father work. A lot. On weekends he’d take me into the office with him, where I would mill around while he worked. At home, I’d see his back for much of the day, as he worked on whatever he was doing. As we grew older, my sister and I would joke that he had “ADS Disease”—Always Doing Something. He and I never had a discussion about work, but I knew it was all-important. Whenever my sister and I argued, her knockout punch was to call me a “slug,” implying I was lazy. Even as a child, this comment sent me over the edge. The biggest sources of shame in my life involve the times that I have left a job unfinished or didn’t follow through on a promise. Hard work and integrity meant everything.
After high school, I spent the next ten years in school full-time. Part of me wanted to take some time off to travel but I couldn’t allow myself to do that. I finished my doctorate in four years. I paid off $90,000 in school loans in three years, while driving a $400 car and living in a home with no furniture. I was working seventy hours a week but I felt like I wasn’t doing enough, that I was being lazy.
At the same time, I saw how my father consistently worked for much less than he was worth, did not save and did not take even moderate risks with what little money he accidentally accumulated. After all, we were poor people, from generations of poor people. As I was growing up, I decided I’m not going to be poor; I’m not going to play it safe.
When I finally graduated, I became an investor. Without any training or real knowledge about finances or the stock market, I began buying and selling stocks. For me, the real risk was not taking any risks. However, in the two years following the tech bubble implosion in 2000, I lost over half the money I initially invested. This was a life-changing experience for me. I felt a great deal of pain and shame. I had no conscious understanding about my hidden generational beliefs and my personal relationship with money. In trying to “do it differently” than my parents, I made a big mistake and ended up just like them, with little money.
My family legacy and its impact on me became clear when I heard my father was working a hundred hours a week and felt lazy compared to his father. This awareness was freeing for me, in that I saw how ridiculous it was for him to feel that way. After all, I had seen him be a workaholic my whole life. To hear that he felt that he was lazy compared to his father helped me put my own automatic thoughts and guilt into perspective. It helped me come to terms with how inaccurate my thinking is in this area, and gave me permission to have a healthier work-life balance, stop taking excessive risks, and not succumb to guilt or shame.
