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Financial Trauma

Having experienced severe trauma recently, I’m not one to banter around the word lightly. PTSD is a real condition; I know, I’m living with it. In no way do I want to discount or minimize other traumas and their effects. 

That said, while talking with a friend this week about our financial journeys, it became clear that living through financial abuse or other financial devastation can cause financial trauma.

According to the American Psychological Association, “trauma is any disturbing experience that results in significant fear, helplessness, dissociation, confusion, or other disruptive feelings intense enough to have a long-lasting negative effect on a person’s attitudes, behavior, and other aspects of functioning.”

If you’ve been financially abused, you have likely been traumatized about money in some way.

It could be the very real fear of someone spending all your money without your knowledge, leaving you penniless, scared, and possibly even hungry or homeless. Or it could be fear of debt because someone wracked up so much debt you ended up having to file bankruptcy.  

Whatever the scenario, I encourage you to identify the events in your life that might have caused you financial trauma.

Financial Trauma

Once named, these traumas can be addressed.

How do you go about addressing financial trauma? How do you heal?

Like any trauma recovery, it’s an individual process that will take time.

There are a number of possible tools that could help, starting with therapy. Any trauma can be hard to overcome alone. Revisiting the experience will help you to understand that it wasn’t your fault. However, doing this work alone may not be a good idea. Depending on the severity of the damage caused by the trauma, it might be best to face it with the support of a professional.

If the trauma was in the distant past and you’ve come a long way since but feel the trauma still rears up from time to time, then perhaps you can work through the residual effects on your own. Journaling can be an excellent tool for working through your feelings.

Other healing methods might include talking it through with a trusted friend or support person. Sharing what you’ve been through can be cathartic. Saying it out loud can take some of the shame out of your experience.  

Getting the support and the validation that it wasn’t your fault can go a long way to helping you recover.

You might also consider financial counseling or working with a financial coach who can help you figure out how best to move forward on your financial recovery. They should be able to give you exercises and support to aid you in overcoming your fears.

If your trauma is still active, you will likely find yourself fearful or anxious around money decisions. 

Financial Trauma

Anxiety and fear will keep financial success away.

Yep, you heard me. You need to be past your trauma in order to move forward with your financial recovery. Or at least be aware of how it impacts you, so when you have a strong negative reaction to a situation like borrowing a large amount of money, you realize what’s going on and can address the trauma again.

I remember when my ex-husband and I were going through four foreclosures and a bankruptcy I thought I might never own real estate again.  I was financially traumatized by that experience and just couldn’t imagine ever wanting to take that risk again. It’s that “once burned, twice shy” reaction.

Through hard work, time, and learning to take financial risks again, I can happily report that I just bought my second house. I tell you this to encourage you to believe. Believe in your own resiliency. Believe in your own ability to overcome financial trauma and be financially successful again.

Financial trauma does not define you and it need not hold you back.

It can take time to overcome any kind of trauma, so be gentle on yourself if you find you are reacting negatively to a financial situation that you feel “shouldn’t” upset you. It’s okay. Take your time and dig in to understand why you’re reacting the way you are. Revisit the financial trauma and work through it as often as you need to in order to overcome the reaction and be able to move forward.

Financial recovery, like any recovery, takes time and is a process.

Start by acknowledging the financial trauma you’ve experienced. Then find a method of working through it that works for you. As you recover, you will find yourself less and less affected by the trauma and able to handle the situations that might have triggered you in the past. Then you can move on to financial success and confidence in handling whatever financial challenges you’re faced with.

Sherry Lutz Herrington is the owner of Sherrington Financial Fitness, a business consulting and accounting firm specializing in strategic business planning and solid financial accounting for businesses. She is also the author of Strong Women Thriving (, a blog which focuses on empowering women to be financially savvy, particularly after experiencing financial abuse. Sherry is currently writing a new book that both shares her personal story and addresses financial abuse. She can be reached at Join our FB group

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