3 Financial Traumas That Can Build Bad Money Habits

Financial trauma has been a buzz word in the FINSTA Streets. You know...

Financial Instagram.

I stumbled upon Finsta while l gearing up to read The Psychology of Money for 7th Gen book club.

There are great resources and an ample amount of knowledgeable finance content creators on the gram. each of them giving just enough information to make you curious about a range of topics from stocks, budgeting, paying down debt, real estate, early retirement.

But only a handful are talking directly to us. We know the difference between someone talking to us vs someone talking AT us.

Finsta creators talking to Black, brown, first generation folks are informed of what challenges our communities face upon entering a phase in their lives where they have enough money to come out of survival mode and invest in their future selves.

A few of my favs: @heyberna @rahkimsabree @firstgenliving

Now back to this book club read…

In The Psychology of Money author Morgan Housel emphasizes the importance of knowing your money story. This story is about how we grew up, how our parents talked about money, spent money, and the state of the economy in our childhood all play a role in our habits around money. Housel insists that "nobody is crazy” and everything that makes up your life somehow informs how you make and spend your money.

Bringing this perspective to the center, let’s name 3 financial traumas or experiences that could lead to some poor money habits.

1. We were fly on Easter, birthday parties, picture day, Dec 24th, whether mama really had it, or not.

This experience, although a fun financial trauma cause who doesn’t wanna be cute…can lead to overspending just to impress others.

2. Never having Mcdonalds money.

The inability to budget around dining out and letting the food in the fridge go bad. Remember - adulting means we got food at home even when we have the crab leg money.

3. Mom hoarding everything to send to home country & always always recycling old things around the house.

This can create overspending or constantly throwing out things and rebuying, just to avoid the clutter we used to see in our childhood homes.

Take these as simple examples. I’m thinking you can dig out a few of your own when exploring your experiences.

Whatever your money origin story is, I encourage you to take a look back at it & make sure the habits you formed around earning and spending your coins align with your future goals.