Divorce. Bankruptcy. Four simple steps to get over your money traumas — and improve your bottom line

It could be a divorce, bankruptcy, being a past victim of fraud or identity theft, a difficult financial upbringing or a previous relationship where money was at the root of all arguments.

Unresolved money trauma can trigger anxiety, depression, a scarcity mindset and unhealthy levels of risk taking.

It can also lead to overachieving, people pleasing and chasing the greener grass.

Having coached and supported hundreds of people moving through financial trauma over my career, I can share four specific healing techniques that seem to help everyone, no matter the severity of the trauma.

Acknowledging there’s an issue is the first step

Until you acknowledge a problem exists, no level coaching or therapy will work. Here are some clues you may be living with money trauma:

• You’re unable to enjoy activities that should be fun.

• You feel ‘jumpy’ when the phone rings, fearing creditors.

• You can’t sleep with your mind racing and worrying about money.

• You fear you’ll be fired, or run out of work.

The key outcome in this step is simply to be able to say, “It looks like I might be struggling with the relationship I have with money.”

Dealing with your financial triggers

If you know some of the triggers that bring on financial stress already, it can be helpful to jot them down.

An empty fridge could be your trigger, and it might be related to food scarcity growing up, as an example.

A friend could be your trigger, and it might be related to your personal disappointment with your career, while they gloat about their successes. Reviewing job postings, but never actually applying, could be your trigger, and it might be related to not feeling like you deserve that next level position.

If you don’t know your triggers yet, it’s OK.

When feelings of financial stress arise, pause for a minute, acknowledge they are present, and observe what you think may have brought them about at that moment. Write it down.

The key outcome here is being able to spot your triggers, which puts you in a stronger position to care for yourself by avoiding financially harmful behaviours.

Boundaries are a crucial part of stepping into financial wellness

Boundaries keep all relationships healthy, including financial ones.

Financial boundaries start with ourselves, and then spill over into our social connections. Two universal boundary setting tools everyone can benefit from are a balanced budget where money coming in matches money going out, and a net worth tracker where the value of assets rise and liabilities fall every month to grow your personal bottom line.

At their core, these two tools, which you should use with your partner give you an incentive to try and keep more of the money you’ve earned.

Certain other financial issues call for unique boundaries. If overspending is an issue, remove credit cards from your wallet and unsubscribe from email lists that encourage online shopping.

If avoidance is an issue, use as much automation as possible for things like saving, investing, debt payments and budget tracking.

If hoarding is an issue, post one or two items from your house online for sale each week until your home returns to order.

If procrastination is an issue, preschedule money dates with yourself weekly.

Social pressures can exacerbate financial stress, especially if there is one-upping, comparisons or shaming involved (hopefully you’ll unfriend these folks). If there’s an opportunity to spend less money, but still connect socially, make it happen.

The key outcome of boundaries is being able to say ‘yes’ to things that contribute to your financial wellness and ‘no’ to whatever doesn’t. That’s what financial empowerment is all about.

Talk to someone

It could be a friend you trust, a money coach or a financial therapist.

Talking openly helps you to move through your financial trauma.

Financial therapy is new practice and it’s a blend of psychology and financial planning.

And the goals are simple: reduced shame, stress and a better financial literacy.

This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.