by Ainsley Lawrence,
Contributing Author, Conscious Reminder
Image Source: Pexels.com
If you experience an intense emotional, physical, and behavioral response to financial stressors, you may be living with financial trauma. Something may have happened to you, like poverty or food insecurity, that helped you form an unhealthy relationship with money.
Fear-led financial decision-making might keep you from achieving financial security. It’s hard to open your mind up to the possibility of financial freedom when you do this.
However, if you work on healing financial trauma, you can change your attitude toward money and regain financial stability.
Use these tips to navigate financial healing and effective money management, and ultimately achieve the financial future you’ve been dreaming of.
Start Talking About Your Financial Trauma
The first step in overcoming your financial trauma is recognizing it and starting a conversation about it. Identify the signs of financial trauma showing up in your life and where you think they stem from. Discuss how financial trauma is affecting you mentally and physically.
Who you choose to talk about your financial trauma with is up to you. Make sure it’s someone you trust. Also, ensure it’s someone who can give you sound advice on how to move forward with healing your financial trauma and transforming your financial habits.
For example, it could be a close friend or family member who went through something similar and did the work to feel better emotionally and reestablish themself financially. Or, it could be a therapist who specializes in helping patients with financial trauma.
Whoever you decide to open up to about your financial trauma, be sure they’re someone you can rely on to guide you.
Get a Complete Picture of Your Financial Situation
Some ill feelings may come up, but it’s vital you get a complete picture of your financial situation.
Start with how many income sources you have and how much you bring in each month. State your pay dates and your gross and net income. Write down your monthly, quarterly, and yearly expenses.
Then, tackle your debt. Write down every person or company you owe money to. Write down the total amount you owe, what your repayment plan is if you have one, and the monthly amount you allocate to the debt. Also, total your debt so that you know exactly where you’re starting from.
If you have yet to start repaying all or some of your debts, the next step is calling the places you owe money to and establishing a repayment plan. You’ll be surprised how relieved you are once you actually have a plan to pay down your debts.
It’s easier to put a plan in place to improve it once you get a complete picture of your financial situation.
Set Financial Goals
Financial trauma can stop you from ever striving for a positive financial future. You become so used to associating finances with stress and negative outcomes that you just accept it as how it will always be for you.
Setting goals is a step in the direction of breaking free from financial trauma. You’re no longer letting it stop you from wanting more.
Avoid ambiguity with your goals. You don’t want to spiral into negativity and frustration because you’re trying to achieve financial goals that aren’t specific and tied to who you are. Instead, use SMART goals to ensure you create clear future financial goals that you can achieve.
SMART is an acronym for:
- Specific: what you want and need to accomplish, when you want to achieve it, where you’ll do the work, and who’s involved in the process
- Measurable: metrics for measuring progress and success
- Achievable: whether you can accomplish the goal with your time and resources
- Relevant: whether the goal is relevant to your overall objective
- Timebound: Deadline to achieve your goal and important milestones
Your financial goals should adhere to the SMART goal framework so that they’re structured, feasible, and worthwhile.
An example of a financial SMART goal is: I want to pay off my largest credit card debt in one year. To make this happen, I will pay $300 a month at a minimum and contribute any extra funds to this debt to potentially pay it off faster.
Start with one financial goal so that you don’t put a whole bunch of pressure on yourself.
Establish a Budget That Fits You and Your Financial Goals
You can make all the plans you want with your finances, but true improvement and healing come with action. You need to make healthier financial habits a part of how you live, and that starts with a budget.
Research different types of budgets for personal finances, like:
- The 50/30/20 budget: 50% of your income goes to needs, 30% to wants, and 20% to savings and debt retirement
- The Zero-based budget: Aim to have $0 left after allocating all your money to specific places
- Reverse budgeting: Pay your savings and investments first, then divvy up the rest
You may have to try a few budgets before you land on the one you can stick with.
In addition to establishing and sticking with a budget, always look for creative ways to save.
For example, you can offset high gas prices by being diligent about your tire pressure. Underinflated tires can result in decreased fuel efficiency.
So, if you keep them inflated properly, you can keep some money in your pocket and ensure you’re getting the maximum fuel efficiency. Driving at slower speeds and smooth acceleration and braking techniques can save you gas money too.
Other creative ways to save money and be more mindful with it include:
- Meal prepping
- Do home workouts instead of the gym
- Delete shopping apps and retailer emails
- Purchase your essentials online through a cash-back site
- Host at-home gatherings with friends and family instead of going out
Healing from financial trauma requires a lot of intention and patience. But you can do it and build a positive relationship with money by implementing the above tips and showing yourself grace throughout the journey.
About the Author: Ainsley Lawrence is a freelance writer with an interest in balanced living through education and technology. She loves travelling to beautiful places and is frequently lost in a good book.
Now, you can follow Conscious Reminder on Facebook & Instagram!
∼If you like our article, give Conscious Reminder a thumbs up, and help us spread LOVE & LIGHT!∼
