How to Overcome Past Financial Trauma and Increase Your Wealth

Updated: November 4, 2024

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After 25 years as a psychotherapist, I’ve realized we all unconsciously repeat the familiar until we become aware and choose something better. We are shaped and molded by our families-of-origin and earlier life experiences, which impact everything from our career choices and relationships to our mental health and financial wellbeing.

When we go through financial hardships, we can discover so much about ourselves. The first step toward healing and surviving financial hardship is to honor your past financial traumas. By doing so, you can regain financial stability and improve your financial health.

Honoring Your Financial Traumas

Honoring Your Financial Traumas

Traumas are events that our minds and bodies can’t process like usual life experiences. The result is emotional, cognitive and physical symptoms that can make it difficult to function.

Although it may be painful to explore, it’s important to reflect on how you may have been impacted by intergenerational financial trauma, like slavery, genocide or major economic crises, such as the Great Depression. It's also crucial to understand the impact of the chronic stress of poverty, inadequate financial resources and traumatic financial losses.

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Some of the most common traumatic financial losses are:

Honor how these experiences have impacted your ancestors’, grandparents’ or parents’ belief systems about money — and subsequently, yours.

The pandemic caused a global financial trauma with skyrocketing unemployment and the closure of countless businesses. Even before the pandemic, a study showed 23% of adults and 36% of millennials experienced financial stress at levels that qualify as a diagnosis of post-traumatic stress disorder.

It is critical to recognize if financial trauma has impacted you, and to take steps to heal and recover, mentally and financially.

An illustration of a woman holding up a large coin.

Stopping Financial Self-Sabotage

Consider how cultural or religious teachings, gender messages, or traumatic experiences such as racism, sexism, marginalization and discrimination may have impacted your psychology of money — also known as the thoughts, belief systems and feelings you have about money.

Many of us have grown up with negative messages that money is bad, wanting more money is selfish, or we are not deserving or capable of having greater financial prosperity. These messages can lead to financial self-sabotage. Proven strategies from psychology can help you end self-sabotage and improve your financial health.

Cognitive behavioral therapy (CBT), one of the most empirically supported therapeutic approaches, asserts that our thoughts precede our emotions and behaviors. We need to restructure our thoughts and beliefs to know we are each innately deserving of financial peace, financial freedom and an abundant life. When we have more wealth, we can also be of greater service to others through charity and philanthropy.

An illustration of a man carrying a large back of money over his shoulder and walking home.

5 Strategies to Increase Your Mental Wealth

Having both mental wellness and financial health is what I call “mental wealth.” The following are financial healing strategies to recover from financial trauma and increase your mental wealth:

  1. 1

    Practice self-compassion

    Honor your financial traumas and how they may have impacted you emotionally, spiritually and financially. Stop self-blame and harsh self-judgment. Forgive yourself and others for any past financial mistakes to free yourself from the shame and unhappiness that often accompanies financial struggle. View past challenges as opportunities for learning, growth, and fostering wisdom, strength and resilience.

  2. 2

    Unplug from fear, uncertainty and doubt

    Practice healthy detachment strategies such as compartmentalization to set financial fears and anxieties to the side so you can forge ahead with clarity and persistence. Appreciate the power of self-fulfilling prophecy and restructure fear-based or catastrophic thinking to positive and affirming messages that you can and will succeed financially.

  3. 3

    Embrace your worth

    In her book, Women & Money: Owning the Power to Control Your Destiny, Suze Orman said, “Lasting net worth comes only when you have a healthy and strong sense of self-worth.” Remember, your financial struggles are HOW you are, not WHO you are. You are not your job title, bank account or debt. You are your own beautiful and unique spirit with unique gifts and talents to offer the world. Connect with your deepest and highest self through mindfulness practices such as meditation, deep breathing and yoga to separate from ego (your mind’s understanding of who you are). By doing so, you will discover you deserve financial peace and prosperity. This allows you to put yourself out in the world with more confidence, courage and assertiveness.

  4. 4

    Shift from a scarcity mindset to abundant thinking

    Financial trauma can make us focus on what we lack and worry about not having enough, which can make us feel we need to compete for resources, such as jobs or opportunities. A scarcity mindset breeds fear, which is never a good mode of operation. Instead, cultivate abundant thinking by confronting self-limiting beliefs like “I could never do that” or “This is the best it’s ever going to get.” An abundance mindset allows us to see there are enough resources and opportunities for all of us. It sees possibilities instead of roadblocks and encourages creativity, openness, collaboration, expansion and growth.

  5. 5

    Access support

    Due to the shame and stigma associated with mental health issues such as trauma and financial struggle, many people suffer in silence. Know that you are not alone, many of us have money problems, and help is available. According to a 2018 survey from the Federal Reserve, four in 10 Americans say they’d have difficulty covering a $400 unexpected expense. Talking about your financial challenges with friends, family, or professional therapists can lead to better problem-solving and more assistance, resources and opportunities.

    “I am a financial planner, not a psychiatrist, but I do know that your net worth will rise to meet your self-worth only if your self-worth rises to accept what can be yours,” said Orman.

Additional Resources

There are many resources available that can help you work through negative financial experiences and increase your wealth.

About Joyce Marter


Joyce Marter headshot

Joyce Marter is a licensed psychotherapist with 25 years of experience and entrepreneur who founded and successfully sold Urban Balance, a national outpatient mental health company in the U.S. Marter is an adjunct professor at Northwestern University, international speaker, blogger for Psychology Today and mental health thought-leader specializing in the psychology of money.

Joyce Marter is routinely consulted as a mental health expert in the media, featured in such outlets as U.S. News & World Report, The Wall Street Journal, CNN and MTV. Her book, The Financial Mindset Fix: A Mental Fitness Program for an Abundant Life, was published by Sounds True in July of 2021 and has been featured in Business Insider, MoneyGeek, US Weekly, Thrive Global, Forbes and more.


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