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How Early Accidents Can Impact Your Relationship With Money

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Divorce. Job loss. Business failure. Eviction. Bankruptcy. Poverty. Few people go through life without experiencing some kind of financially traumatic situation—whether as a child, watching your parents go through it, or experiencing it themselves as an adult. Look no further than the pandemic to see countless recent cases of this. Such events can lead to disruption of money habits that can damage your finances, your relationships, or both. Early experience leaves a deep mark. barely scratched off – can leave a deep imprint and affect how you manage money in adult life, no matter how financially successful you become. “Every day is an emergency when you are poor. said Mars Nevada, art director at the ad agency, Deliann Barros, host of CNN’s Diversified podcast. “Being aware of such an existential threat as a child kind of confuses you, and I don’t know if I’m quite an adult already.” Children can internalize stress and anxiety when they see their parents struggling financially, says Ed Coambs, licensed psychotherapist, financial consultant and author of The Path to Healthy Love and Money: How Four Attachment Styles Affect Your Financial Well-Being. an emotional response to those stressors, Coambs said. One answer might be to drastically limit spending and be critical of your partner’s spending. Or vice versa, he said. “You can be too careless about money, believing that you can live for today, because tomorrow it may not be.” being sexually abused can still lead to money behavior that is detrimental to your financial health and relationships, Coambs noted. feel like the threat of rejection you felt as a child. And this, in turn, can lead you to become financially secretive. Financial trauma in adulthood can have a long tail. Sometimes, of course, financial trauma will strike into adulthood, and not into childhood. One particularly pernicious example is the financial blindness of a spouse. For example, the news that your spouse is having an affair can be traumatic. But this trauma is then exacerbated if you also find out that your cheating spouse spent a lot of money on another person. “It’s so traumatic and can overshadow sexual betrayal. I know,” said Debra Kaplan, licensed therapist and author of Clash of the Titans: Mastering the Powers of Sex, Money, and Power in Relationships. Money. “The impact becomes, ‘How can I trust? I can’t trust myself because I trusted this man. I don’t know what’s real.” So they end up not spending because they don’t trust,” Kaplan said. Finding healthier ways to deal with your money relationship situation. Financial therapy is a growing arena that typically combines the psychological experience of a licensed therapist with the skills of a certified financial planner in managing money and changing financial behavior. Sometimes you can get both in the same person. But if not, you might want to see a therapist first,” recommended Alex Melkumian, a licensed marriage and family therapist and founder of the Los Angeles-based Financial Psychology Center. find out why you behave the way you do. Then, when you process this experience, you can meet with the CFP to delve into the numbers,” Melkumyan said. In any case, always check the credentials and experience of a professional before working with them.

Divorce. Job loss. Business failure. Eviction. Bankruptcy. Poverty.

Few people go through life without experiencing some kind of financially traumatic situation—whether as a child, watching your parents go through it, or experiencing it themselves as an adult. Look no further than the pandemic to see countless recent cases.

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Such events can lead to disruption of money habits that can damage your finances, your relationships, or both.

Early experience leaves a deep mark

Growing up in a financially precarious home, especially if your family barely makes ends meet, can leave a deep mark on how you manage money as an adult, no matter how financially successful you become.

“Every day is an emergency when you are poor. You’re always one bad bill away from losing everything,” Mars Nevada, ad agency art director, Deliann Barros, told CNN’s “Diversified” podcast. “Having such an existential threat [and] realizing this as a child, you kind of spoil your mood in such a way that I don’t know if I’m quite an adult already.

Children can internalize stress and anxiety when they see their parents struggling financially, says Ed Coambs, licensed therapist, financial consultant and author of The Path to Healthy Love and Money: How Four Attachment Styles Affect Your Financial Well-Being.

How you handle money as an adult can be an emotional response to these stressors, Coambs says. One answer might be to drastically limit spending and be critical of your partner’s spending. Or vice versa, he said. “Perhaps you are too careless about money, believing that you can live for today, because tomorrow it may not be.”

Similarly, traumatic childhood experiences that may not be directly related to money, such as lack of love from parents or sexual abuse, can still lead to money-related behavior that is detrimental to your financial health and relationships, Coambs . marked.

For example, if you spend too much money to boost your self-esteem, it can lead not only to irreparable credit card debt, but also to painful criticism from your partner, which can feel like the threat of rejection you felt as a child. And this, in turn, can lead to financial secrecy.

Financial trauma in adulthood can have a long tail

Sometimes, of course, financial trauma comes in adulthood and not in childhood.

One particularly detrimental example is the financial blindness of a spouse. For example, the news that your spouse is having an affair can be traumatic. But this trauma is then exacerbated if you also find out that your unfaithful spouse has spent a lot of money on another person.

“It’s so traumatic and can overshadow sexual betrayal. It’s a one-two hit. This becomes very problematic because [you] I didn’t know,” said Debra Kaplan, licensed therapist and author of Clash of the Titans: Mastering the Powers of Sex, Money, and Power in Relationships.

For example, some people may react by becoming very reluctant to manage their money. “The impact becomes, ‘How can I trust? I can’t trust myself because I trusted this man. I don’t know what’s real.” So in the end they don’t spend because they don’t trust,” Kaplan said.

Finding Healthier Ways to Cope

If you suspect that you have unhealthy financial habits that are triggered by the emotions of a traumatic experience, there are ways to sort things out and have a healthier relationship with money.

Financial therapy is a growing field that typically combines the psychological expertise of a licensed therapist with the skills of a certified financial planner in managing money and changing financial behavior.

Sometimes you can get both in the same person. But if not, you might want to see a therapist first, recommended Alex Melkumian, a licensed marriage and family therapist and founder of the Los Angeles-based Financial Psychology Center.

“Meet someone with clinical experience to get into your money history and find out why you behave the way you do. Then, when you process this experience, you can meet with the CFP to delve into the numbers,” Melkumyan said.

In any case, always check the credentials and experience of a professional before working with them.

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