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Understanding your attachment style to money

To understand how trauma impacts your money habits, Michael Reynolds, a financial advisor and therapist and founder of Elevation Financial, points to the different attachment styles people develop when they’re young.

Whether you're anxious, avoidant, disorganized or secure, your attachment style will often dictate how you relate to money, says Reynolds.

While a secure attachment is the ideal, in reality, not everyone is lucky enough to have always felt supported, protected and cared for in early childhood.

Reynolds goes on to explain these attachment styles play out in our relationship with money through patterns, or what are known as “money scripts,” which are essentially our unconscious beliefs about money.

“Avoidance, money worship, money status and money vigilance: These are all money scripts that can manifest as a result of childhood trauma,” added Reynolds.

But it’s not just childhood trauma that can create these money scripts — your experiences as an adult can also induce trauma.

And the consequences can lead to serious psychological distress. According to a December 2022 study by Canada's Financial Wellness Lab at Western, 60% of North American employees (U.S. and Canada) were more stressed about finances in 2022 than they were in 2021.

Understanding the symptoms of that stress is key to eliminating damaging money scripts.

What is the behavior indicative of money scripts?

Certain spending patterns can indicate underlying issues, like compulsive spending, the inability to set boundaries when underearning or undercharging for those who have a business or working as a freelancer, excessive risk aversion, financial codependency or the complete opposite of financial dependency.

But both Reynolds and Chapman say the most common presentation of money trauma is avoidance.

“Money avoidance is kind of a pattern where people will avoid looking at bills and looking at their bank balance and avoiding conversations about money,” Reynolds explains.

“Just sort of any interaction with money causes them so much stress that it causes paralysis, they just sort of shut down and aren't able to really effectively deal with money decisions.”

Patterns can overlap too. Where there’s overspending, avoidant tendencies typically follow. And anyone who demonstrates financial codependency is likely also dealing with avoidance, says Chapman.

However, those with excessive risk aversion can experience the opposite of avoidance.

“They are constantly looking at their financial statements, they're constantly checking their bank account to a point where it's compulsive behavior,” says Chapman.

Identify the narrative

Tackling this issue head-on can be challenging because it means first acknowledging its roots in trauma, which can be painful.

“Phase one is always identifying the narrative that's arising around the avoidance or around the behavior,” says Chapman. “And this is really important that we self identify the behavior as a problem. And then from there, we ask, ‘What is the narrative associated with it?’”

If someone connects looking at their finances with the assumption that they’re going to see something bad, then they’re going to associate that action with feeling ashamed. But just acknowledging that opens up the conversation to healing.

“Then we start to ask ourselves, whose shame is this? Where is this coming from? We map it to external sources of trauma. So we might say, this is generational trauma, this is societal trauma,” says Chapman.

Once people realize that they aren’t their trauma or that experience, they’ll enter the second stage. That’s when you begin to explore your nervous system, where our earlier response to trauma is stored, and how you respond to triggers.

For example, people who are in an avoidance track tend to freeze as a trauma response, says Chapman. Once you’ve identified your trauma response, you’ll need to learn how to soothe and remedy your nervous system.

So how do you do that? Chapman says simple actions like calling a friend, having a therapy appointment, or going outside in nature and moving our bodies can be helpful.

“What we do is we explore all the different resources that we can bring in to support ourselves.”

There are ways to make it easier for yourself

Dealing with the root issues of trauma can be overwhelming and exhausting. But a few simple tricks can make this process easier. Reynolds says automating transactions can really help with avoidance by cutting out the need for decision-making.

“So for example, setting up monthly recurring contributions to your retirement accounts, setting up monthly contributions into your emergency fund, setting up monthly contributions into your kids' 529 accounts, debt payments,” he says.

As a result of trauma, some people may tie their worth to how much money they have and addressing that is another important step forward.

“If people subconsciously tie their worth to the kind of car they drive or the house they live in, they can try exercises to unearth their true values,” says Reynolds.

These exercises can help them uncover core beliefs like “value” is actually found in being with family or giving back to their community.

“Tangibly tying those spending and cash flow patterns to real value can bring them back home to what's really important,” says Reynolds, adding that budgeting the “good old- fashioned way can also help uncover your values.

But if you find you’re struggling with your relationship with money, Reynolds adds that “getting help is extremely beneficial” — especially in a world where there are many “opinions and options.”

He adds there are even organizations like Advisers Give Back and the Foundation for Financial Planning that offer free support for those struggling with money issues.

“There's nothing wrong with reaching out to a therapist, a financial advisor or someone trained in both areas,” he said. “A third-party objective opinion can go a long way to help people get unstuck.”

Don’t Miss

  • How can trauma affect how you manage your money? How does your financial health affect your mental health, and vice versa? We talked to two experts to delve into the psychological reasons behind common money habits or “scripts,” like overspending or undercharging. Join our hosts weekly on the Half Banked Podcast as they ask the big money questions that matter to young Canadians. Episode 4 is now available on all major podcast platforms including Spotify and Apple Podcasts.

Is there a greater interest in financial therapy?

At the end of the day, financial therapy isn’t only for people who are seeking change for themselves, but it’s also for people who are helping others.

Chapman’s client list includes accountants, activists and educators, who are all helping others to fight poverty.

Chapman says the age group of 25 to 38 is the “common age range.” However, she is also seeing more of a “significant size of older folks.”

The latter group seeks her services due to their inability to retire.

“I’m nearing the age of retirement, and I'm not in a financial position to retire, and I'm in such extreme financial distress, and I really want to understand why,” Chapman echoed their sentiment.

Reynolds also says there was an “increase in people looking for help after the beginning of the pandemic.”

“I think there were a lot of unusual things happening with money, including the various [U.S] stimulus programs as well as lots of shifting in the way that we work which led to some deeper exploration by some in their careers and businesses.”

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