Impact – Wealth Management


Money Trauma – A Personal Story

We typically think of money and finances as black and white, facts and figures… math. But the truth is there is no topic more “full of emotion” than money.  Interacting with money is inevitable… even sitting on the couch has economic consequences. But HOW we interact with money is the result of our very personal “money story” … and for a lot of people, “money trauma.”

The Past Influences the Future

Our experiences with money over the course of our lives create a dramatic effect on the decisions we make with our money today.

Stop for a minute and think back to your very earliest memory of money.

No, really do it. I’ll wait.

Alice’s Story

Many years ago, when I was a young financial advisor, I had a client who we’ll call Alice. Alice shared with me that in her earliest childhood memories she was living in the backseat of a car with her alcoholic father and 4 other siblings. They had no money for a home and barely enough for food. She shared several specific and tragic memories with me about that period in her life. Eventually social services intervened and took her and her siblings to live with her grandparents.

I learned about this story because every time the market dipped, Alice would call me and tell me that she wanted to take an early withdrawal from her IRA to pay off her house.

I knew Alice as an intelligent, strong-willed woman who had done an excellent job saving and investing for retirement. The fact that I had to remind her that taking such a large amount of money from her IRA (resulting in nearly $100k in taxes and penalties) would not be a wise financial move, seemed odd. The fact that I had had to remind her SEVERAL times made me wonder if there was more to the story. It was obvious to me that something in her past was affecting her present. Alice had experienced severe “money trauma” early in life.

Alice’s story is traumatic and upon hearing her story it’s easy to see how that experience could leave a lasting effect. Many of the clients I’ve worked with over the years have stories of significant loss; divorce, a partner who was financially abusive, a death. There is no denying these events shape interactions with money.

Richelle’s Story

Sometimes money trauma is less obvious.

In my own life, the earliest experience with money I can recall was when I was three years old. I got a Strawberry Shortcake purse. In my purse I carried a little cherry ChapStick, a little blue Gideon Bible, and some change for my Sunday School offering.

My earliest memories of money are surrounded by feelings of security and giving. But like most people, my “money story” has many chapters.

When I was four years old, my dad (a multigenerational cattle rancher) sold everything we owned to follow his call to impact the world with the gospel. My dad was a full-time college student and part-time janitor. My mom was a stay-at-home mom who also babysat full-time.

We had been pretty “poor” since leaving the farm. Though we didn’t have much money for new school clothes or eating out in restaurants, it wasn’t particularly traumatic for me. We were always clean and well fed so I didn’t FEEL poor… at least not until I looked at the car in our driveway. In my mind that car had “poor” written ALL over it.

I went to great lengths to avoid being seen getting in or out of it. And for the most part I succeeded… until that dreadful day in 1988.

The Birthday Disaster

“Just drop me off here” I said to my dad as he was about to turn into the quarter mile long driveway. It was a beautiful summer day but my heart was full of dread and my stomach was in a knot. I silently prayed “oh, God, please don’t let anyone see me.” I hopped out of our green, 1969 Plymouth Fury, gave the huge heavy door a hard push hoping that it would close the first time “and please, do NOT let this car die here” I added to my plea.

Maybe dad could be gone before anyone noticed us and I could just quietly arrive at this birthday party.

Maybe no one would have to know how poor I was. I turned around, gift in hand, and started to make the long walk up to the house. The green Plymouth chugged away.

“Mission accomplished,” I thought. But what about when he came to pick me up? How would I handle that? I started to panic but decided I would have fun first and worry about that later.

As I got closer to the house, I saw them… 10 round 3rd grade faces gathered in the picture window watching me. The final steps to the house were filled with dread. When I got inside it was even worse than I had feared.

“Why did you walk?” “Was that your car?” My friends asked through their giggles. They thought it was all hilarious… and I was devastated. I wanted to run away. I wished I had never come. That is the only thing that I remember about my friend Autumn’s 9th birthday party – feeling completely embarrassed – my desire to belong, my self-esteem, it was all destroyed by that stupid, loud, green boat of a car.

Money trauma.

You can see the effects of that story on my life today. As an adult, as soon as I could afford it, I bought myself a Mercedes.

After nearly 20 years in the financial planning industry, I have heard many many money stories. Everyone’s story is different… and even if the stories are similar, they have a different effect on each person.

Money Traumas (Large or Small) MATTER

One thing is certain: our money stories, our money traumas MATTER. They shape our present and our futures. They impact our relationships with our kids and our spouses. They change the way we spend, save and invest.

It is important to identify our money stories.

Start by asking yourself these questions:

  • What was it like growing up around money?
  • What is your greatest fear about money?
  • Is that fear driving any irrational behavior?

Answering these questions is a great first step towards being more intentional and rational about your money decisions.

Money might SEEM like facts and figures, but there are few things more emotional than money.

Like most things in life, unwinding your money story is easier if you have a partner on the journey. Finding a good financial advisor that you feel comfortable sharing with can be immensely helpful.

Discuss your money story with your advisor today!

Impact Wealth Management LLC is a fee-only Registered Investment Advisor (RIA). We are based in beautiful Sioux Falls, SD and regulated by the State of South Dakota. Throughout this site, we went out of our way to present unbiased data believed to be from reliable and respected sources. However, its accuracy, completeness, and relevance are not guaranteed and no responsibility is assumed for errors or omissions.