I’m a Financial Therapist: 3 Common Money Wounds That Can Keep You in Debt
Written by
Laura Bogart
Edited by
Kristen Mae
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You might think there’s no room for emotions when it comes to personal finance. Handling cold, hard cash demands cold, hard logic, right? Wrong. Human beings are inherently emotional, and they bring their feelings into every aspect of their lives, whether they’re aware of it or not. That includes personal finances.
Sometimes, these feelings are inspiring, like the burning desire to be successful or the love of friends and family that compels you to protect them financially. Other times, the feelings you’ve formed around money can do you more harm than good.
Whether it’s a history of watching your family mismanage money or personal shame about your own spending habits, your feelings about finances can haunt you. Worse, they can prevent you from achieving the kind of life you want.
But you don’t have to be impacted forever. By understanding the origins of your money wounds, you can take steps to heal them.
1. Family History
Like many people, you’ve probably learned your first money lessons from your parents or guardians. If you saw them overspend or take on crushing amounts of debt, you might not have had positive role models who showed you the value of saving carefully, which could have led you to become a spendthrift as you got older.
If your family simply didn’t talk about money or emphasize financial literacy, you might have come into adulthood with the sense that finances are too taboo to discuss. Even thinking about money may cause you genuine anxiety, leaving you at a distinct disadvantage. After all, if you’re not willing to learn about how credit cards work, how can you use them responsibly? And if you don’t know how debt functions, how could you possibly get out of it?
2. Sudden Losses
As a financial therapist, Jillian Knight, LMFT and owner of Her Financial Therapy, has helped a lot of people overcome their emotional roadblocks around money. She’s seen people hit with sudden financial losses, like debt from a divorce or medical event, and lose their confidence and their moorings.
Since the event was outside of their control, they experienced the financial ramifications as also being beyond their control. Knight says these feelings can lead them to simply throw up their hands or bury their heads in the sand when it comes to creating a plan to repay that debt.
3. Cycles of Debt
There are many reasons people can end up in debt. Sometimes people soothe their emotional wounds with shopping binges, leaving them staring at their credit card statements in horror after the fact. Or young people can take out student loans they don’t fully understand and end up overwhelmed not only by the debt itself, but by high interest rates — finding themselves on the other end of the line with a student loan debt collector who cheerfully asks if they can make a monthly payment that is the equivalent of their rent (or more).
According to Knight, it’s not uncommon for those overwhelmed by debt to get so angry and scared that they ultimately work against their own self-interest.
“The emotional roadblocks associated with debt often include some combination of shame, anxiety, fear, anger and/or low self-confidence, which can lead to avoidance, emotional spending and difficulty taking intentional action to get out of debt,” she said.
How to Help Yourself
Instead of ruminating on supposed failures, allowing yourself to slip deeper into fear and self-doubt while avoiding your debt, Knight encourages you to show compassion for yourself. Her advice for people having big feelings about being in debt?
“In order to work through these emotional roadblocks and get out of debt, there has to be an awareness and acceptance of the deeper underlying emotions and beliefs that are keeping them stuck,” she said.
She emphasizes the importance of understanding all the factors that have shaped a person’s relationship with debt, including systemic influences beyond their control. Instead of piling on shame or self-criticism, she encourages practicing self-compassion and reframing how they view themselves in relation to their financial difficulties.
As they work through these issues, Knight suggests developing a realistic and personalized plan for getting out of debt that reflects their needs and values.
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