Many of us experience adversity that has a lasting impact on our physical and emotional health. This article was inspired by a recent book I read by Oprah Winfrey and Dr Bruce D Perry titled “What happened to you,” which suggests that what happens to us in our childhood has a profound impact on our emotional responses and defines our patterns of behaviour into adulthood. By understanding our past, we can clear a path to our future, especially when it comes to personal finance and investment planning.

Money matters more than just the numbers in your bank account; it is a reflection of deeper psychological and behavioural patterns. From an early age, we begin to form associations with money that shape our financial habits, attitudes, and ultimately, our financial well-being. But why do some people view money as a source of security, while others see it as a source of stress or a tool for power? The answer often lies in the question, “What happened to you?”

The Impact of Early Experiences
Our earliest experiences with money set the stage for our lifelong financial behaviours. These experiences can range from witnessing how our parent’s handled finances to the socio-economic environment in which we were raised. If you grew up in a household where money was scarce, you might have developed a scarcity mindset, constantly worrying about not having enough. This could lead to behaviours like hoarding money or, conversely, overspending to cope with the stress of financial insecurity.

On the other hand, if you were raised in an environment where money was abundant and freely spent, you might have developed a more relaxed attitude toward money. However, this can sometimes lead to underestimating the importance of saving or being frugal. The key point here is that early exposure to money-related behaviours and attitudes significantly influences how we perceive and manage our finances as adults.

Behavioural Conditioning and Money Scripts
Psychologists have identified “money scripts,” which are unconscious beliefs about money that are formed early in life and are often passed down through generations. These scripts can be positive or negative, and they tend to operate under the surface, influencing our financial decisions without us even realizing it.

For instance, if you were taught that “money is the root of all evil,” you might unconsciously sabotage your financial success because you associate wealth with negative traits. Conversely, if you believe that “money will solve all your problems,” you might find yourself in a cycle of constantly chasing after more money, believing that it will bring happiness, even when it does not.

These money scripts are powerful because they are tied to deep-seated emotional and psychological needs. For example, someone who grew up in a financially unstable environment might develop a money script that equates having money with safety and security. As a result, they might become overly frugal or obsessively save to the point where they deprive themselves of enjoying life.

The Role of Trauma and Financial Behaviour
Trauma, especially financial trauma, can have a profound impact on your relationship with money. Financial trauma can result from events such as job loss, bankruptcy, or even growing up in poverty. When you experience financial trauma, your brain may start to associate money with danger, triggering a fight-or-flight response whenever you are faced with financial decisions.

This response can manifest in many ways, such as impulsive spending, avoiding financial matters altogether, or becoming overly controlling with money. For instance, someone who has experienced a significant financial loss may become risk-averse, missing out on opportunities for growth because they’re too afraid to invest. Conversely, someone who has experienced financial deprivation may become a compulsive spender, trying to fill an emotional void with material possessions.

The Influence of Social and Cultural Factors
Your social and cultural environment also plays a significant role in shaping your relationship with money. In some cultures, money is closely tied to status and success, leading people to associate their self-worth with their financial status. This can create a constant pressure to earn more, spend more, and display wealth as a measure of personal value.

Social factors, such as peer pressure and societal expectations, can also influence your financial behaviour. If you are surrounded by people who prioritize material wealth and consumerism, you might feel compelled to keep up, even if it means living beyond your means. Conversely, if your social circle values frugality and financial responsibility, you might be more inclined to adopt those behaviours.

Breaking the Cycle: Developing a Healthy Relationship with Money
Understanding the behavioural roots of your relationship with money is the first step toward developing healthier financial habits. By recognizing the money scripts and emotional triggers that drive your financial behaviour, you can start to reframe your mindset and make more conscious financial decisions. One effective approach is to practice mindfulness around money. This means becoming more aware of your emotional responses to financial situations and questioning the underlying beliefs that drive those responses. For example, if you notice yourself feeling anxious about spending money, ask yourself why. Is it because of a fear of not having enough, or is it tied to a deeper emotional need? Another crucial step is to educate yourself about personal finance. Knowledge is empowering, and the more you understand about how money works, the more confident you will feel in managing it. This can help you break free from negative money scripts and develop a more balanced and positive relationship with money.

Conclusion
In conclusion, the way you manage money is deeply influenced by your past experiences, emotional needs, and social environment. By understanding what happened to you and how it shaped your financial behaviours, you can take control of your financial future and cultivate a healthier, more fulfilling relationship with money.