Personal Finance with Warren Ingram Personal Finance - How does trauma affect your money?
Aug 31, 2023
Gugu Sidaki, a Certified Financial Planner and Chief Financial Planner at WealthCreed, specializes in personal finance and the psychology of money. In this discussion, she highlights how trauma—like poverty and parental loss—can lead to significant financial challenges. Gugu explains common financial behaviors tied to trauma, such as overspending and hoarding, and urges the importance of financial literacy. She also emphasizes the unique influences of upbringing on money habits and offers strategies for rebuilding finances after trauma.
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Trauma Shapes Financial Wellbeing
- Trauma types like neglect, violence, parental death and poverty shape emotional, spiritual and financial wellbeing.
- Research links trauma directly to later financial difficulties, especially where poverty is present.
When Finance Problems Need More Than Advice
- Financial planners can spot when money problems exceed pure literacy issues and require other interventions.
- Advisors refer clients to psychologists when underlying trauma prevents financial progress.
Danger Perception Alters Money Behavior
- Trauma raises perceived danger, driving over-indebtedness, overspending or unhealthy hoarding.
- Financial behaviours often signal deeper psychological responses rather than simple ignorance.