Money Trauma and Financial Literacy: Why It Matters and How to Overcome it

Almost every person I speak to during consultations expresses that money stresses them out. The topic of money can be intimidating, and not everyone had the privilege of being taught financial literacy. Your relationship with money is often passed down from previous generations. 

Young women and femme individuals, especially those who are BIPOC, are statistically disadvantaged when it comes to financial literacy. Gen Z, as a whole, is the least financially literate of all current generations. 

Being financially literate means knowing how to make smart decisions when it comes to building wealth, paying taxes, saving, and avoiding scams. It’s more than just budgeting, it covers a wide range of topics. Financial literacy is a skill that must be taught, yet most Americans never learn it in school. So if you’re not learning it through school or your profession, your only exposure to money management is likely through your family. This is where money trauma intersects with financial literacy. 

Money trauma refers to the deep emotional wounds we develop around money, often rooted in past financial experiences. Growing up in financial instability, witnessing family conflict about money, experiencing financial abuse, or living with overwhelming debt, all of these are forms of money trauma. 

I’ve had clients call me afraid to spend money or completely avoidant of tax preparation. Many people feel ashamed or embarrassed that they don’t understand taxes or investments. I’ve talked about money with thousands of people, and I can assure you it’s normal. Most people don’t know how money works, but the only way forward is to start learning. 

Financial literacy isn’t a switch you can flip by taking one class. There’s a lot to learn, but if you take small, consistent steps, you can break free. Many of our clients are coming into wealth for the first time and are setting themselves up for lifelong success. 

Our goal is to provide a safe, judgment-free space to talk about all things money. We know it’s a heavy topic for many people, and it can feel uncomfortable but it’s critical. 

There is no such thing as a dumb finance question. Learn and empower yourself.