Money isn’t just about numbers – for many, it’s deeply emotional. If you’ve ever found yourself feeling overwhelmed, ashamed or even panicked when dealing with money, you could be experiencing something more than just money stress. This is where the concept of financial trauma comes in.
In this guide, we’ll explain what money trauma is, how it can show up in your daily life, and what steps you can take toward healing. While MoneyPlus can support with debt and money management, we can’t provide support for trauma. If you believe you’re experiencing financial trauma, it’s important to speak to your GP or a mental health professional.
What is financial trauma?
Financial trauma is a term used to describe emotional or psychological harm caused by past money-related experiences. It can come from sudden financial loss, ongoing deprivation, or repeated financial stress. Over time, these experiences can affect how someone feels, thinks and behaves around money.
It’s not a formal mental health diagnosis, but many people report trauma-like responses triggered by financial events, even long after the danger or difficulty has passed.
Examples of causes include:
- Losing a job unexpectedly
- Growing up in poverty or in a household where money was a constant source of stress
- Going through eviction or homelessness
- Experiencing financial abuse in a relationship
- Surviving a crisis like the cost of living crisis or pandemic while under extreme financial pressure.
Money trauma symptoms
Everyone responds differently, but there are common signs that may indicate financial trauma:
Emotional symptoms:
- Feeling ashamed or guilty about spending, even on essentials
- Avoiding conversations about money
- Feeling anxious or tearful when checking bank balances or opening bills
- Flashbacks or nightmares linked to financial experiences.
Behavioural symptoms:
- Avoiding bills or banking apps completely
- Compulsive spending or hoarding money to feel in control
- Struggling to trust others with joint finances
- Trouble making financial decisions, even small ones.
Physical symptoms:
- Sleep problems
- Headaches, fatigue or stomach issues when dealing with money
- Panic attacks triggered by financial situations.
Money trauma can sometimes overlap with other mental health conditions, such as anxiety, depression or post-traumatic stress disorder (PTSD). If any of these symptoms are affecting your day-to-day life, it’s important to speak to your GP.
How financial trauma affects everyday life
The effects of financial trauma can show up in different ways:
- You might find it hard to trust yourself with money, even when your finances are stable
- You may feel stuck in a cycle of overspending, avoidance, or guilt
- You could struggle to build savings or feel undeserving of financial security
- Planning for the future – even short-term goals – might feel impossible.
For some, financial trauma can even lead to relationship issues, work problems, or avoidance of healthcare and other essential services.
Money trauma and debt: when past experiences shape future decisions
Not everyone in debt has money trauma but trauma can make managing debt much harder. If your past financial experiences involved fear or shame, it might feel impossible to open a letter or speak to a creditor. You might delay seeking help, even if you know you need it.
At MoneyPlus, we understand how complicated this can feel. We help people deal with debt every day and we know that avoiding help doesn’t mean you’re irresponsible. It can mean your experiences have left a deeper emotional impact.
Money trauma recovery
Healing from financial trauma is possible but it takes time, support and self-compassion. Here are some approaches that may help:
1. Acknowledge your experience
Recognising that what you went through was difficult is the first step. You don’t need to minimise it just because others ‘had it worse’. Your experience is valid.
2. Speak to a professional
If your symptoms are affecting your mental health or day-to-day life, speak to a GP. They may refer you for therapy, including trauma-informed counselling or cognitive behavioural therapy (CBT).
3. Take small financial steps
You don’t need to fix everything overnight. Try:
- Checking your balance once a week
- Opening one letter at a time
- Tracking your monthly income, expenses and disposable income using our disposable income calculator.
4. Challenge unhelpful beliefs
Trauma can leave you believing you’re bad with money or undeserving of stability. Therapy can help shift those patterns but so can small acts of self-kindness and reflection.
5. Build a basic financial plan
Having a simple, manageable budget can reduce fear over time. Focus on the essential debts first, then slowly rebuild confidence.
6. Set boundaries around financial conversations
If talking about money with family or friends is upsetting, it’s okay to set limits. Let people know when – or if – you’re comfortable discussing finances.
Can debt solutions help with money trauma?
Debt solutions won’t treat trauma but they can help make your financial situation more manageable. They can give you more room to rebuild financially and emotionally. After taking out a debt solution, 2 in 3 customers who took part in a survey by MoneyPlus said they felt less stressed.*
How Breathing Space can help if you’re feeling overwhelmed
If you’re finding it hard to open letters, speak to creditors or even think about your finances, you might benefit from a government scheme called Breathing Space. Also known as the Debt Respite Scheme, Breathing Space gives you legal protection from most types of debt enforcement for 60 days. During this time:
- Your creditors can’t chase you for payment
- No interest or fees are added to your debts
- You get time to speak to a professional debt adviser and explore your options.
If you are receiving mental health crisis treatment, you may be eligible for Mental Health Crisis Breathing Space. This offers stronger protection and lasts for the entire duration of treatment, plus 30 days. An approved mental health professional must confirm your eligibility.
These schemes don’t write off your debt, but they can offer vital breathing room when you’re at your lowest point. To apply, you’ll need to speak to a registered debt adviser.
When to ask for help
If you’re avoiding money, feeling stuck, or constantly panicking about finances, you don’t have to figure it out alone. Whether your trauma comes from childhood poverty, financial abuse or a single difficult event, support is available and you deserve to access it. For support with your mental health, speak to your GP or local NHS talking therapies service.
For free, impartial money advice, visit MoneyHelper. Or, contact an adviser at MoneyPlus. We’ll talk through your financial situation and help you explore the right solution for you.
*MoneyPlus customer survey 366 respondents May 2025.
