How to ditch money baggage

Financial trauma can shape our financial decisions in ways that reinforce unhealthy patterns. Recognising these patterns is the first step towards rewriting them.
Rather than forcing yourself into big financial decisions, start with small, manageable steps that build confidence and show your brain that engaging with money isn't a threat.
Start by looking at habits that trip you up and replace them. The more you practice habits that align with your goals, the easier they become.

Most of us have some kind of emotional baggage when it comes to money—whether it’s growing up in a household where finances were a source of stress, experiencing a sudden job loss or struggling with debt. And while we may think we’ve moved on, the past has a way of shaping how we earn, spend, save and grow wealth. “We often think of trauma as something big—an assault, a car accident, a near-death experience,” says money coach and psychologist Eloise Tomkins. “In reality, most of us have experienced trauma of some sort, including around money.”

And like any lingering stress, financial trauma can manifest emotionally—through dread, irritability or anxiety—and physically, with symptoms like a pounding heart or breathlessness. It can also shape financial decisions in ways that reinforce unhealthy patterns. Tomkins works with clients to rewrite the money narratives that hold them back.

“Many of my clients grew up in households where money was a source of tension. One had a parent so irresponsible with money they bought a motorbike for their child to ride in the backyard but couldn’t afford the power bill. That led to deep shame in adulthood, an overwhelming sense of responsibility and resentment towards their earnings—so much so that they micromanaged their employees and struggled to scale their business.”

So how do we heal from financial trauma and break free from its grip? We asked two experts for their tips.

Tune in to that inner voice

“Financial trauma, stress or insecurity can alter our beliefs about money and our capacity to manage it effectively,” explains psychologist Anoushka Dowling. “Experiences like this can result in us saying to ourselves: ‘I’m not capable of managing money,’ ‘It’s my fault I’m in this situation,’ ‘How did I get myself here?’ or ‘I should have planned better.’”

These thoughts don’t just affect confidence—they shape our decisions. Start by simply noticing your inner dialogue. When you catch yourself thinking negatively about money, pause and ask: “Is this belief helping me? Is it even true?” Recognising these patterns is the first step towards rewriting them.

Tip

Practise gratitude. It might seem counter-intuitive but a daily practice of gratitude for what you do have is a fantastic mindfulness strategy to incorporate, says Dowling. “Write down things that you’re grateful for. These can be tangible, such as a roof over your head, or less tangible, like your resilience and courage. The practice of gratitude can focus your mind on abundance rather than lack and is strongly and consistently associated with a more positive mood and happiness—and it’s completely free!”

Learn to sit with discomfort

Understanding the numbers is one thing—facing how money makes you feel is another. “Many people understand the practical side of money management but overlook its emotional impact,” says Tomkins. “This is often why people continue to struggle with money, even while knowing they want to get better at it.” A simple exercise: next time money triggers discomfort, take a deep breath and ask yourself, “What am I feeling and where is this coming from?” Naming emotions can help reduce their intensity, making it easier to move forward.

Start small when it comes to making changes

“Often people are told to ‘feel the fear and do it anyway,’” says Tomkins. “This is terrible advice. We need to help our nervous system feel safe with money so making changes gradually can be helpful.” Rather than forcing yourself into big, overwhelming financial decisions, start with small, manageable steps that build confidence. Like checking your category budgets in Money Plan in the CommBank app once a week instead of daily. The goal is to show your brain that engaging with money isn’t a threat. As these small steps become more comfortable, you can gradually take on bigger financial decisions with less fear and more control.

Spot your money triggers

Ever find yourself adding to cart after a stressful day? Or avoiding your account balance like it’s haunted? You’re not alone—these are money triggers at play. Tomkins suggests identifying the situations that lead you to make financial decisions that don’t align with your goals. “Notice your thought patterns and ask yourself, ‘Is this my money story or is it coming from my past experiences and family history?’” Next time you catch yourself making a knee-jerk money move, pause and ask yourself: “What’s really driving this decision?”

Replace old tendencies with new ones

Breaking bad money habits isn’t just about willpower, it’s about giving yourself something better to work with. If old patterns aren’t serving you, it’s time for an upgrade. Start by looking at the habits that trip you up. Do you avoid checking your balance because it stresses you out? Try pairing it with something positive – like your morning coffee—so it becomes less intimidating. Always impulse spending when you’re feeling low? Create a “pause rule”, such as leaving things in your cart for 24 hours before buying.

The key is to replace, not just remove. If budgeting feels restrictive, frame it as “spending with intention” instead. And if saving feels like a chore, make it automatic and link it to something exciting (hello, dream holiday fund). The more you practise habits that align with your financial goals, the easier they become—and the more confident you’ll feel about your money choices.

If you’re struggling to climb out of debt, there’s judgement-free help available. Call the National Debt Helpline on 1800 007 007. If you’re concerned that you or someone you know is being financially abused, contact 1800 RESPECT (1800 737 732) for support and assistance. If you or someone you know is struggling with financial trauma, Lifeline is available 24/7 on 13 11 14.

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