We talk a lot about financial empowerment and ways to save, but many are still struggling. It is not enough to know what to do; you must have a plan of action! If you ask the average person what they should do with a bonus, they will tell you the right answer: pay down debt, add it to savings, or invest it. But what we actually end up doing is shopping, taking a vacation, or treating ourselves to something nice. And why not? We tell ourselves we deserve a treat as a reward for our hard work. But that immediate satisfaction is actually doing a disservice to our future selves. We know better, but why don’t we do better? 

What is Financial Trauma?

Financial trauma is the emotional and psychological distress caused by chronic money stress and scarcity. Repeated financial stress can lead to an unhealthy relationship with money, resulting in anxiety, avoidance, and poor decision-making. It is believed that two-thirds of adults have some form of financial trauma as a result of poverty, debt, or parental conflict. Known behaviors associated with this trauma include ignoring bills, refusing to check bank statements, reckless spending, or hiding purchases from your partner.

Admitting is the First Step

Now that we’ve named the problem, what can we do about it? The great thing about human behaviors is that they can be changed. You can actively work to change your relationship with money, debt, bills, and spending with the help of a financial counselor. A financial counselor can help you address the root causes of your unhealthy relationship and work to make it better. Through financial counseling, you can (1) identify your triggers, (2) create an action plan, (3) build a healthier relationship with money, and (4) maintain accountability.

Real Self-Care

Knowing better is not the same as doing better. It takes time, education, and accountability to create lasting change. A continued pattern of unhealthy financial behaviors can snowball into a larger issue. Buying yourself a nice treat in response to a stressful situation is a temporary fix to a larger issue. Real self-care involves examining your financial trauma and making a commitment to change. A Financial Empowerment Counselor can work with you beyond your immediate needs, help you build confidence, create a plan of action, and support you along the way.

For more information on financial counseling, register for our Financially-In-Tune (FIT) Budget and Credit Group Education course.

The Louisville Urban League is dedicated to fostering economic empowerment in order to elevate the standard of living in historically underserved urban communities, with our focus on Jobs, Justice, Education, Health, Housing, and Black Business.

We provide many services, including job coaching, record expungement, health navigation, financial counseling, and support for small businesses.

For more information call (502)585-4622 or visit lul.org.