Money trauma: A deeper look into the emotions behind your saving, spending

Joining us now, Jamila N Mcloney, a financial advisor for Blackwell Financial on this week's FA Corner brought to you by Capital Group. Jamila, I think we all suspect that emotions affect our money, but you have done more of a deep study of it. Um, and can sort of talk about it in more concrete ways. and in particular, I know that you have expertise in financial trauma. And I guess first of all, I'd like to ask what what does financial trauma entail? What rises to the level of being that sort of damaging to your psyche that it that it counts as trauma from a financial perspective.

Uh, well, the trauma of money involves your thoughts, beliefs and feelings around money and the experiences that may have shaped them. So maybe you grew up and you saw your parents fight about money or there wasn't enough money or they didn't talk about money at all and there was a sense of silence or shame. That impacts how you deal with your money in everyday life in ways that you may not even be aware of.

And so, when you're talking to clients about this, how do you sort of get at that, right? How because I think people are, as you said, people, a lot of people aren't aware of how that's affecting how they are now thinking about money.

It's very interesting because it's it's a pattern, right? So I see I I'll design a financial plan and no matter what the income is, you'll see certain spending like they may be stressed and then they just go on a shopping spree or they may hit their goal, their financial goal and immediately just blow it all. So, once I can identify these patterns, then it helps me see and ask the questions and that's one of the questions I start with, you know, what did money feel like in your home? What did it feel like when you grew up? To kind of get an understanding of how those patterns developed and what they are so that I can identify and help them work through them.

And then, um, as people are now working through them, how do they go about doing that, right? And also, I would imagine, part of the discussion is as you say, a lot of it came from family history. How do people make sure that they're not then sort of repeating the cycle, right? Of of some of the carrying over some of that baggage there that they have.

Yeah, I think most importantly being aware, you know, like you said, most people don't even know they're doing that. So if you can catch yourself and be aware and identify the emotions that are running when you make that decision, when you swipe the card, when you know you shouldn't, or when you pull out of the investment or you have this fear or whatever emotion coming up, if you can just be aware of what that is and what your behavior follows behind that. And so when when you can be aware, then you can kind of hone in on it and you can pause and make a different decision and make a different action with your money because you're aware of what's happening and what's driving those decisions.

Well, and to your point there, um, is it seems like that that sort of taking that pause is one of the more slowing it down is one of the more important things that people can do.

Yeah, slowing it down and I always tell my clients, you know, give yourself grace, you know, it's so easy to be shamed or stressed or beat yourself up because you know better and you don't want to do these these things that you shouldn't do that negatively affect your financial plan and you just do it on repeat like automatic. And so just giving yourself grace. It takes time, right? You didn't develop these habits or um things overnight. So you're not going to, you may still be aware and still fall into those patterns, but it's going to take time as you're aware, you you'll start to develop more of a um kind of guard rail and you'll catch yourself more and more as you develop and kind of heal out of those patterns.

Jamila, this is, um, not the way that most of the financial advisors that we talk to that they approach things, right? And so I'm curious how you came to this approach, um, from sort of looking at more of the emotional perspective of people's relationship with money.

I was actually a pre-med major in college, uh chemistry and psychology. And so I studied behavioral science and when I moved into the financial advising industry, I noticed that it it's not just money, right? It it has so much more to do. You can't out earn your way out of these emotions, just like our emotions affect us in our personal and intimate relationships. They affect everything about us even in the way that we handle and manage money. So it's very fascinating how those intersections happen and once I started to see like, you know, what's going on here? You're not following the plan. You know, these people are intelligent, they they they have the income but there's something that just stops them and keeps them from reaching the goals that they've been trying and it's frustrating. And so once I kind of got the background and the education behind it, even systemic trauma, there's so many things that affect how we manage our money that's just not about spreadsheets and budgets. So, um, seeing the bigger picture and wanting to help people in a in a better way and having that science background, has really helped me be able to pull all that together to look at the financial plan in a different way, maybe that most advisors don't do.

Yeah, it makes sense. Jamila, thank you so much for joining us. Appreciate it.

Thank you.

That was FA Corner brought to you by Capital Group.