Introduction to 'Money Trauma'

Trauma and 'capitalism as usual' are deeply interconnected.

I still laugh to myself that I’m starting a newsletter on a subject like finance. I’ve always seen it as a rational, male-centric subject that I - a self identified ‘emotional’ female, wouldn’t find myself anywhere close to. But I fool myself in the irony of trying to split a subject so complex into such a limiting binary. Because if we just tune in and lean into the reactions of people around us in response to the current layoffs, inflation, rising gas prices and threat of all kinds of social and economic collapses - it’s clear that money invokes anything and everything but the rational. And that’s because the way we interact with money isn’t rational - 90% of all money behaviors are made emotionally.

As a product designer who formerly worked in crypto, being confronted with graphs and charts of cryptocurrency market trends plummeting funnily, brought me right back to memories of my childhood. I have a Malaysian-Chinese heritage, and grew up in ‘New Money’ - everyone around me coming from generations of poverty to suddenly having more wealth than they’ve ever had before. Although we no longer had to be preoccupied with survival, it was clear that our relationship with money was still dysfunctional. I grew up surrounded by plenty of unhealthy financial behaviors - reckless spending, risky investments, gambling. In conversations around career, there was plenty of status seeking, dirty competitiveness. Families around me had disputes around inheritances that involved betraying those closest to them.

Money was always laced with a tinge of bitterness. It’s as if the culture was still collectively organized in fear, and even though memories of poverty were rarely mentioned like it never existed. It’s as if being thrown back into a life without safety was always lingering behind us, even if we had moved forward.

It was a gradual process to realise that my resistance to anything financial was much more than a theoretical hesitance - it was deeply emotional. And I know this isn’t just my story, but the story for so many of us in the world.

What’s Money Trauma?

The term ‘trauma’ in common conception is still used to refer significant one-time events. It’s associated with war, PTSD, violence, natural disasters or horrific accidents. A single, one time event which significantly affects the individual who experiences them. Psychologists call this ‘Big T’ trauma. What’s less spoken though - is ‘little t’ trauma, that derive from much more ‘ordinary’ life experiences. Granted, the framing of ‘little’ doesn’t mean the effect of it is any lesser. Financial trauma is currently considered under this branch. I’m going to cover a bit about this right now, but if you’d like a deeper dive, read my next article The Anatomy of Economic Stress & Trauma.

The concept of money, financial or economic trauma will be intuitively familiar to mostly all of us around the world. You might have heard of the ‘scarcity mindset’ - a belief system that’s obsessed with never having enough. Then there’s the ‘abundance mindset’ (the one everyone tells us we should have). A belief that there’s always enough, everything is an opportunity. However, where it lacks more depth is the acknowledgement that these mindsets do not arise in a vacuum. It does not just innately come from ourselves as individuals. The systems we are a part of, internalized beliefs and our experiences play a significant role in psychological & physiologically impacting from which perspective we look at the world. Most proposed solutions are just to simply alter our scarcity mindsets into abundant ones. Just look at the bright side of life and the problem is solved!

This is easier said than done, especially if you’ve experienced chronic volatility with security or very little personal financial safety. Narratives such as “I will never be able to make enough money” or “I am not loved and successful without money” are highly likely to emerge from a period of chronically not being able to meet one’s needs. The traumatized brain is more likely to suffer from compromised executive function, which affects problem solving, multi-tasking & long term decision-making. It may also have a lack of what trauma psychologist Gabor Maté calls ‘response flexibility’ - the ability to pause, calm oneself, and make a rational decision between stimuli and reaction.

What does this mean with one’s behavior with money? People with financial trauma are more likely to make make risky investments, take on debt they cannot pay back, spend impulsively and save less. They can also act on the opposite spectrum and become frugal - anticipating lack of security with every life decision, many times to unhealthy levels.

This is the psychology behind what’s commonly known as the ‘poverty trap’ - alongside societal factors like racism, class exclusion, domestic and sexual violence and colonialism that make social mobility and holistic wellbeing an unrealistic ladder to climb for many. But these factors altogether are still rarely framed as a trauma - which is so much more powerful than seeing the ‘human condition’ as static and unresolvable.

It’s not enough to go to therapy

Trauma is having a big boom in public dialogue, at least in some circles in the West, where I live. Self love and going to therapy are gaining more and more traction as topics in the household. However, it’s still largely discussed, and treated, as a personal issue. How did your childhood fuck you up? How did your parents treat you?

Many people going through the process of resonating with their own adolescent histories slowly come to a realization that their parents were imperfect humans too. We might start investigating that perhaps mum and dad were really stressed, and that was at their root of their addictions, neglectful or abusive behavior. Perhaps dad overworked all the time and was isolated from emotional support networks that could support him. Perhaps they were both immigrants and found it extremely difficult to adapt to a whole new world. Perhaps that new world was hostile, and the tools that were available to them were ill equipped to actually help them. They couldn’t help but continue living in survival and passing it down onto you - no matter if we find that it makes them more forgivable as parental figures or not.

I would love for everyone to have a financial therapist and heal their money trauma, maintain tools that help them keep their wealth, as well as feel secure while navigating the challenges of society - but that probably isn’t realistic. Individual change is powerful and neccesary, but feels only like a surface level intervention when the reasons why they become traumatized in the first place, are systemic.

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The psychologically extractive economy

The systems we are a part of, the tools we use, and our cultural and relational norms have a huge impact in our ability to navigate life as healthy people. For example, to be successful in society today, it is expected for us to have a secure relationship with money. We should know how to get opportunities to earn it, spend it, manage it, invest it. There is a myriad of financial advice, but most of them hardly ever touch upon how a negative relationship to money and work could be correlated with toxic stress and trauma.

In both micro and macroeconomics, many economists only know how to rationalize our financial habits through the lens of behavior, but never the origin of stress. An analysis on behavioral economics states that this leads to “to the underdevelopment of behavioral theory examining the choices or motivations of individuals within these environments, resulting in sub-optimal models and policy.”

Consider another scenario here - a father losing all, or most, of his wealth through Bitcoin rapidly falling in price.

The common justification would be that the father shouldn’t have bought enough crypto to lose his property in the first place. He shouldn’t have taken the risk, and now he has single-handedly fucked the entire family. This ‘poor personal responsibility’ narrative is common in the private sector. Companies shift the whole responsibility of informed decision-making to consumers, failing to consider how psychological circumstances work with products, marketing and business models to move us away from making healthier choices in the first place.

I’m not against investing or trading in assets, and I’ve of course owned crypto myself before. But rare is the consideration about how products we as UX designers design contribute into the lack of protection towards consumers. That stuff is only for financial regulators in government. High frequency trading in stocks and cryptocurrencies in the digitalized age elicit psychological responses that have long been compared with gambling. In the meantime, many financial organisations will actually make the most profit when we slip up, make mistakes and act on emotional financial impulses.

It’s indisputable that stocks and cryptocurrencies, have gotten many people richer. A slightly kinder, but equally passive justification would perhaps say sadly that not everyone wins in the game of capitalism. Just game dynamics, innit.

What if we added more consideration towards why people were doing what they were? What if we created systems that didn’t treat people like collateral?

Survivalist cultural norms

It’s not just products and services, but also the way we relate to each other, or navigate being a ‘successful’ part of the economy that contributes into economic trauma.

The Myth of Normal, by Gabor Maté & Daniel Maté

What’s expected of us to be ‘successful’ is highly dependent on social norms and cultural values, which differs globally from place to place. However, a similar thread can be found in many of them, where values to do with money and our place in the economy are highly survivalist. For example - In Malaysia, the local Chinese tend to be very resentful towards the Malay government for providing economic welfare only for the ethnic Malays. We work harder than them. They’re lazy, we’re not. When I told a Malaysian friend that I was happy to be receiving unemployment benefits in the case of being laid off, I was met with incredible resistance. It’s in our work ethic and narrative to not rely on government help. You do it on your own. It binds well with trauma, in the form of internalized oppression. I had many conversations with German friends who grew up in the working class, where they recall memories of being repeatedly shamed by their other working class peers for receiving financial help from the government.

There is a direct relationship between trauma and hyper-independence, which both work in parallel to shape narratives about success and thriving being an individual aim without others. We don’t need other people, because we are good or safer on our own. The disentanglement from close bonds with people might end up preventing us from receiving the vital necessity of social, emotional and financial support in times of crisis. I recall a conversation with my therapist where she discussed how it is a particular kind of trauma - that a person comes to believe they truly only can face the burden of their problems by themselves.

Relationships at the workplace

The workplace is also a significant place where trauma shows up. It is symbolically and literally, where we derive security, important relationships, expression and meaning from. However, it is also a space precisely because of so, where people deal with stress often dysfunctionally. I’ve watched the most anticapitalist of people become entrepreneurs and crack under financial pressure, having to make decisions that the younger versions of themselves would have despised. Toxic masculinity encourages men to channel pain that can’t be expressed into fight responses, grandiosity and narcissism. Many women, immigrants and marginalized groups become trapped in a fawn response - repeating cycles of appeasement towards the people who assert power over them, for fear of losing their work or immigration status. This prevents them from being able to step up and demand what is fair to them. Conflict is expected and natural during times of stress. But how can we ensure that processes for resilience are there when crisis arrives?

We live in a society that’s misaligned with our best interests, which makes individual goals of thriving and organizational impact to facilitate this difficult. Because even if we all go to therapy, it doesn’t mean the systems around us are facilitating the necessary conditions for us to thrive. And that’s why I think there’s something particularly powerful about framing an experience as a trauma. There are tools, frameworks and principles we can start implementing around us. We can start talking about causation, outcome, response and prevention.

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Trauma-Informed Design: An Ode To Our Transformational Capacity

Alternative economic ideas all have different theories of change for how to disrupt capitalism-as-usual. Some focus on decentralization, limiting or transcending growth. Others focus on wellbeing, localization or creating more equitable policies. In the spirit of experimentation, and the resonance that we need to go deeper, I decided to launch a trauma-informed design perspective to serve as a guide.

The field of trauma research is still relatively new, but researchers such as Gabor Maté, Bessel Van Der Kolk, Thomas Hübl and the tens of thousands of practicing psychotherapists and social workers out there have dived into how to change our responses in life from a fear-driven, self fractured one into an re-empowered and holistic one. What if these principles were applied to the systems and culture around us?

And this is the heart in why I want to explore all of this, because even amidst the darkness, I believe in our transformational capacity as humans. I’ve witnessed it working with migrants and refugees, with close friends of mine who have walked through personal fires and come out alive and strong, and within myself. Trauma-informed care teaches us that the right conditions, tools and factors of resiliency enable this to happen, for us to regain security navigating the world.

Trauma takes away a lot of our agency in decision-making, relationships and outlook towards life. But it is not a death sentence, and we can change. If we really lean into what’s going on. There are fundamental concepts in trauma healing such as safety, agency and community support that can be concretely applied to the new products, systems and institutions we create. In this newsletter, I’ll be exploring exactly how.

“When we design for those who are most vulnerable, we make things safer for all”
- Chayn, nonprofit supporting the healing of survivors of gender-based violence.

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An Invitation to Join Me

As one of my best friends Ellie puts it, this journey of exploration for me is a 'turtle question' - meaning that it is something I'm exploring for the long run. I know that it will take its turns through complicated alleyways and answers that will reveal itself with time, probably leading to more questions. My hope is that you'll come with me on this process, and that this platform becomes a participatory launchpad for even more discussions and mutual discoveries.