Spot Financial Trauma Before It Spirals
Catching unhealthy money habits early can lead to lasting wins
It’s easy to miss warning signs of money stress until debt piles up or savings run dry. The good news: Spotting trouble early makes it easier to recover.
Unhealthy financial habits often appear in subtle ways long before a crisis. From emotional spending to social pressures, catching patterns early helps people take control and avoid a money freefall.
Those battling pressure from every direction can easily suffer from financial trauma, which Rahkim Sabree is primed to diagnose and treat.
Cheer Loud Without Overspending
“Financial trauma isn’t just about money,” said the financial therapist. “It’s about lived experiences, cultural narratives and emotional wounds that shape how we think, feel and act with our finances.”
In his book, “Overcoming Financial Trauma: How to Break Free from Guilt, Build Wealth, and Redefine Success,” Sabree identifies triggers for nervous system dysregulation that result in financial anxiety and financial stress.
He joined experts at Experian, a consumer credit reporting company, to pinpoint ways to head off unhealthy financial behaviors before it’s too late.
Naturally, the keys to prevention are developing healthy financial habits such as sticking to a simple budget. Even just tracking what comes in and goes out helps keep spending in check.
“I’m proud of mindfulness — being mindful of my spending decisions in a world full of noise so I can be intentional instead of reactive,” Sabree said.
Regularly monitoring credit is a powerful habit, according to Experian. It helps to spot and protect against identity theft, and understand how financial behaviors impact credit scores. The company has a free monthly credit monitoring tool.
Small Leaks, Big Stress
Conversely, be aware of unhealthy financial behaviors or spending habits. Watch out for “small leaks” such as impulse buys, late-night online shopping or skipping bill payments. These can quietly snowball into bigger money stress.
“Edward Bernays, the father of public relations and advertising, taught industries how to advertise to your emotions rather than your logic,” Sabree said. “People should be aware they don’t need to spend nearly as much as they are programmed to believe they do.”
Experian says relying on credit for everyday expenses, ignoring bills or impulse spending can quietly lead to debt and financial stress over time.
Overspending patterns show up in everyday life, yet people sometimes don’t recognize them. Overspending can hide in takeout meals, forgotten subscriptions or upgrading gadgets too soon. People often miss this because each purchase feels small.
Bold Budget Moves Shape the Future
“Overspending can show up in response to financial stressors and financial trauma,” Sabree said. “It’s our way of trying to establish safety in our brain. It’s hard to recognize it because the act releases dopamine, which actually feels good to use.”
The down side, as Experian notes, is when overspending feels routine but adds up fast and to strain a budget.
Signs of financial stress can be subtle: avoiding money talks, losing sleep over bills or feeling guilty after spending. These are early warning signals.
“Avoidance behaviors — which tap into our primal ‘flight’ response — may show up as a result of financial stressors, which can look like excessive busyness, avoiding bank and bill balances, and even more spending,” Sabree said.
Experian says that paying attention to these habits early can help those most vulnerable take corrective action.
False Relief, Real Financial Trauma
Emotional spending shows up when shopping feels like stress relief or celebration. It’s a short-term fix but often leaves long-term money regrets.
“Emotional spending — which really constitutes most of our spending — plays a role in creating unhealthy financial behaviors because those emotions are often manipulated keeping people in a dysregulated state,” Sabree said. “A dysregulated person is a profitable one.”
Although emotional spending offers short-term comfort, Experian says it often creates long-term challenges. Recognizing triggers such as stress or boredom can help those afflicted redirect to healthier coping strategies.
An article from Ask Experian has more about emotional spending.
Set Financial Goals That Reflect Values
Denial plays a big role in keeping people from facing their money struggles, making them ignore bills or debt until it piles up. Facing the numbers — writing them down and making a plan — turns fear into action.
“Shame takes the bigger role than denial,” Sabree said. “That shame is often masked as denial, placing the blame on the individuals rather than the systems they navigate. People can overcome that shame by working with trauma-informed financial professionals.”
Those vulnerable to financial trauma face added pressure to “keep up” with friends on social media. The result is spending on vacations, clothes or dinners they can’t afford. Remember: Highlights on social media don’t show real budgets.
“I no longer use the phrase ‘bad money habits,’” Sabree said. “I believe people make the best decision they know how to in a given moment in time, but social pressures absolutely play a role in the experience of financial trauma.”
This is one of six hidden sources of financial trauma he identifies in a Forbes article.
Healing with Accountability Partners
Money habits are easier to change with support. An accountability partner can gently point out blind spots, celebrate wins and help stay on track.
“I strongly believe that the building of community, whatever that looks like to you, can help heal financial trauma and maintain healthy financial habits,” Sabree said. “In fact, polyvagal theory supports this: Humans seek safety among other humans.”
Experian has a Big Financial Friend campaign that shows how powerful it is to team up for better financial health.
Tools like budgeting apps, automatic savings transfers and free credit reports make it easier to spot patterns and course-correct before habits stick.
Sabree’s “Overcoming Financial Trauma” is another tool, available for preorder.
Credit Smarts Start Early
Rather than wait, a healthy habit to start today is to pay yourself first. Even saving a few dollars each paycheck builds a safety net that grows over time.
Experian recommends starting to start building an emergency fund. Even $20 a week could make a big difference. Having savings gives peace of mind and prevents future reliance on credit when unexpected expenses arise.
“Nervous system regulation through intentional breathing and affirmations are free ways to practice mindfulness and build the life of your dreams,” Sabree said. “Note that you can’t just wish for an outcome, you need to work toward it either on your own or in community.”
Healthy money habits don’t require perfection — just awareness and small, steady steps. By noticing patterns, asking for help and addressing the emotional side of money, people can heal financial trauma and build lasting stability.