Does money ever make you feel anxious, ashamed, or stuck in the same frustrating patterns? You’re not alone. Our relationship with money isn’t just about dollars and cents—it’s shaped by what we tell ourselves. And if those interpretations are rooted in financial trauma, they can keep us trapped in cycles of stress, shame, and self-doubt. But here’s the good news: you can rewrite the narrative.
Reframing—an approach rooted in psychology—helps shift the way we see our financial experiences. By challenging limiting beliefs, we can break free from problem-based thinking and build a healthier, more empowering relationship with money.
Reframing involves identifying and changing the way you view a situation, event, experience, idea, or feeling. It’s a powerful tool to reduce trauma—including financial trauma—and help you live a more fulfilling life. It’s often taught in cognitive behavioral therapy (CBT), a highly effective treatment for trauma and it’s a key element of narrative therapy as well.
While widely used in therapeutic contexts, reframing isn’t limited to any single setting. It’s a practical technique anyone can apply to address financial trauma by identifying and challenging ingrained patterns involving money.
Making this shift enables you to develop a healthier relationship with money and work towards financial stability and well-being. By replacing negative or unhelpful beliefs with more empowering ones, you can overcome the emotional barriers that prevent you from experiencing confidence and ease in the financial dimension of your life.
This post explains the value of reframing and then explores two approaches to it—CBT and narrative theory. Together, they equip you with a rich toolset for healing financial trauma.
Reframing Negative Self-Perceptions
Shifting your perspectives on money and self-image helps you resolve financial trauma by challenging the belief that past or present financial hardship reflects your fundamental worth. Reframing allows you to separate your identity from your financial situation and realize your value and abilities as a person are not defined by your bank account. This fosters a healthier sense of self, crucial for healing the wounds of financial trauma. Reframing your self-perception involves:
- Breaking the link between self-worth and finances: Financial trauma often leads to associating personal value with financial stability. Reframing challenges this unhelpful belief by reminding you that your worth is intrinsic and not dependent on your income or possessions.
- Addressing negative self-talk: When affected by financial trauma, people often engage in self-critical thinking. When an inner voice says, “You’re a failure because you can’t afford this,” the process of reframing helps you identify this message as a distortion and replace it with a more helpful and realistic one, like “This is a temporary setback, not a reflection of my abilities.”
- Focusing on personal strengths: By highlighting your skills, talents, and positive qualities, you can shift your focus away from your financial struggles and onto your personal value and your belief in your financial capability.
While working with a therapist or coach can provide valuable support and guidance in applying these techniques, the principles of reframing can also be powerful self-help tools. Always seek professional support for serious or persistent psychological or financial difficulties.
Whether you’re working with a professional, combining these strategies with other forms of support, or practicing them on your own, the key is to approach the process with patience and self-compassion. The examples and step-by-step processes we’ll explore can be adapted for either professional guidance or self-directed practice, allowing you to choose the approach that best fits your needs, circumstances, and resources.
From Theory to Practice: Reframing Financial Beliefs
Let’s look at how reframing works in a real-life situation:
Job Loss: Daryl’s Story
Daryl came from a low-income family in an under-resourced community. His family’s narrative was that none of them had ever been financially stable and none would be. Daryl wanted to break out of that mold. Straight out of college, he found a job as a social media marketer and was doing well in that role. But in less than a year, his employer decided it would be cheaper to use automation than keep Daryl on staff.
After the shock of losing his job wore off, Daryl searched for new jobs for over a month with no success. Every day, he was plagued by the same thoughts that deepened his pre-existing financial trauma: “Being laid off proves I’m a failure, just as my family predicted. I’ll never recover from this setback.”
A friend noticed changes in Daryl’s mood and suggested he see a career coach. The coach encouraged Daryl to challenge his negative thought patterns. Daryl was able to reframe his view of his situation from proof of failure to proof of resiliency, self-compassion, and a positive attitude. He decided he would now tell himself, “This job loss is a challenging transition that many skilled workers face. My worth isn’t determined by my employment status, and I have valuable skills to offer.”
The shift didn’t work overnight, but soon Daryl noticed his morale was improving. He had the energy and confidence to continue his job hunt until eventually he found a new position.
Practical Strategies for Cognitive Reframing
Because unexpected career disruption is a common source of financial stress and trauma, we’ll continue to use this example. But you can apply the principles to many situations.
Adopting a New Frame After Job Loss: A Step-by-Step Process
- Pause and Notice. When you catch yourself thinking negatively about yourself or your situation, for instance, “I’m a failure because I lost my job,” stop and take a deep breath. Notice where you feel this belief in your body. Tension in your shoulders? Tightness in your chest? This awareness helps interrupt the automatic negative thought pattern.
- Challenge the Original Frame. Ask yourself:
- Is this thought factual or an interpretation?
- What evidence contradicts this belief?
- How would I view this situation if it happened to a friend?
- What factors beyond my control contributed to this situation?
- Practice the New Frame. When you think of a new frame such as “A layoff is a challenging transition many skilled workers face,” reinforce it by:
- Writing down three skills or accomplishments from your career
- Listing two people who you know who bounced back from job loss
- Identifying one opportunity this change might create
- Create Daily Reminders.
- Put a sticky note on your mirror, for example, “This is a transition, not a definition”
- Save an encouraging message on your phone
- Keep your updated skills list where you’ll see it regularly
- Take Aligned Action. Make one small move each day that supports your new frame:
- Update one section of your resume
- Reach out to one professional contact
- Learn about one new industry trend
- Practice one self-care activity
While these cognitive reframing techniques can be powerful on their own, they become even more effective when combined with other approaches to healing financial trauma. Let’s explore how narrative theory offers a complementary perspective on reframing our money stories.
Although reframing is commonly associated with CBT, CBT isn’t the only theoretical framework for challenging negative beliefs and healing from financial trauma. Narrative theory explores how we use stories to understand our experiences, define ourselves, and shape our future. Narrative exposure therapy (NET) is considered to be a proven treatment for trauma that leverages storytelling as a therapeutic tool to process trauma.
While CBT targets negative thought patterns and behaviors by directly challenging them, narrative theory centers on helping you reframe your life stories and identities by exploring the narratives you hold about yourself. This allows you to create more empowering stories instead of focusing solely on symptoms or thoughts. Even though their approaches are different, both CBT and narrative theory help you become more self-aware and open to viewing your situation from a different perspective.
One powerful way to apply these narrative principles to financial healing is by examining and consciously reshaping your personal money story. Understanding how to rewrite this core narrative can help you move from reframing negative thoughts to integrating these new perspectives in the broader context of a life story.
Rewriting Your Money Story
In this post, money story refers to your personal history with money—the experiences, behaviors, and patterns that have shaped your financial journey. This is different from a money script, which consists mainly of unconscious beliefs about money, often formed in childhood, that influence how you think and feel about finances. While money scripts are a part of your money story, your money story encompasses the broader narrative of your financial life.
Creating a new money story involves shifting old narratives that keep you stuck and integrating them into your life in a helpful and empowering way. For instance, stories of financial abuse in a relationship can portray one person’s cruelty and your resilience, and not reflect on your financial capability or self-worth. Narrative reframing allows you to move from a limiting story to a more hopeful one.
Now let’s look at another extended real-world example of how reframing a story might look, this time from the perspective of narrative theory:
Financial Scarcity: Luisa’s Story
Luisa grew up in an immigrant family where her parents worked multiple jobs to make ends meet. The story she internalized was that “money always leaves as soon as it comes,” and “financial security isn’t for people like us.” After getting her nursing degree, Luisa started building her savings, but then her mother became ill. Luisa spent her entire savings and took on significant debt to help with medical bills.
This experience reinforced her childhood narrative about money: “This proves what I’ve always known—that I’m destined to struggle financially like my parents did. Whenever I get ahead, something will always pull me back down.”
A friend recommended a therapist who used narrative therapy. The therapist and Luisa explored Luisa’s “money story.” She helped Luisa externalize her financial beliefs by naming them “The Scarcity Story.” This simple act helped Luisa see these beliefs as something separate from her identity rather than an unchangeable truth about herself.
Through their sessions, Luisa uncovered “unique outcomes”—times when her experience contradicted The Scarcity Story. She remembered how she’d paid her living expenses through nursing school while working part-time, managing her money carefully. She recalled how her parents, despite their ongoing financial setbacks, had sent three children to college. These memories helped her see that her family’s story wasn’t just about struggle, but also about resourcefulness and determination.
Luisa began rewriting her narrative from “Money always leaves” to “I come from a line of resilient people who know how to rebuild.” She started seeing her decision to help her mother not as proof of inevitable financial struggle, but as evidence of her ability to make difficult financial choices aligned with her values.
Practical Strategies for Narrative Reframing
Financial trauma often embeds itself in the stories we tell about ourselves and our relationship with money. Using narrative reframing, we can examine these stories, understand their origins, and create new narratives that better serve our present and future.
Narrative reframing involves breaking down a potentially overwhelming story into smaller, more manageable parts. Working with smaller parts enables you to better understand the impact of the trauma and ultimately work towards creating a more empowering narrative about your experiences. This process helps to lessen the feeling of being completely defined by the traumatic event.
While this process can be done with a therapist, many people find they can begin reshaping their money stories on their own using structured exercises and reflection. Let’s explore how this works in practice.
Applying Narrative Reframing for Financial Trauma: A Step-by-Step Process
- Tell Your Story. You start by simply telling your story. Explore how the problem developed over time, identifying significant events or situations that may have contributed to its emergence. As time goes on, through narrative reframing, you’ll retell your story in a new way that reinterprets your experiences and brings you less distress.
- Separate from the Problem. When you externalize a problem, it can be easier to understand and address your challenges without feeling overwhelmed by self-blame or negative self-perception. Start by giving your problem a name, for instance, The Storm. Ask yourself:
- How does The Storm show up and affect my beliefs about my financial future?
- How does The Storm try to keep me stuck in my current patterns?
- Map Your Story’s Influence. Explore how your narrative has shaped your financial decisions and self-image by:
- Writing down three ways this story has influenced your financial choices
- Identifying three reactions you’ve had to the story, for instance, shame, worthlessness, inadequacy, or a perception of yourself as incapable or irresponsible
- Noting one dream or goal you’ve hesitated to pursue because of this story
- Discover Unique Outcomes (exceptions to the story). Look for moments that don’t fit your dominant narrative and that offer a glimpse of a more positive possibility:
- Remember a time when you managed money differently than your story would predict
- List three examples of financial resilience in your personal or family history
- Identify one financial skill you’ve developed despite the challenging narrative
- Create Your Preferred Story. Build a new narrative that better serves you by:
- Writing a letter from your future self describing how you overcame your challenge
- Documenting small daily moments that support your new story
- Identifying people in your life who can witness or support your emerging narrative
- Document Your New Narrative. Write down your revised money story in detail:
- Break down your financial journey into key chapters or moments
- Highlight times of resilience and growth
- Include your strengths and learned wisdom
- Focus on how past challenges helped build your character
- Describe your emerging financial identity
- Take Story-Aligned Action. Make choices that reinforce your new narrative:
- Take one small financial action that contradicts your old story
- If it feels right, create a ritual to honor your financial ancestors while choosing a different path
- Document one way you’re breaking old patterns each week
Instead of just challenging negative thoughts like CBT does, this narrative approach helps you understand the broader context of your financial beliefs and actively create a new story. The process acknowledges your history while empowering you to write a different future. You shift your perspective from a potentially negative or limiting narrative about yourself to a more balanced and hopeful one. This shift impacts your self-worth and behavior patterns.
In essence, narrative reframing breaks down the unhelpful story surrounding the financial trauma and actively creates a new, more positive perspective to replace it.
Having an understanding of both CBT and narrative approaches equips you with a richer set of tools for healing financial trauma. CBT helps you identify and challenge specific experiences and thoughts (like Daryl’s “I’m a failure because I lost my job”). Narrative theory allows you to examine and reshape the larger stories that gave rise to those thoughts (like Luisa’s “inheritance of struggle” narrative). Together, these approaches address both the immediate negative thoughts and the deeper narratives that sustain them.
Moving Forward
Remember that healing from financial trauma is a personal journey. While professional support can be invaluable, many of these reframing tools can be effectively practiced on your own or combined with other forms of support. The key is finding an approach that feels sustainable and supportive for your unique situation.
While reframing is foundational to healing, financial trauma also has emotional and even physical effects. That’s why combining reframing with a wide range of other healing tools can be especially effective. The goal is to move forward with confidence and build a healthier relationship with money. Healing is a journey, and extending kindness to yourself along the way makes all the difference.
Having examined your past experiences, recognized their impact, and begun to reframe limiting beliefs, you’re ready for the next steps in your healing journey. Our next post focuses on psychotherapeutic tools for healing from financial trauma.
Key Takeaways
- Financial trauma isn’t just about money—it’s about what we tell ourselves and how these messages and stories shape our financial behaviors and beliefs
- Reframing is a powerful tool that can help heal financial trauma by changing both our thought patterns and our deeper narratives about money
- Cognitive reframing helps challenge specific negative thoughts, while narrative reframing helps reshape the broader stories that influence our relationship with money
- Small, consistent actions that align with our new frame or story help reinforce positive changes and build financial confidence over time
- Healing from financial trauma is a personal journey that can be approached through self-help techniques, professional support, or a combination of both
This post is part of a series that combines insights from neuroscience, psychology, social work, and holism to increase awareness about financial trauma. Whether you’re looking to better understand the situation of a friend, loved one, client or yourself—or whether you’re simply curious— you’ll find valuable insights and practical strategies throughout these articles. For a listing of these articles and convenient links to them, visit our series hub.
Start or Join a Conversation
Thanks so much for your dedication to learning about reframing limiting beliefs to heal the wounds of financial trauma.
Many different perspectives are possible about this topic. Your thoughts are key to this community. Please share them here. If you don’t already have an opinion at the top of your mind, consider sharing your views on one of these points:
- Whose story resonates more with you—Daryl’s or Luisa’s? What about that story do you connect with?
- Think of a time when you successfully reframed a challenging financial situation. What helped you shift your perspective, and what positive changes resulted from this new way of thinking?
Notice
This post is for educational purposes only and is not legal, medical, psychological, financial, or any other type of professional advice. The content reflects personal insights and general strategies, not clinical diagnostic or treatment recommendations. Individual experiences with financial stress vary, and what works for one person may not work for another. Always seek professional support for serious or persistent psychological or financial difficulties.
Please understand that facts and views change over time. Posts reflect the author’s understanding at the time of writing, as well as the perspectives of external sources for this post. While maintained for your information, archived posts may not reflect current conditions.