Struggling to kick a bad financial habit? It could all stem from childhood, experts say
Shame, secrecy and stress often form earliest financial memories and have ripple effects later on
Jessica Moorhouse remembers stealing a gumball from the bulk food section at the grocery store as a kid. Having seen adults take "samples" from the bulk bins before, she thought it was no big deal.
Her mom scolded her when she found out what her daughter had done. But Moorhouse says the way her mom did it conveyed a second message — that stealing could make others think they didn't have money to pay for the candy. Even though she was just a child, Moorhouse came away with the perception that there was something negative about not having money.
"She also kind of made me feel that … that's shameful because we don't want to look poor," Moorhouse, a Toronto-based financial educator and host of the More Money podcast, told The Current's guest host Rebecca Zandbergen. "I've carried that since," she said.
Moorhouse knows she isn't alone. The financial educator and counselor says, more often than not, those who have enough money to make ends meet but still struggle to improve their finances are often stuck in habits they picked up in early life. Fixing those financial problems that linger from childhood is a focus in her new book, Everything But Money.
"A lot of the people I deal with … they're doing the work to educate themselves so they can improve their financial lives, but they still don't know why they're overspending or they're, you know, getting into more debt or they're terrified to invest," Moorhouse said.
"And so in order to get those answers and then find solutions, you do have to kind of figure out … where did these things all start? And they all start in childhood."
Shame, secrecy often tied to money
Megan McCoy, a certified financial therapist and assistant professor at Kansas State University in Manhattan, Kansas, agrees that childhood can explain a lot of folks' financial habits.
"Money is the object in which we project our deepest hopes, fears and dreams onto," McCoy said. "So when we watch our loved ones using money as a tool of power, a tool of control, a tool of secrecy, a tool of sadness and stress, it's hard for us as kids to kind of put a meaning to it that is appropriate."
Just as one's choice in romantic partner and other formative events in early adulthood can affect future financial behaviours, research shows the same is true of one's upbringing.
Moorhouse says shame around money is one of the most common feelings her clients report — same as she felt that day with the gumball.
The experience left her feeling like "money [had] more control over me instead of the reverse," Moorhouse said. She began to fear that one day she might not be able to make ends meet, and says there are still times she struggles to spend on herself.
Natasha Knox, founder of Alaphia Financial Wellness in Vancouver, says financial secrecy is another common problem that has its roots in family patterns. The behaviour is often picked up when a child is told by one parent not to tell the other parent about items they bought while shopping together, or to lie about the total amount spent. Those kids often grow up to hide purchases from their own partners later in life, says Knox, who was also 2024 Conference Chair with the Financial Therapy Association.
She says children might take away different lessons from the same situation, too. For example, if two siblings grow up watching their parents overspend, one might become hypervigilant about money, while the other repeats their parent's pattern.
The experiences aren't always connected to money, either. Traumatic events in childhood, like domestic violence or parental substance abuse, have also been shown to negatively impact people's financial futures.
How to fix your financial habits
McCoy says many people experience moments of financial stress when they're changing jobs or around the holidays, for example. But if financial anxiety is constant, it might be a sign there's a pattern from childhood that needs to be unpacked.
The field of financial therapy — which McCoy says was born out of the 2008 financial crisis and has been growing in popularity ever since — can offer help. Working with a certified financial therapist might help put an end to problem money habits, she says.
But for those looking to explore these patterns on their own, McCoy recommends drawing out your family tree. By considering how money flowed through it — who earned it, who was in control of it, and how it created tension — she says you can unearth the roots of your underlying financial beliefs.
Moorhouse also recommends getting to the bottom of your financial attitudes. In her new book, she encourages readers to consider their first memory about money.
"When we connect our feelings with money and start at that … origin point, we can then start making connections on how do we feel about money today and how are those feelings dictating our decisions," Moorhouse said.
Knox says many of the solutions she recommends to her clients are the same as those used in traditional therapy. "Money is just the topic," she said.
Many problem financial behaviours are tied to a basic need — like esteem, connection or security — that's not being properly fulfilled, she says. Finding and properly addressing that need can help reduce desire to engage in the problem money behaviour, according to Knox.
Taking notice of what's happening in your body when you do hide a purchase or splurge on a big-ticket item can also be helpful in breaking the pattern, she says.
"What's happening? Like, what was the trigger? What's your current state, are you hungry, tired?" Knox said. That awareness can help folks to realize the pattern and put a stop to it, she says.
And for those making financial goals part of their New Year's resolutions — especially for those who have struggled to achieve them in the past — Moorhouse says setting the same targets you're failed to reach before will likely only repeat the cycle. Instead of making your goal to earn a certain dollar figure or reach a specific net worth in 2025, striving for a better, more mindful relationship with money might be more practical and helpful, she says.
ABOUT THE AUTHOR
Interview with Jessica Moorhouse produced by Joana Draghici