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Minority Entrepreneurs Face More Economic Disparities — and More Money Trauma. Here's How to Stop the Silent Struggle With Financial PTSD. Also called "financial PTSD," it affects many entrepreneurs, especially in Black and brown communities where we have added layers of economic disparity. The good news is that here is the exact way you can overcome it.

By Alejandra Rojas Edited by Kara McIntyre

Key Takeaways

  • Financial trauma, including generational patterns and systemic barriers, hinders the financial growth of many minority entrepreneurs.
  • Recognizing and overcoming the psychological aspects of financial decisions, such as fear and imposter syndrome, is key to growth.
  • Turning cultural heritage and identity into strengths can dismantle financial trauma, leading to successful entrepreneurship.

Opinions expressed by Entrepreneur contributors are their own.

Let's not sugar-coat it: To figure out a straight path to financial growth can be challenging for any entrepreneur, but for Latina, Latino, Black and other minority entrepreneurs, the bumpy road often runs deeper than just numbers to run or a math equation to solve.

For many, how they feel daily makes them have seatbacks or get into loops they don't want to be in with money and financial decisions. This type of feeling has an origin in what is called financial trauma, sometimes referred to as "financial PTSD," and it goes beyond just a direct negative financial experience or the possible money struggles you've witnessed within your family or community. It also comes from those generational patterns passed down from our ancestors, in addition to many systemic barriers that have set us apart from quickly creating a path that leads to financial success.

Just consider that women in the U.S. gained full economic participation rights in the early 20th century, and the 1960s marked the era when women could open bank accounts without a male co-signer. Economic freedom for many minorities came even later, around the 1970s and 1980s, when financial institutions were pushed to offer more inclusive services after the Equal Credit Opportunity Act of 1974 was passed.

Yet, to this day, some narratives persist, shaping what we refer to as a systematic and generational financial trauma:

1. Fear of not having enough
2. Fear of not having someone to provide
3. Fear of the unknown

If you find yourself stuck in your financial growth, it's time to explore the less traveled path that brings the most financial results and examine how financial trauma could hold you back. I'll outline three ways financial trauma may affect your progress and provide practical steps to overcome these barriers.

Related: Are Your Subconscious Money Habits Killing Your Business Growth? Here's How to Fix Them Now

Limited perception of opportunities

In other words, your ability to play the entrepreneurial game of creating and finding opportunities to grow every day is just not there. You can't see outside of your current situation, no matter what.

Financial trauma can narrow one's perspective, making it challenging to seek possible solutions or opportunities that could lead to the next step.

How it may be showing up in your growth:

You may unconsciously believe that certain opportunities are "not for people like me," or you might be too focused on managing immediate financial stress to recognize new possibilities; after all, that is the first trauma effect that keeps you in a fight or flight response.

You also might hesitate to pursue new business ventures, fearing failure before you even begin. Or perhaps you're underpricing your products or services, convinced that higher prices will drive customers away. When did you last open your bank account and track your expenses?

How to overcome it:

Acknowledge the emotions you feel when you realize you're stuck at any point in your financial growth. If fear or anxiety is holding you back, try separating the emotion from the situation. Visualize the scenario as if it's happening to someone else, and remove the power that fear has over your decisions. This can help you see opportunities more clearly and take steps toward growth.

Related: Could Entrepreneurship Be a Trauma Response? 5 Ways Our Emotional Past Manifests in Leadership

Anxiety and stress are driving your financial decisions

When financial trauma is present, anxiety and stress can take control over the situation, leading to decisions based on fear rather than strategy and vision.

This is particularly damaging for you as a Latina or Latino entrepreneur, so much so that I address it as the first part of my financial growth framework by bringing and highlighting the importance of a big vision and having control over your north. For us, linking our big vision clearly and not blurred by anxiety or stress to our financial growth will help us overcome cultural, family and social dynamics that keep us anchored on looking only for the money to make ends meet. And isn't that the whole point?

How it may be showing up:

You may frequently second-guess yourself, making decisions based on short-term safety rather than what's best for your business and what aligns with where you want to take your business and your life with it in the next few years. You might also constantly stress about cash flow, preventing you from making strategic moves that could benefit your business.

How to overcome it:

It's essential to seek support to get past these emotions in a context where the support understands their connection to your financial journey.

When you feel overwhelmed, pause and take a step back. A financial plan with detailed scenarios for how you would like to act outside of the emotion is also beneficial.

Related: How to Overcome Organizational Trauma — 4 Strategies for Post-Crisis Resilience and Growth

Avoiding the conversation because of money

Avoiding the conversation about or around money often happens when imposter syndrome kicks in, especially when it's linked to financial trauma. While many experience imposter syndrome when running a business — seeing opportunities but doubting if you're worthy — it's a different story when finances are involved.

For Latina or Latino entrepreneurs, there's often a subtle or not-so-subtle clash between how we want to show up in the world and the financial identity often tied to our heritage, which also has created a subconscious expectation that transforms later on in part of our financial identity. This creates the perfect storm for imposter syndrome to take over, making it more challenging to align with your vision and push your financial growth.

How to overcome it:

Building on what I've already shared, this extra layer of imposter syndrome tied to financial trauma can be unraveled by recognizing how your identity, heritage and culture are part of why you're on this journey and have this vision. Instead of seeing these aspects as they've been portrayed to us, it's time to embrace them as strengths in your business and turn them into your driving force.

If you could answer this question today: How have your heritage and identity contributed to the success you've had so far? That answer is what will start breaking down the barriers in your way.

Alejandra Rojas

Entrepreneur Leadership Network® Contributor

Trauma -Informed Finance Professional

Alejandra Rojas is an entrepreneur, finance expert and founder of The Money Mindset Hub, a financial education platform for female entrepreneurs. She hosts "The Money Mindset Show" and is dedicated to helping entrepreneurs achieve financial growth and independence.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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