Financial Trauma: Recognizing its Signs, Impact, and How to Deal With It
Let’s start with the truth – money matters. Whether we want it or not, the ups and downs of our life affect the flow of our finances too. What happens to our finances leaves an impact on how we make decisions, choose opportunities, and ultimately how stress-free we live. Yet, what happens when finances become too entwined with our everyday lives and well-being? What happens when money becomes our source of stress, anxiety, and distress?
That’s the sad reality of financial trauma also known as financial PTSD. This type of trauma might not be an official diagnosis, but that doesn’t mean that it can’t leave a long-lasting impact on our mental and emotional well-being.
Just like any other form of trauma, financial trauma can leave deep wounds that can not only affect your present but your future as well. So, let’s address financial trauma as well, how it manifests itself, what it looks like, what causes it, and more importantly, how to deal with financial trauma and seek help when needed.
Financial Trauma or Financial PTSD: What is It?
Financial trauma, also known as financial PTSD at times, is a psychological response to extreme financial stress, crises, and setbacks that we all face in our lives. It’s a condition where you experience intense and strong emotions, anxiety, and even relive traumatic memories related to past traumatic financial losses.
This subtype of trauma can be triggered by various events and financial struggles such as bankruptcy, job loss, overwhelming debt, and even financial instability.
The symptoms of financial trauma can be similar to symptoms of PTSD. You can experience physical symptoms such as nervousness, insomnia, anxiety, depression, negative thoughts, and even despair related to your financial status. Eventually, these financial trauma symptoms can make it harder to focus on work or home life.
So, What are the Symptoms of Financial Trauma?
Other than the symptoms of post-traumatic stress, you might experience symptoms such as;
- Constant anxiety related to money
- Experiencing flashbacks related to past financial crises
- Avoiding talking about finances
- Withdrawing from social activities
- Experiencing hypervigilance
- Experiencing sleep troubles
- Engaging in self-destructive behaviors
- Experiencing somatic symptoms
- Engaging in obsessive behaviors concerning money
What Does Financial Trauma Look Like?
You can look out for the symptoms of financial trauma but like other types of trauma, financial trauma can manifest differently. Here’s how you can see how financial trauma manifests itself in your behaviors;
- You experience financial dependency. You begin to rely on others for your financial needs.
- You begin to engage in compulsive behaviors such as overspending and compulsive shopping which can also turn into a shopping addiction.
- You might even begin to spend thriftily because you feel anxiety when it comes to your finances. You might begin to spend frugally or experience misery because you refuse to spend what you need.
- You might begin to work overtime and excessively to avoid financial trauma and debt.
- You find it difficult to set financial goals and boundaries in your relationship and at work as well. It can result in codependent behaviors.
- You develop a scarcity mindset where you believe that there are not enough resources. You might begin to hoard things or become anxious about little things concerning money.
The Causes of Financial Trauma
Financial trauma can be triggered by numerous events or situations. Some of the potential causes of financial trauma or PTSD can include;
1. Facing Sudden Job Loss
If you’re facing a sudden job loss or unemployment, then it can lead to financial trauma and instability. You might experience heightened anxiety and stress responses related to finances as well.
2. Going Bankrupt
If there is a loss of assets or financial security, then this event can also trigger financial trauma or stress. It can be difficult to come to terms with losing your financial security and this can leave you feeling distressed.
3. An Overload of Debt
If you have accumulated excessive debt or credit, then you might begin to feel trapped under the pressure, resulting in financial stress, anxiety, and even trauma.
4. Economic Crises
If you’re faced with sudden economic crises worldwide, then this event can also be enough to trigger your financial trauma even if you’ve already recovered your finances.
5. History of Financial Trauma
Growing up in a household where finances were always the biggest concern can also affect your financial trauma. If you’ve grown up listening to or experiencing financial instability, then the smallest threat to your financial security can trigger your trauma.
The Impact of Financial Trauma on Your Present and the Future
Financial trauma can have lasting effects on your life and well-being. It can cause emotional distress and trigger anxiety, and depression, and even lead to the development of chronic stress. Moreover, if the money issue persists, then it can put a strain on your relationships with your loved ones as all you would be able to think about would be your finances.
Not feeling financially secure can also affect your ability to make smart decisions and rational financial choices. You might engage in risky behaviors or impulsive actions that might affect your financial stability.
If your financial trauma is unaddressed, then in the future, it can make it harder to plan and manage finances. Because of the stress and worry about finances, you might resort to substance use that can develop into an addiction if not careful.
Eventually, chronic stress can wear you down – mind and body – causing health issues such as poor heart, diabetes, high blood pressure, anxiety disorders, and more. It can also affect your cognitive abilities as well resulting in poor performance at work, reduced productivity, and an increased risk of accidents.
How to Deal With Financial Trauma?
With the right help and strategies, you can learn to cope and deal with financial trauma. Here are some tips to help you manage financial trauma;
1. Create a Budget
You can cope with financial trauma and stress by creating a realistic and healthy budget to regain your financial control. Having and sticking to your budget can make you feel in control of your finances and stop you from spiraling out of control when it comes to your financial worries.
2. Gain Financial Education
You can also become self-aware by learning about financial management and planning. Once you know how your finances can be managed so that you don’t fall into debt or other financial crises, it can make it easier for you to let go of financial worries.
3. Create a Support System
You can also create a support system of trusted friends and family to lean on when you need emotional support to deal with financial trauma and worries. Your support system can help you feel in control of your emotions and help you when you need support of any kind.
4. Practice Mindfulness
You can also learn to let go of stress that persists with the help of mindfulness activities. You can also practice meditation and other relaxation techniques to let go of stress. This will help you reduce the risk of chronic stress that might come from financial trauma.
5. Set Healthy Goals
Another way to deal with financial trauma is to set healthy and realistic financial goals for the future. If you want, then you can also break down your goals into smaller chunks so that they are easier to manage and achieve.
6. Take Care of Yourself
Among other things, don’t forget to take care of yourself. Prioritize your physical and emotional well-being. Avoid isolating yourself. Try to engage in social activities and maintain social relationships too. Taking care of yourself – mind and body – is as important as taking care of your finances.
Seeking Professional Help…
If you find that your financial trauma is impacting your day-to-day life and well-being, then don’t hesitate to reach out to a professional. You can seek out financial advice or even mental health advice to calm your financial worries. A counselor or a therapist can help you understand the cause of your trauma and teach you ways to cope with it.
They can also offer support groups and online resources that you can reach out to if and when you need financial help and guidance.
Financial trauma is a challenging, if underrated, condition. With the right strategies and support, you can learn to regain control of your financial condition and the emotional well-being that is associated with your finances.
I hope this blog will help you recognize the signs of financial trauma and ways you can deal with financial trauma or PTSD. Let me know what you think about this article in the comments box below.