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Exploring Financial Trauma and Its Impact

Exploring Financial Trauma and Its Impact

| August 02, 2023

Exploring Financial Trauma and Its Impact

Have you ever heard of financial trauma before? If not, it can be an interesting topic to learn about since it impacts many people in various ways – sometimes for a long period, even a lifetime. There are many different potential causes, from, for instance, the loss of a job to bankruptcy. Perhaps most importantly, this type of trauma can adversely affect how one perceives their financial stability and ability to make ends meet. Nearly everyone experiences financial troubles at some point in their life. The question is: have they, in fact, experienced financial trauma and, if so, how can they move past it? Let’s dive right in and learn more.

What is financial trauma?

To put it simply, financial trauma is a type of psychological injury that is usually associated with a person's financial experiences – in other words, things that have happened to them personally or that they have seen happen to someone else. This type of trauma can range from mild anxiety to post-traumatic stress disorder (PTSD) depending on the intensity of the financial mishap and the individual's coping abilities.

What are some common causes of financial trauma?

One might experience financial trauma for many reasons. Some examples include going through a difficult divorce, losing a job, experiencing an investment failure, defaulting on debt, and accruing overwhelming medical expenses. Financial trauma can also occur when an individual encounters unexpected expenses or has trouble earning enough money to care for themselves.

What are some symptoms of financial trauma?

Someone who has experienced financial trauma may show some psychological and emotional symptoms, including a loss of confidence in their financial abilities, low self-esteem, anxiety, depression, stress, and even thoughts of suicide. Financial trauma sometimes makes a person feel like they are out of control and lost.

How can one overcome financial trauma?

It can take time to overcome financial trauma, and it may not be easy, but there are generally ways to manage and cope with it. Experts usually recommend that one starts by recognizing that they have been through some negative financial experiences. Then, once they have acknowledged this, they might want to contact a licensed mental health professional for additional help. Discussing these experiences and emotions with someone else is often beneficial. Additionally, developing new financial planning habits and setting achievable financial goals can usually assist one in regaining control over this part of their life.

Many people experience financial trauma at some point in their lives. This type of trauma can affect not only an individual's financial well-being but also potentially their emotional and physical health. But the more people increase their awareness of financial trauma and identify their own traumatic experiences, the easier it will likely be for them to overcome it with professional help. It is generally possible for people to heal from financial trauma with time, effort, and action. One’s financial and emotional well-being is frequently intertwined, and it’s generally a good idea to take care of both.