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Business News/ Money / Personal Finance/  What is financial trauma? How to deal with it? Know from experts

What is financial trauma? How to deal with it? Know from experts

Financial hardships and losses can have a lasting impact on mental health, causing trauma, stress, anxiety, and even suicide. Financial trauma affects relationships, self-esteem, and decision-making. It is important to talk about financial struggles and seek support to cope with such trauma

Financial hardships can often lead to trauma and impact our spending habits. It often leads to anxiety and even depressionPremium
Financial hardships can often lead to trauma and impact our spending habits. It often leads to anxiety and even depression

Whenever you borrow money or are overburdened with expenses, it’s not just your bank balance that suffers. They also affect your mental health and emotional well-being. Financial hardships and losses can leave a long-lasting impact on the mind and cause trauma and stress.

“Financial trauma can be thought of in two ways. First, it can be thought of as any state of distress that is activated by a difficult relationship with money. Financial trauma also refers to the ways our trauma histories (separate of finances) display themselves through an unhealthy relationship with money," said Meenadchi a faculty member of Trauma of Money.

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“Relationship people have with money and their pattern of spending tells a lot about their childhood and how much their needs were met at that time," explained Dyutima Sharma, clinical psychologist and the co-founder of Orange Owl Percepts. In many cases, scarcity of money leads to anxiety and mental health issues that are termed financial trauma.

“There are two-three ways of financial trauma, one is when you have money and the other is when you lose money. The inability to meet self-set targets of earning money also causes anxiety and trauma. People who are unemployed or under-employed are its biggest victims," said Bhopal-based psychologist Dr Kakoli Roy.

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Impacts of financial trauma

One of the main impacts of financial trauma is inferiority complex. People face emotional hardships because they are unable to get a job or earn as per their expectations.

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Shame and avoidance are another result of financial trauma. People who lose their hard-earned money in business and gambling, often end up being in guilt and not being able to talk about it, said Dr Kakoli Roy. In such cases, people are inclined to alcoholism and drugs as well.

Trauma can also lead to anxiety and panic attacks. One such example was of a young boy who wanted to pursue his music career but could not because of the loss in his father’s business during the COVID pandemic. He ultimately gave up on his dreams to support his family. Slowly his financial hardships started affecting his relationship with friends and partner, recalled Dyutima Sharma.

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Financial trauma also impacts our mind and body and affects our pattern of spending money.  “When our bodies go through roller coaster loops of emotion, without being able to ground and settle, it's an indication that trauma is present," said Meenadchi who has experience in helping individuals with ancestral money trauma. 

She also mentioned some eye-opening questions for self-introspection. "Do you feel an extraordinary urge to buy something and then experience emptiness after the purchase is made? Do you experience enormous stress making a purchase that would significantly improve your life, even though you have more than enough in the bank?" added Meenadchi. 

How to handle financial trauma?

The best way to deal with financial trauma is to talk about it, believes Dr Roy. Another way is to talk to friends and share feelings. No matter how bad you are feeling about yourself for your job, expenses, or anything, it is always a good idea to talk about it.

“If the idea of talking to others is overwhelming or not accessible to you, try writing about your experiences with money in a journal. When we see our beliefs and behaviours with clarity, there's a higher likelihood that we can make gentle changes to improve our lives," suggested Meenadchi.

“If you are not able to achieve what you thought in terms of money, try shifting your focus towards emotional achievement or something else," added Dr Roy.

How much do we talk about financial trauma in India?

Given the extent of importance given to mental health issues in India, healing and even acknowledging financial trauma seems a distant call. At times, people are not even able to identify that they are facing trauma because of money in their daily lives.

“In many cases, people come to us and talk about what's causing them mental stress and emotional hardship. It is only after listening to them that we can figure out the link between money and their trauma," said Dyutima Sharma.

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Published: 23 Jul 2023, 11:06 AM IST
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