- Twenty-five percent of Americans experience trauma symptoms from financial stress.
- Family beliefs about money and financial traumas often impact one's financial story.
- Using strategies from cognitive behavioral therapy and applying mindfulness to finance can increase one's wealth.
The pandemic has caused a global mental health and financial crisis. Even before the pandemic, 23 percent of adults and 36 percent of millennials experienced financial stress at levels that qualify for a diagnosis of post-traumatic stress disorder (PTSD).1 Not having enough money keeps our physiology amped up nearly all the time. Without the chance to recover, long-term stress releases hormones that can wear down the mind and body, causing psychiatric problems, diabetes, heart disease, and other health concerns.2
A foreclosure, stock market crash, lawsuit or divorce, an unexpected tax bill, business loss, or unemployment all can be traumatic financial losses. The term financial PTSD, not an official psychiatric diagnosis, is often used to describe PTSD-like symptoms triggered by financially disruptive experiences. This includes an array of emotional, cognitive, and physical difficulties in attempting to cope with either abrupt financial loss or the chronic stress of having inadequate financial resources.
Physical symptoms include nervousness, jitters, insomnia, or a startle response to bank alerts or phone calls that could be from debt collectors. Emotionally, we might not be able to feel close to others as we experience apathy, anxiety, depression, hopelessness, or despair. Meanwhile, persistent negative thoughts about finances may make it difficult to concentrate. These symptoms disrupt home and/or work life and cause significant distress.3
I’ve had my share of financial struggles. During the economic crisis of 2008, I had crippling financial anxiety that included panic attacks and insomnia. I had maxed out all my personal credit to keep my counseling group practice, Urban Balance, afloat. I laid awake at night worrying how I would pay my rent and staff. I was sure I would end up filing for bankruptcy.
To save myself, I applied mental health strategies I learned through my own therapeutic practice to improve my emotional wellbeing and financial health. And it worked. In 2017, I sold my practice for several million dollars—something I never dreamed possible until I expanded my thinking.
In my practice, I’ve helped countless clients recover from financial trauma and improve their mental and financial health using the following strategies:
1. Honor your financial traumas that have shaped your relationship with money. Practice self-compassion as you recognize how the past has impacted how you handle money. Using a multicultural lens, consider how your financial experiences may have been impacted by systemic racism, discrimination, or marginalization. Think about how your family’s beliefs about money and financial experiences have shaped your own.
2. Remember that you are not only the protagonist of your money story. You can also be the author. By taking responsibility, you can flip the scene and rewrite the script. Empower yourself to create positive change in your life by shifting your locus of control from external to internal.
- Separate from the harmful aspects of ego. You are not your financial problems. Know that self-worth is internal, not external (title, possessions, bank account). You are innately worthy.
- Cultivate presence to stop second-guessing the past or worrying about the future. You can be responsive rather than reactive in financial actions and planning when you are grounded in the here and now.
- Practice healthy detachment (mindful separation from negative emotion) to weather the storms, zoom out for greater perspective, and forge ahead with resilience.
- Adopt a growth mindset; reframe setbacks or failures as a learning opportunity.
4. Be assertive and set healthy financial boundaries. Negotiate and advocate for yourself, personally, professionally, and financially. Renowned author Suze Orman noticed this same correlation through her work as a financial advisor and said, “Lasting net worth comes only when you have a healthy and strong sense of self-worth.”4 Cultivate healthy self-esteem and operate in the world in a way that welcomes prosperity.
5. Cultivate expansive, creative, and open-minded thinking so you see past roadblocks to financial success and focus on opportunities, possibilities, and solutions. Cognitive-behavioral therapy (CBT) can help you become more aware of and change your negative thought patterns—or in simpler terms, stop your stinkin’ thinkin’. Identify and change negative thinking patterns to make your thoughts more neutral or positive by using thought records or diaries. Emancipate yourself from self-limitation and negative, fear-based, and catastrophic thinking. Identify and restructure irrational and negative beliefs about money.
6. Break through the barriers of shame, fear, and pride. Talk to others if you are struggling as financial anxiety breeds in isolation. You are not alone. These challenging times have impacted almost everyone. Help is available. Talking about your problems with friends, family, and/or professional therapists can lead to better problem-solving and more assistance, resources, and opportunities. Reach out to a financial advisor, personal banker, or Consumer Credit Counseling Service to get help with budgeting, debt consolidation, and investment opportunities.
Free yourself from the shame, angst, and stigma that come with financial struggle as you use these strategies. Get ready to feel inspired, empowered, and equipped to improve your mental and financial health and resilience.
To find a therapist, please visit the Psychology Today Therapy Directory.
4. Suze Orman, Women & Money: Owning the Power to Control Your Destiny (New York: Spiegel & Grau, 2010), 16.