Struggling with Money? Know the 2 underlying issues

by Jennifer Richardson

struggling with money

“I am responsible with money!”

Have you ever had to defend yourself against criticism from others about the way you manage your money? Perhaps a family member, friend or colleague has questioned your spending habits or ability to cope with your finances.

Do you feel they are being unfair? Is it possible they have a point?

If you are struggling with money, one area to consider is the possible effect of trauma on decision-making and personal finances.

Struggling with Money? Might be A Consequence of Trauma

If you notice the media headlines recently, there appears to be increased awareness of the psychological, physiological and social impacts of suffering from a traumatic event or sustained exposure to trauma.

Increased understanding of trauma is a positive development, yet many people remain unaware of the consequences of suffering a traumatic experience because the effects can be ‘invisible.’ [1].

It is easy to underestimate an invisible source of trouble in your life. So imagine the potential consequences of suffering “alterations to cognitive processes such as memory, attention, planning and problems solving.” [2].

These skills are usually required to successfully tackle many areas of life, not least of which is your money. How can you budget successfully with impaired abilities in planning and problem-solving?

Without knowledge of how trauma can affect people, it is easy to see that cognitive impairments could severely interfere with financial management and decision-making. You may be simply unaware of the decisions you are making. 

The Scale of the Problem: Financial PTSD

Trauma has been described as a “silent epidemic” and may affect up to 70% of the American population [3].

Millions of people globally have been diagnosed with PTSD (Post Traumatic Stress Disorder), and more people possibly are unaware they have it. Lack of awareness and treatment options means many people will be affected by something that can impact every part of their life. Expensive mental health services make it even worse for sufferers.

Coping Mechanism for sufferers

So what could financial behavior look like for someone who has suffered from past trauma? 

Consider behaviours that could be coping mechanisms for sufferers. Spending excessively on alcohol, food, tobacco and shopping sprees may be caused by impairments in the brain from trauma. “A messy personal financial scene, as well as debt, are common features in trauma-affected people.” (4).

So, if you wonder is spending too much money a trauma response or your coping mechanism?” Yes, it can be.

To cope with undiagnosed trauma, people may appear to be indulging in a way that looks “reckless” to others.

The result of this damage from trauma is that behaviours that appear to others as “irresponsible” may be caused by real physiological and psychological damage. 

Judgements about your spending habits from others may be harsh and unfair. And without the knowledge of the effects of trauma, the judgement from yourself may also result in unnecessary guilt and shame. It can be hard to convince family and friends that you are not lazy, irresponsible or careless – there could be something deeper going on.

What Can You do?

There are several courses of action for those who feel they might need help with their money management.

1. Firstly, if you think you may have an impairment that is keeping you from managing your money, you can seek the assistance of a trained therapist. A professional may be able to identify hidden issues and suggest better strategies for you to cope in your daily life.

2. If you live in an area with limited resources or you are restricted due to finances, you can try an NGO in your area that may be able to point you in the right direction.

3. Additionally, learning about budgeting may build skills in an area often neglected in schools and families. You can adopt it as a hobby in your 20s.

4. You can try a finance expert or self-learning on the internet if your finances do not extend to professional guidance.

struggling with money

5. Many online resources And apps can help you to start tracking your spending.

It can be fun to learn new skills and finally control your money and spending. Unfortunately, trauma and money is not the most popular topic for conversation. So, to cope with past trauma and money-struggles are not easy but with increased awareness, you may be able to gain some control over your life.

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