Can you believe we are days away from coming to the end of the first quarter of 2022, how time flies! Permit us to ask, how has it been, or do we say how is it going? Do you think you have fared well? The trick is to keep at it, evaluate how you have managed your financial affairs for the first quarter of the year and see what you need to do differently. As a matter of fact, I think any one desiring of financial wellness will be reviewing their financial plan especially with the rising costs, increased inflation and what have you.
Today, we will be initiating the conversation around Financial Traumas. What it means, what we need to do to heal from it and how to ensure we do not suffer a relapse. So, let us break down the words.
What is trauma? The Oxford dictionary defines trauma as a deeply distressing or disturbing experience’. So how then do we come about the term financial trauma, well we will tell you what that means too; just in case you are wondering. But first, let us consider the words of Dr Galen Buckwater: a research psychologist who in studying our relationships to money has defined financial trauma as “the physical, emotional and cognitive deficits people experience when they cannot cope with either abrupt financial loss or the chronic stress of having inadequate financial resources” (please note that there is an emphasis on the word ‘chronic’ as this suggest that one has been experiencing the stress over finances over a long period of time).
Before we go on to talk about what causes financial trauma; it is important to know that the subject of money and finance while quite delicate, requires having the right knowledge to achieve financial wellness. A solid structure cannot be built on a shaky foundation; it will crumble so also does the rule apply to our ability to achieve financial wellness. It is almost impossible to find a large number of people who have never experienced financial trauma and the truth is because trauma is such a deeply personal thing, especially when it comes to financial trauma, we are often left broken from that experience that it automatically triggers responses which could have short- or long-term repercussions without even trying so hard. So, the question is what are the causes leading to financial trauma? Mentioned below are some of the causes, and it is however not limited to these mentioned as it could be relative and peculiar to the individual:
- The sudden loss of a job
- Burdended with a debt
- Inheriting toxic belief systems
- Low income jobs
- Unstable income
- Illness or disability
- Failed businesses
- Cultural and Spiritual biases
A study recently showed that 23% of adults and 36% of millennials experienced financial stress at levels that qualify as a diagnosis of post traumatic stress disorder. This is especially true with the economic situation and COVID19 pandemic in a country like Nigeria. The devastating effects on people with the loss of jobs, businesses and unpaid bills are critical burdens that have become major traumas.
What then can be done? This goes back to one of the articles we had shared about understanding belief systems and how it impacts on your finances. Here is a truth, almost everything most of us know are rooted in shared knowledge and experience from our parents, grandparents and guardians. A few have been lucky enough to unlearn and relearn healthy financial habits; but there are many of us whose belief systems are rooted in the traumas our first money influencers have passed on to us and this automatically means we are building skyscrapers on a foundation that should ideally carry a 3 storey- building.
It is therefore important to understand that your first priority to lay sustainable building blocks that will at the very least guarantee that you achieve financial wellness is to do a critical assessment of your belief systems, Click here to take the test. Your answers will force you to explore why your thought pattern is so and if it is really serving you now. From here, we can almost guarantee that you will begin to see the financial traumas and how it has impacted you. You may want to speak to a Personal Finance Coach to help you bring clarity to your diagnostics result and design a solution that will help you heal, recover mentally and financially.
What are the Signs of Financial Trauma?
The way we interact with money, our ability to create, manage and multiply wealth is all centered around understanding and recognizing our own behaviors on a deeper level. Understanding the ‘why’ might be the eye opener or catalyst to our financial issues.
- Do you have negative thoughts around money?
- Do you overly stress whenever you have to go out because you have a morbid fear of spending money?
- Do you feel the need to overspend or have a compulsive need to always spend money?
- Financial avoidance – avoiding all conversations around finance.
- Do you underspend even when the money is available – are you an excessively risk averse?
- Do you have issues with setting boundaries around your finances? – under-earning, under-charging, not making clear terms of payment on contracts etc.
If you experience any of these symptoms, not to worry you have done half the work and it is not a death sentence. Now, you need to be intentional about how you want to address these issues. We definitely cannot address what we cannot identify. Here are some quick tips on what you need to do;
- Journal your financial experiences. Sometimes, we are unable to identify the symptoms all at once – so every time you feel stressed especially when it relates to finance, try to capture the exact feeling, what triggered that feeling and all the emotions you experience when stressed (anger, frustration, sadness, depression, suicidal tendencies etc.)
- You may need to consider having a financial coach help you work through this journey. Sometimes, all we need to start a healthy lifestyle is accountability and the chance to unlearn bad habits.
- Define for yourself what is acceptable financial self-care. What are the activities or steps that may help you relieve whatever financial stress you may be feeling? Financial self-care may not necessarily mean indulgence, rather small practical steps that will ensure you do not traumatize yourself further.
- Financial planning is integral to achieving financial wellness. Part of dealing with trauma is being able to create a plan that can realistically address the issues arising from traumas. From understanding and writing down practical steps you need to take to make, manage and multiply money to imbibing values that liberate you from your financial traumas.
Financial traumas are very individualistic as we do not experience and understand money the same way. While we may have been victims of financial traumas, we can go on to seek healing from past traumas and also work at ensuring that we limit our exposures to future financial traumas.
You can check out our knowledge center for more on Personal Finance and Financial Wellness related content.
With love and wellness,
Proshare Foundation team.