Are you experiencing financial PTSD? Here’s how to overcome it

Originally published on Sanlam Reality’s Wealth Sense blog

Are you struggling with feelings of stress, isolation and failure around money? You might be suffering from financial PTSD. We unpack what it is and how to overcome it.

What is financial trauma and financial PTSD?

“Any trauma is defined as an experience that is perceived as too big for you to handle,” explains Jo’burg wealth psychologist and human behaviour specialist, Ilze Alberts. “With any kind of trauma, it impacts the body, whether it’s physical symptoms, emotional distress or mental disorganisation. The same can be applied to financial PTSD.”

So what is financial PTSD? Research psychologist Dr Galen Buckwalter, who uses data analytics to study people’s relationship with money, discovered the similarities between conventional PTSD that he had researched and the symptoms of those suffering from financial trauma. He defines financial PTSD 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.”

How does financial PTSD come about?

“Financial PTSD can result from various things such as losing your job or making a bad investment,” says Alberts. “Especially with the COVID-19 pandemic, the financial strain affecting South Africans is incredibly high.”

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The harsh reality in numbers
Financial stress has soared in South Africa (SA), according to one of SA’s biggest banking groups’ savings and investment monitor, with 58% of households across the country facing high or overwhelming financial stress as the COVID-19-induced economic crisis knocks savings and raises debt levels. Another key finding is that 40% of those currently employed only have enough funds to survive for one month or less should they lose their jobs, and as many as 66% of the respondents stated that they are constantly worried about losing their jobs or income.

A financial planner can help you make smart choices when it comes to your money, and help to reduce your financial strain. Speak to one today by booking a meeting here.

What are the effects of financial PTSD?

“When someone is experiencing financial loss or a lack of financial resources, the individual is forced to cut costs which undoubtedly impacts one’s lifestyle and way of living as well as any individuals that they are supporting,” says Alberts. “Being pushed into a corner like this and having to do things like using up the last of your savings, cancelling life policies and insurance or medical aid plans has a direct impact on the degree of the distress one can face with financial PTSD. This stress can sit in your body, mind, emotions and in your relationships.”

Alberts explains that this type of trauma can present in various ways, such as:
• Lack of sleep
• High levels of anxiety
• Off-balance cortisol levels
• An increase or decrease in appetite
• Mental instability
• An inability to make decisions
• Lack of self-confidence or self-esteem
• Perceptions of failure
• Negative thoughts
• Depression

Is it possible to heal from financial PTSD?

“Yes,” says Alberts. “This is done by forming a new healthy relationship with money. I believe it’s important to have a relationship with money in the same way that you have with a loved one. With someone like a life partner or a spouse, you spend a lot of time looking after and nurturing that relationship. This is how your relationship should be with money. You need to be caring, purposeful and respectful with money. This is how it manifests.”

Here are some cash-smart ways to save when you’re feeling the pinch.

Buckwalter also notes that along with forming a healthy relationship with money, addressing the financial problems that are causing all of the PTSD symptoms in the first place is of utmost importance. He suggests that for long-term change in your financial status, “you either have to make more money or spend less – that’s it.” Order, organisation, discipline and self-control with your finances is crucial to overcoming this trauma.

Use these budget templates and this budgeting guide to get on top of your finances.

Things you can do today

“Get rid of unnecessary credit cards, especially if they make it too easy to spend. Pay off debt as quickly as possible and work to create and build up a savings account. Cut unnecessary costs, set up a budget for you and your family and most importantly: do not live beyond your means,” says Alberts.
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