Nobody Ever Told Me How Much Trauma Can Affect Your Finances. Here's What I Wish I'd Known

    Trauma can influence all areas of your life including your finances.

    At age 31, I was officially diagnosed with PTSD. No one was shocked, and when I say no one, I mean me. Already at age 31, I had been through it. My mom died when I was 15. My remaining family used me for my mom's Social Security death benefits. I was homeless for the remaining years of my high school career. And I had just finished my radiation treatment for stage 2 thyroid cancer.

    While I already had an established career in the nonprofit sector and attained three higher-ed degrees, I struggled. The trauma affected all areas of my life. I couldn't process specific interactions or activities without shutting down or deflecting with humor. I was unable to have healthy relationships. And I sucked at money management. Trauma can affect all areas of your life, especially your finances.

    What is trauma?

    According to the American Psychological Association, trauma is "an emotional response to a terrible event like an accident, rape, or natural disaster. Immediately after the event, shock and denial are typical. Longer-term reactions include unpredictable emotions, flashbacks, strained relationships, and even physical symptoms like headaches or nausea." 

    While most people associate trauma with one of the above mentioned situations, studies have shown that you can also have trauma due to repeated micro stressors. 

    Everyone has a fight or flight response to how you handle certain situations. Leftover from our caveman days, our fight or flight response is intended to keep us safe and out of harm's way. 

    Usually, after a stressful event, you have time to process it. Once you've processed the event, your brain can calm down because you are no longer in danger. Repeated stressful events can cause our fight or flight response to spike without proper time to process what is happening. As a result, your response can stay elevated, resulting in trauma. Does any of this sound familiar? 

    How is trauma diagnosed?

    A medical or psychological expert typically diagnoses trauma after an examination. 

    A lot of people who are diagnosed with trauma have a high ACEs score. Adverse childhood experiences, or ACES, are events that occur in childhood that can be potentially traumatic. This includes events like experiencing abuse or neglect, having a family member die by suicide, or witnessing domestic violence, having substance abuse in the household, or instability with housing. 

    You may score high on an ACEs test and still feel perfectly fine. But others aren't so lucky, with over half of the adult population suffering long-term effects from experiencing toxic stress. Unhealthy relationships, economic instability, and chronic health problems have all been linked to high ACEs scores. So how exactly does trauma affect your finances? 

    Trauma can affect your earning potential.

    A lot of us who experience trauma have chronic health problems. Intense stress causes inflammation which over-activates your immune system. An overactive immune system is the cause of many health issues, including diabetes, heart conditions, and certain types of cancer. 

    When you have any chronic health condition, you may be limited on what physical tasks you can do or how many days a week your body can handle working even a sedentary job. 

    Trauma can also affect our self-worth. "Trauma can affect how we see ourselves, how we display ourselves in the world, how we interpret things other people say, and how we act and react to everything that surrounds us," says Sarah Potter, a magical mental health mentor who's the host of podcast Social Media Therapy

    "When it comes to our earning potential, if our trauma is affecting our self-worth, and our self-worth is very low, it is effortless to accept lower earnings or low offers for jobs and projects because we don't think we are worth more." 

    Personally, I am guilty of taking lower-paying jobs because I was just excited anyone wanted to work with me. 

    You can quickly become an overspender or a shopaholic.

    I already shared that I had issues with money management in the past, so I'll let you in on a little secret. … I was a shopaholic. 

    I KNOW! I KNOW! Many people who end up writing about personal finance have a history of financial issues they learned from, and I'm no exception. In my 20s, my coping mechanism to feel better about myself was shopping. 

    I had no control over my financial situation or housing instability in high school. I spent so much time just trying to survive that I didn't know how to thrive when I could finally breathe. I wasn't used to having belongings that didn't have to fit in a garbage bag and a backpack. So I accumulated stuff. The more things I purchased, the more I proved to myself that I had money. If I could see my cash physically in front of me, it meant it wasn't going anywhere. 

    It wasn't until I broke up with my ex-fiancé and had to move out that I saw the damage I had done. I had spent thousands of dollars on crap for it to be donated or thrown away. That's when I finally started taking myself and my finances seriously.  

    Your fight or flight response can influence your money management.

    Chronic stress or repeated triggers can keep our fight or flight response in an aroused state if not appropriately regulated. Issues like the current housing crisis our country is facing now can affect your fight or flight response. 

    For example, you may be wondering if you can financially afford to keep living in your current residence for fear of your landlord jacking up the prices. If you're looking for a new place, you may find what was once affordable is now a lot more expensive. 

    Worrying about housing can send your fight or flight response into overtime. In a hyper-aroused state, you may stop paying other bills you deem not necessary to focus on saving money for what feels like impending doom. But what you fail to realize is that late payment of bills can negatively affect your credit score. A less than stellar credit score can keep you from renting a place just as much as a lack of a deposit can. But when you're in that state of mind, it's harder to see the overall picture. 

    Trauma can influence a lack of boundaries.

    "Trauma can feel like seeing the world through gray-colored glasses," says Potter. "Everything has lost its touch, its passion, and feeling. If you've been physically, mentally, and emotionally abused, your boundaries have been repeatedly broken down by the people around you." So what does not having boundaries look like with your finances? 

    It can mean you're always the family member to bail someone out. We all have family members that may need occasional help, which is normal. What's not normal is having one repeatedly needing assistance and then coming to you for it. 

    Another example could be the friend that covers everything not because you want to, but because you want people to like you. Fear of being needed or not wanted can also lead to poor decisions like financially supporting a toxic partner. 

    So, what can we do?

    Both Potter and I are hardcore advocates for seeking professional help. Potter shares that it's taken her eight years to finally feel comfortable expressing financial boundaries without having an anxiety attack. It's taken me two years to gain the self-confidence needed to leave a toxic work situation so that I could become a full-time freelancer.  

    Therapy can be expensive, but there are ways to help navigate the mental health industry. You can use a search engine to find a therapist in your area that sees patients on a sliding scale. Therapists that utilize the sliding scale method are usually accommodating to what a person can afford. Other options are online therapy like Talkspace or Betterhelp.   

    Trauma sucks, but there can be light at the end of the tunnel (and a massive stack of cash in your bank account). I'm rooting for you.