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Writer's pictureNathan Astle

What is Financial Trauma?

Updated: May 7


Photo by Jan Canty via Unsplash

What do you think of when you hear the word “trauma”? Many of us think of some major event that triggers PTSD (post traumatic stress disorder) such as a battle/war, refugee experience, car accident, or a medical injury. While all these events certainly can create traumatic symptoms in our bodies, smaller events of emotional harm, neglect, prolonged financial strain, and other charged situations can have the exact same response in our bodies.


I think of our bodies as a type of bank account (financial therapist… I know). When we experience stressors (relationship difficulties, work, personal mental health, etc.), it represents withdrawals from that bank account. However, we also have deposits we are regularly making. Our internal resources like our coping skills, self-talk, values, and self-care act as deposits into that account. External resources like relationships, community programs/groups, societal and governmental assistance, and other social connections also act as deposits into that bank account.


The big problems come when we regularly are in the red of our body bank accounts.

Life is full of normal everyday deposits and withdrawals. And generally, our bodies tolerate most of these things very well. The big problems come when we regularly are in the red of our body bank accounts.


Our bodies have a system in place when we “go in the negatives”. We go into our “survival” mode with our fight/flight/freeze reactions. These reactions have been incredibly helpful in keeping us safe. The difficulty is that our brains respond to physical danger almost identically to what we perceive as emotionally dangerous.


When we experience any major financial event (major withdrawal) or have a steady negative

relationship with money built up over time (consistent minor withdrawals), our brains can go into this survival mode. When we stay in survival mode long enough, our brains begin to “misfire” and everything feels dangerous to our bodies. So, our bodies do what they are supposed to do and protect us in the ways they know how. We get anxious and avoid issues (flight), get irritable with our financial partners (fight), or dissociate from our bodies and numb ourselves (freeze).


Financial trauma is real, and it can also be treated.

Do any of these reactions look familiar to yourself or someone you care about? There might be some financial trauma there. Treating financial trauma often requires professional help to process the impact of the financial situation, manage emotions, and retrain our brains to respond to money differently. Meeting with a financial therapist can be very helpful with this.


There is significant research that shows that intentional body work can help our brains come back to regulation. This may look like mindfulness techniques, deep breathing activities, exercise, and naming emotions and their locations in the body when you experience them. Financial trauma is real, and it can also be treated.

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