Nathan Astle explains financial trauma

Understanding Financial Trauma With a Financial Therapist

It’s normal to feel stressed about money because — let’s face it — it’s fundamentally linked to our ability to survive. We use it to fund our basic needs (food, shelter, and heat), so the stakes are high. But where’s the line between normal levels of financial stress and financial trauma?

In diving into the topic, we tapped Beyond Finance’s renowned financial therapist, Nathan Astle, as a resource. One of Astle’s areas of specialty is helping people deal with financial trauma, so he was the perfect person to help us understand this phenomenon, what it may look like, how to address it, and why Beyond Finance clients may be especially susceptible to it.

What is Trauma?

letter blocks on one side reading calm, on the other panic.

Astle explains that, “trauma is two things. It’s both what happened to you, and how your body responds to it.” He adds that, “our bodies have protection mechanisms built in — fight or flight responses — that help keep us safe. The problem is, our bodies don’t always do a great job of distinguishing between physical danger and emotional danger…”

Astle uses an example of finding oneself face-to-face with a tiger. “My body would flood with the cortisol stress hormone, my heart rate would increase, my muscles would tense, all to prepare to fight or flee from danger.” 

But the problem comes in, Astle says, when the amygdala (the part of the brain handling this stress response) misfires and reacts to things that aren’t actually dangerous. “We see tigers where there aren’t any,” he says. 

We see tigers where there aren’t any.”

What is Financial Trauma?

According to Astle, financial trauma can confound some people “because it doesn’t always come from a singular event. We’re used to thinking about trauma in terms of a car wreck, a battle, or a war.” While financial trauma can come from one event — a job loss, a downturn in the markets, or a divorce from a provider spouse — Astle says that it can also come from “a combination of little events.” 

Prolonged experiences that could cause financial trauma include:

  • Struggling with debt
  • A recession
  • An impoverished childhood
  • A period of time with no income
  • Parents’ anxiety about finances

Astle adds that the source of the financial trauma isn’t always a bad thing. “Sometimes people experience trauma when they get an inheritance.” He says that while many people might be excited for the extra cash, for others, spending the money could be a constant reminder of the death of their loved one.

Why Does Financial Trauma Often Get Overlooked?

Man sits contemplating at his workspace

Money is Inherently Emotional

Astle laments that “money is so taboo. We don’t talk about it nearly enough.” But the issue with that, he explains, is that money is also inherently emotional. 

When asked to clarify, he observes that, “the whole idea of money is based on what we put value into, and anything that’s tied to what we think is important will always bring up emotions.” Astle remarks, “we like to think it’s logical — that it’s math – but that’s just the mask that money wears.”

We like to think it’s logical — that it’s math – but that’s just the mask that money wears.”

Lack of Education

Astle explains that one of the problems is a lack of financial education. “We don’t build it into our school system,” he says. Astle emphasizes that even where it exists, financial education often falls short because “if we’re going to talk about how to budget or how the credit system works, we also have to talk about coping skills with stress — about financial trauma. We’ve got to talk about mental health.”

If we’re going to talk about how to budget … we also have to talk about coping skills with stress — about financial trauma.”

According to Astle, “the lack of information about recognizing what financial trauma is, what it looks like — it makes it really hard because we don’t know that something’s wrong if we don’t have anything to compare it to.” He says that this is common with people who have traumatic experiences: “Until someone labels it as traumatic, they’re like, ‘Oh, I just thought that was normal.’”

“But,” Astle says, “having panic attacks every time you look at your bank statement isn’t normal.” He adds that if more people understood the term, ‘financial trauma,’ they’d be able to do something about it.

What Are the Effects of Financial Trauma?

Woman's financial trauma causing headaches

Astle explains that the effects of financial trauma and PTSD are “essentially the same.” He notes that “it’s caused by finances rather than a war or starvation, but our bodies react the same way. It’s cortisol — that stress hormone. It’s adrenaline. It’s dissociation. It’s that disconnect between our bodies and minds.”

Physical Effects

Digging deeper, Astle instructs that “trauma lives in our bodies. It’s not something we think through — it’s something we feel through.” This means that the effects can come out in physical or subconscious ways like:

  • Appetite changes
  • Headaches
  • Stomach problems
  • Muscle tension
  • High blood pressure
  • The jitters
  • Insomnia
  • Nightmares

Behavioral Effects and Dysfunctions

Financial trauma can also result in unhealthy behaviors or interruptions to normal functioning. Astle explains that “if we’re in ‘trauma brain,’ we’re literally not able to access our ‘thinking brain,’ or our prefrontal cortex. This part of the brain is in charge of problem solving, cognitive responses, and rational thought. But when that fight or flight mode is activated, it cuts off the prefrontal cortex from being able to control things.”

Because of this, financial trauma could result in:

  • Trouble concentrating
  • Hypervigilance
  • Avoidance or inaction
  • Underspending or overspending
  • Dissociation
  • Hoarding
  • Self-destructive behaviors
  • Substance abuse
  • Depression and/or anxiety
  • Social isolation

Astle observes that emotions are at the root of these behaviors, and that we can identify a trauma response by checking in with ourselves if our reaction matches up to the situation. 

“Maybe I notice that when I’m looking at a budget or talking on the phone to someone from my credit card company, that my body is telling me that there’s danger. But then I compare that to the fact that I’m just talking on the phone. I’m seeing a tiger where there are only kittens.” Astle concludes that “this can be a really good indicator that can help you realize, ‘oh, this is likely trauma brain.’”

How Can You Address Financial Trauma?

Finding peace from financial trauma

Astle says that “we know from years and years of research that people can and do heal from trauma when they’re intentional about working to address it. There are ways to manage the symptoms that help people experience them less intensely, less frequently, and sometimes never again.” 

Depending on the severity of symptoms, Astle explains that it might be necessary to get professional help from a financial therapist. But he also says that there are some breathing, grounding, and mindfulness techniques that you can try on your own.

Deep Breathing Exercises

When experiencing trauma symptoms, Astle says, deep breathing exercises can “help reset our amygdala.” A guided meditation can assist with this, or you could try one of these self-guided breathing exercises

The 5-Senses Grounding Technique

The 5-senses grounding technique can “carry you back into your body,” according to Astle. During this practice you should first focus on 5 things you can see, then 4 things you can touch, 3 things you can hear, 2 things you can smell, and finally 1 thing you can taste. “I’m holding a pen. Is it smooth? Is it rough? Is it warm or cool when I touch it?” Astle explains that because these things are sensory, they can put you back in touch with your body and with reality.

Putting Your Thoughts on Trial

Sometimes with financial trauma, you can get stuck in “a thought loop of, ‘I’m never going to get out of this debt,’ ‘I’m always going to be poor,’ or ‘I’m never going to have my needs met.’” says Astle. He shares that “putting your thoughts on trial is just like what a lawyer would do — they present evidence and create a story.” 

The new narrative you create, Astle explains, allows you to ask the question, “just because something is like this right now, does that mean it’s going to be that way forever?” He notes that when you can recognize that the answer is ‘no,’ and begin to lay out the facts, you can rewrite your story in a way that grounds you back into reality and can give you a path forward.

Astle remarks that understanding your resources can be one of the key ‘facts’ that can help you to put your thoughts on trial. You may have a support system of family and friends that you haven’t tapped into yet. You might have access to government help. You have the internet at your disposal to financially educate yourself and learn new ways to turn your situation around.

Why Might Beyond Finance Clients Be Susceptible to Financial Trauma?

Family of three looking at their finances

Astle and his colleague Dr. Erika Rasure talk to Beyond Finance clients on a weekly basis through financial wellness sessions. Drawing from his work with clients, he explains, “you don’t become a Beyond Finance client unless you’ve experienced some hardship that, in and of itself, is very often traumatic on some level, right? ‘I lost a job,’ or ‘I have unexpected medical bills.’” 

Along with whatever caused the debt, the debt itself can also become a source of trauma and deep anxiety. Astle says that Beyond Finance clients are “highly susceptible to financial trauma because of the reality of the financial situation they’re in.” But Astle notes that there’s something special about Beyond Finance clients — that they’re already on the right path.  

I think of Beyond Finance as a ‘debt doctor’ — we create this structure around this part of your finances so that they can heal.”

He adds, “I think of Beyond Finance as a ‘debt doctor’ — we create this structure around this part of your finances so that they can heal. Some of it is on Beyond Finance — it’s our job to make sure we’re helping you with your debt. But you as a client are also taking the responsibility on to nurture this part of you that’s in a metaphorical cast. And you’re doing that by sticking with the process.” 

Astle adds that nurturing your finances and mental health can also look like attending the financial wellness sessions, connecting with the Beyond Finance community — even seeing your own therapist if you think it might help. He concludes that, “both your body and your finances know how to heal. You just have to create the environment that will help them do that.”

If you’re a Beyond Finance client, you have access to the weekly financial wellness sessions mentioned in this article! Click here to register for the next session. 

If you’re not a Beyond Finance client but are interested in tackling your debt, click here for a free consultation!