Financial disharmony: Could there be trauma behind the money drama?Article added by Susan Zimmerman on September 1, 2010
Susan Zimmerman

Susan Zimmerman

Apple Valley, MN

Joined: August 21, 2010

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When it comes to financial disharmony, could there be trauma behind the money drama? The short answer is: yes.

If your clients’ financial choices have made them poorly prepared in their own financial planning, it’s not just the spending messages of our culture that could be the culprit.

For the purpose of this article, I’m not talking about the stress clients experience when they see or hear frightening stock market or economic news. I’m talking about the residual distress left by traumatic experiences that often go back to childhood.

To offer a primer on trauma here, I’ll start with what therapists sometimes call “Big T” vs. “Little T.” What that refers to is the difference between significantly distressing traumatic events, and events that are stressful or emotionally painful, but are less significantly damaging long term.

Let’s also note that just because a person has achieved a successful career and significant income or wealth doesn’t mean trauma never existed. Unresolved traumatic events have a way of upsetting things at unpredictable and surprising times. Certain life events can trigger an old trauma that was essentially unrelated to the present-day trigger (such as bad news coverage).

Traumatic events are stored in the body, more specifically, in the neural pathways of the brain that trigger certain nervous system reactions. If there was danger or perceived danger at the time and the person was powerless with no support system to help him or her cope, the trauma can come back to haunt them at any time. These are the conditions underlying Post Traumatic Stress Disorder (PTSD). PTSD is often characterized by distressing flashbacks, disturbing dreams, and generally high anxiety.
Let’s look at an all-too-common scenario. A child is raised in a high-stress environment, such as one in which an alcoholic parent is sometimes loud, frightening, and harshly punishing. That child is reaching cognitive conclusions throughout this experience, even though they’re outside of conscious awareness. These conclusions are about the world, life, and his or her own value. Rarely are these cognitions positive. Instead, they’re negative beliefs such as:
  • I am bad (or a burden, or stupid, or worthless)
  • I’m not safe (or the world is not safe)
To the degree the childhood experience was distressing, there are residual negative effects that generalize to areas such as money, gender-role expectations, and other areas. Without a supportive person to help the child process the traumatic experiences when they happen, inaccurate conclusions are reached on the part of the child, which carry over into adulthood.
One of the most common coping habits that occurs in such circumstances is avoidance. The adult with unresolved trauma avoids situations that feel the same as the distressing circumstances from childhood. For example, upon hearing a loud, argumentative voice, the adult’s alarm center of the brain (the amygdala), sounds, causing an automatic fight or flight response. The powerless feeling is re-triggered, and the adult feels incapable of dealing with the stressor (just like in childhood), so avoidance is chosen. Flight feels right.

Statistics shows that we are likely dealing with clients who have untreated depression or anxiety. It causes more absenteeism and lost productivity than any other physical disorder (estimated at $52 billion per year). There are 18.8 million American adults with depression. Fifty-four percent believe depression is a personal weakness, 41 percent are too embarrassed to seek help, and 80 percent of depressed people are not in treatment. But they may be sitting in your office, fretting about their money.

When clients hear or see frightening economic news, the alarm center of the brain wins the race for behavior. If they experienced trauma in their earlier life, their alarm center is particularly vulnerable to bad news. This can cause financial neglect or impulsive reactions that damage their financial picture.

What can we do to help them? For one thing, we can deliver a mini brain-science primer. Let them know their biology works against them when it comes to financial behavior. We need to help them know the alarm they feel is the brain’s exaggerated response and is set for fleeing a predator, not fleeing their portfolio mix or financial plan.
Give them a refresher on what the facts are about their money and how it’s positioned in their portfolio, because alarm causes them to be incapable of accessing their logical, left-brain mind. They need you to be their left brain for a while.

And then, if you feel the relationship is one of high trust, you could ask them if they’ve experienced any highly distressing events in their life that they believe make money matters more worrisome for them. Ask what makes them feel most uneasy. Avoid using the word trauma, as that can elevate their anxiety. If they start to tell you about it, let them know you care about their comfort and feeling of security very much. Then share your understanding that there are professionals who specialize in methods that can help them significantly reduce their general anxiety.

If you prefer to have someone specific to refer to clients, I recommend searching for therapists who work with a trauma recovery methodology called EMDR. I’m trained in it, and find it extremely helpful for people. You can do a search for EMDR trained therapists in other geographic areas at www.emdria.org.
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