14: Exploring Financial Trauma Flashcards
What are the learning objectives of Video 14?
Participants will be able to:
* Define ‘financial trauma’
* Outline common ways financial trauma forms
* Identify manifestations of financial trauma, signs, and symptoms
* Outline current research on financial trauma
* Outline the role of the CFT-I™ and how they can help
Learning objectives are essential for guiding the educational focus of the content.
How is financial trauma defined?
Financial trauma is a part of the ‘trauma umbrella’ that helps explain the adverse relationship people form with money. Trauma is any event or experience that is physically and/or psychologically overwhelming to the exposed individual.
Definition emphasizes the psychological impact of financial experiences.
What is the relationship between abuse and trauma?
Abuse often leads to traumatic responses, where abuse is the activity or experience and trauma is the response to it. There are degrees of difference between financial abuse and financial trauma.
What role does money play in life as a necessity?
Money is identified as a necessary tool to sustain all other major life activities, which explains how financial trauma can be experienced.
How does money function as a source of social connection?
Money is a major source of social connection and disconnection.
In what ways does money influence participation in life?
Money directly and indirectly influences participation in life at various levels:
* Individual
* Family
* Community
* National
* Global
What are systemic power imbalances in relation to financial trauma?
There is a wide range of access to financial resources, leading to systemic power imbalances that leave individuals and groups vulnerable to financial trauma.
What is meant by financial identity?
Every person has a financial identity, which is a personal relationship with money that includes ideas about its meaning, usage, and acquisition.
What ideals contribute to financial success in Western culture?
Common ideals include:
* Personal responsibility
* Individual initiative
* Good moral character
However, financial lives are more complex than these ideals.
What are the two primary levels where financial trauma originates?
- Interpersonal/Relational
- Systemic/Organizational
What are some examples of interpersonal/relational financial trauma?
- Financial infidelity
- Financial abuse
- Addiction
- Changes in family structure (Death and Divorce)
- Disability
- Money replaces emotional connection in family
- Unequal financial distribution within the family
- Theft by family members
- Denial of financial entitlements
How does addiction impact family finances?
Addiction can lead to variability in income and stability around financial sources, affecting available funds for other activities.
How do changes in family structure contribute to financial trauma?
Changes such as death and divorce can significantly shift the availability of financial resources and may lead to changes in the standard of living.
What are examples of systemic/organizational financial trauma?
- Institutional/Governmental policies generating unequal access to financial assets
- Changes in economic cycles (Recessions and Depressions)
What distinguishes Big T trauma from Little t trauma?
- Big T trauma: Painful and overwhelming events (e.g., being held up at gunpoint).
- Little t trauma: Contextual and often a series of small events that leave a cumulative impact.
What are the five types of trauma?
- Impersonal Trauma
- Interpersonal Trauma
- Identity Trauma
- Community Trauma
- Cumulative/Lifelong/Complex Trauma
How do traumas impact the mind and body psychologically?
Trauma leads to disturbances in thoughts, feelings, and behaviors, manifesting in various psychopathologies.
What physiological effects can trauma have on the body?
It affects the Autonomic Nervous System, leading to:
* Parasympathetic downregulation
* Sympathetic upregulation
* Chronic trauma can cause hyper-arousal or hypo-arousal.
What are the frequencies of financial trauma?
- Single event trauma: Random and sometimes unavoidable.
- Repeated trauma: Same adverse experiences recur, leading to coping mechanisms.
- Complex trauma: Multiple types of adverse experiences occur.
At what developmental stages can trauma occur?
Trauma can occur at any life stage, and earlier trauma can hinder psychological development without intervention.
What are financial flashpoints?
Characteristics include:
* Developed in childhood
* Passed down through generations
* Typically unconscious
* Contextually bound
* Factors driving behavior
Examples include witnessing financial misconduct within the family.
What is an example of financial trauma related to cross-class experiences?
Being teased or ridiculed for a particular class background can occur at any social class level.
How does moving between social classes contribute to financial trauma?
Moving from one social class to another can lead to confusion or imposter feelings due to unfamiliar implicit rules.
What are financial crimes in relation to financial trauma?
Financial crimes committed by non-intimate connections (e.g., cyber attacks) and may include theft by family members.
How can denial of financial entitlements cause trauma?
Issues with estate planning or resource allocation can lead to distress based on expectations.
In what way can money replace emotional connection in families?
For families with certain attachment styles, money may fill the emotional connection void.
What impact does unequal financial distribution have within families?
Favoritism or parental financial withholding can lead to issues of entitlement and disempowerment among siblings.
How can divorce lead to financial trauma?
Adverse financial arrangements during divorce can have long-term financial impacts.
What financial issues arise from death in a family?
Lack of financial planning or resources can create significant financial trauma after a family member’s death.
What financial challenges can arise from disability?
Disability can lead to economic strain and resentment within the family due to lack of resources.
How do addictions affect financial security?
Supporting and treating addictions can be costly and deplete financial resources.
What are some signs of financial trauma?
- Hoarding and/or avoiding money
- Anxiety, fear, shame, anger
- Physiological responses (e.g., increased heart rate)
- Control/manipulation of money
- Unopened financial statements
- Hyper vigilance regarding finances
What is the role of the CFT Level-One in identifying financial trauma?
- Think about the potential for financial trauma
- Know the difference between Big T and Little t trauma
- Identify potential signs of financial trauma
- Recognize different financial problems across life cycle stages
Define financial trauma.
Financial trauma refers to overwhelming financial experiences that leave psychological and physiological impacts.
How does trauma differ from abuse?
Trauma generally refers to the response or outcome, while abuse refers to the actions or behaviors.
What is the definition of trauma according to Christine Courtis?
“Trauma is any event or experience (including witnessing) that is physically and/or psychologically overwhelming to the exposed individual.”
Differentiate between ‘Big T’ trauma and ‘Little t’ trauma.
‘Big T’ trauma refers to universally painful events, while ‘Little t’ trauma is contextual and driven by personal experience.
How does the Financial Therapy Association view money’s role in life?
The FTA recognizes that financial lives are complex and acknowledges systemic factors and social determinants.
Explain the concept of ‘financial identity.’
Financial identity refers to a person’s personal relationship with money, including beliefs about its use and acquisition.
What are the two primary ways money functions in life?
- As a necessary tool to sustain major life activities
- As a major source of social connection and disconnection
How does money influence participation in life?
Money influences participation at various levels, creating systemic power imbalances that can lead to financial trauma.
What are the two primary levels where financial trauma can originate?
- Interpersonal/Relational level
- Systemic/Organizational level
Name the five types of trauma and provide a financial example of each.
- Impersonal Trauma: Being robbed at gunpoint by a stranger
- Interpersonal Trauma: A family member repeatedly stealing your money
- Identity Trauma: Being overlooked for financial opportunities due to gender
- Community Trauma: Experiencing redlining or housing discrimination
- Cumulative/Complex Trauma: Multiple financial traumatic experiences across different contexts
How can changes in family structure create financial trauma?
Changes like death and divorce can alter access to resources and create instability and emotional stress.
Explain how economic cycles can create financial trauma.
Economic cycles can disempower individuals, undermining stability and leading to traumatic residue from inadequate resources.
How does trauma impact the body physiologically?
Trauma affects the autonomic nervous system, leading to imbalances that can cause hyperarousal or hypoarousal states.
List physical signs that might indicate financial trauma.
Physical signs include:
* Increased heart rate when dealing with financial matters
* Tension in various parts of the body
* Distress in the gastrointestinal system
* Physiological fight/flight/freeze responses
What behavioral signs might indicate financial trauma?
Behavioral signs include:
* Hoarding or avoiding money
* Control/manipulation of money
* Unopened financial statements
* Lack of electronic access to financial statements
* Hypervigilance about financial statements
* Constant checking of accounts
How does financial trauma impact psychological development?
Financial trauma can interrupt psychological development, particularly when it occurs early in life.
Define financial flashpoints according to Klontz et al.
Financial flashpoints are significant money-related events that leave psychological impacts, often developed in childhood.
How is a financial flashpoint different from a single instance of financial trauma?
A financial flashpoint operates largely outside conscious awareness and forms part of intergenerational patterns.
Provide an example of a financial flashpoint.
Examples include:
* A father stealing money from a mother in front of a child
* Financial secrecy within families
* A parent criticizing a child’s spending habits
* Dramatic financial loss during formative years
* Sibling favoritism with financial resources
Name the six developmental stages mentioned in relation to financial trauma.
- Infants/toddlers
- Young children
- Adolescents
- Young Adults
- Middle-Aged Adults
- Elder Adults
How does the age at which financial trauma occurs affect its impact?
The earlier trauma happens, the less psychological development likely occurs without intervention.
What financial traumas might be particularly impactful for young children?
Significant financial traumas might include:
* Parents divorcing
* Arguments about alimony
* Sibling theft
* Parental theft
* Inconsistent meeting of material needs
* Displacement from home
What financial traumas are common for middle-aged adults?
Common financial traumas include:
* Disability of a partner
* Job loss
* Divorce
* Immigration issues
* Financial dependency of children
* Responsibility for aging parents
How can cross-class experiences create financial trauma?
Cross-class experiences can create trauma through ridicule for class background, moving between classes, and feeling like an impostor.
Describe the social class spectrum according to the material.
The social class spectrum includes:
* Out-of-sight level of wealth
* Wealthy individuals
* White-collar professionals
* Lower managerial/upper blue-collar workers
* General laborers
* Those in poverty
Why might upward mobility across multiple class levels create trauma?
It exposes individuals to unfamiliar social rules, leading to identity confusion and feelings of being an impostor.
How can money replace emotional connection in families?
Money can fill the emotional void in families, particularly those with insecure attachment styles.
Describe how attachment styles relate to financial trauma.
Attachment styles influence relationships with money, affecting trust and behavior regarding finances.
How might unequal financial distribution within a family create trauma?
It can lead to sibling polarization, entitlement, disempowerment, and long-term adverse relationships with finances.
What is the role of a CFT-I™ when it comes to financial trauma?
The role includes recognizing signs of financial trauma and understanding its impact across life stages.
How should a financial therapist approach a client showing signs of financial trauma?
Recognize signs, consider the timing of trauma, and help clients re-contextualize adverse experiences.
What knowledge does a CFT-I™ need about neurological impacts of trauma?
A CFT-I™ should understand that trauma interrupts neural development and affects the autonomic nervous system.
