Are You Struggling With Financial PTSD?

Written by: the Editors of goop


Updated on: April 26, 2018


Reviewed by: Galen Buckwalter, Ph.D.


A research psychologist of twenty-five years, Dr. Galen Buckwalter uses data analytics to study people’s relationship with money. He began his research of financial personalities with the widely accepted HEXACO model (honesty/humility, emotionality, extroversion, agreeableness, conscientiousness, openness), but his data sets soon returned an unidentifiable seventh dimension, or, as his team labeled it, “factor fear”: People were plagued by feelings of stress, failure, and isolation surrounding their finances. They wanted control of their financial situation but had slipped into a permanent state of anxiety due to overwhelming fear.

Buckwalter had questions: Was this a temporary state of stress? Had money reprogrammed their brains in a way scientists had missed? That is, until his boss told him the story of someone who’d lost her house to foreclosure. Listening to her symptoms, Buckwalter concluded the “factor fear” is essentially financial PTSD.

The neighbor’s trauma—hypervigilance around money, avoidance of financial tasks, emotional blunting—was in perfect alignment with Buckwalter’s previous studies on PTSD at the University of Southern California. Not only that, but according to his research, 23 percent of adults and 36 percent of millennials experience financial stress at levels that qualify as a diagnosis of PTSD. When our minds are locked into this state of fear, it is impossible to face the reality of our financial status, let alone plan for the future.

A Q&A with Dr. Galen Buckwalter


How do you define financial PTSD?


It is the physical, emotional, and cognitive deficits people experience when they cannot cope with either abrupt financial loss or the chronic stress of having inadequate financial resources.

A more descriptive understanding of the situation of financial PTSD is the following:

  • Financial PTSD is the result of living at least three months when one’s income is not adequate to meet one’s expenses. The symptoms must be so severe they disrupt home and/or work life and cause the person a sense of great distress. This may also include a traumatic financial loss, such as foreclosure on a residence; losing a large amount of money due to fraud or an unfair divorce settlement; an unexpected tax or business loss; or losing a job and one’s income.

  • Physical symptoms: Nervous energy, jitteriness, insomnia, hyperreactive to situations that remind one of financial problems, such as ringing phones that may be calls from debt collectors.

  • Emotional symptoms: Inability to feel close to friends and significant other, difficulty enjoying things that were enjoyable, a sense that bad things are inevitable and that life will be cut short.

  • Cognitive symptoms: Persistent negative thoughts about self and the environment, difficulty concentrating.

Undoubtedly, the area of life that is always impacted and often ends up adding to the stress, when it could be an incredible resource for the person, is close relationships. Financial PTSD saps the person of their desire to be intimate and open in their personal relationships. The person also becomes irritable and prone to angry outbursts, and guess who are the most frequent targets for these negative emotions? Of course, those who are closest to the person. So think how all of this would feel to the people who are close to someone with financial PTSD. The person becomes distant, they won’t talk about what is going on, and they are downright nasty at times. All of this toward the people they need the most.


How does financial stress differ from other types of stress? And how does it manifest?


There is a condition called allostatic load, discovered by the brilliant molecular biologist Bruce McEwen, that recognizes the lifelong effects of chronic stress. Evolution has prepared our bodies to handle short bursts of intense stress incredibly well. It’s why you don’t see a lot of chronic diseases among predatory animals. Think about your average cheetah. She has some pretty intense stress to deal with. But when the hunt is done, it’s time to chill and lounge with your family and soak up some sun.

Not having enough money is a whole different kind of stress. It keeps our physiology amped up pretty much 24/7. Without the chance to recuperate, all the hormones that we need when we are truly threatened stay turned on and just start chipping away at our body. That is allostatic load: the wear and tear of chronic stress beating up the systems that are weakest in a given person. So long-term financial stress can well end up as diabetes in one person, heart disease in another person, and psychiatric problems in another.


How common have you found financial PTSD to be? Who is most affected by it?


Our research repeatedly found that over 20 percent of the population meets the above criteria for financial PTSD. It seems to hit all demographic groups at relatively constant rates, although millennials report these symptoms more frequently than other age groups.


Is a traumatic event necessary to feel the effects of financial PTSD?


This is an area where I have had some fascinating discussions with my clinical psychologist friends. The most recent version of the Diagnostic and Statistical Manual of Mental Disorders, DSM-5, requires a traumatic event for a diagnosis of PTSD. But this makes little sense to me. If the end results are identical—that is, if the symptoms are the same, the nightmares, the irritability, the avoidance, etc.—then it shouldn’t matter how one got there. If one person got there from the course that we see after a trauma and another after months of nagging, unchangeable financial stress, but their lives end up with the same difficulties, we need to treat them as equally serious.

I have met numerous people with traumatic and financial PTSD, and in general it does seem that those with a trauma history are more impaired overall. But that is just one person’s impression. Until the psychological community at least recognizes that financial PTSD is a condition and that it warrants systematic research, we won’t know. But the real danger here is the thousands of people who won’t be treated for a condition for which there are good treatments all because of a diagnostic requirement.


What can you do to heal from financial PTSD? Is it possible to form a new, healthy relationship with money?


There are two basic problems someone with financial PTSD needs to address to recover and develop a new relationship with money. The first are the emotional, physical, and cognitive problems that happen with financial PTSD, and the second are the financial problems that are causing all of the PTSD symptoms in the first place. For long-term change in your financial status, one either has to make more money or spend less—that’s it. Taking out another credit card won’t work. But to change your earnings or your spending takes an incredible amount of self-discipline, concentration, positive self-esteem, etc., all of which are in short supply in someone with financial PTSD.

I always encourage people with financial PTSD to first work on themselves before trying to reshape their relationship with money. Ideally one would be able to find a mental health professional who has experience in helping people deal with chronic stress or PTSD. In lieu of that, there are any number of cognitive behavioral therapy (CBT) exercises one can teach oneself: Negative thought stopping, journaling, progressive muscle relaxation—these are just a few exercises that most people can learn to do that are effective for many people with financial PTSD.

The goal is to gain control of the most troublesome symptoms of financial PTSD before tackling the life-changing task of developing a new relationship with money. Baby steps at first: Control the negative thoughts, learn how to relax and get that cheetah-lounging-in-the-sun vibe going, and then you can tackle the process of getting paid what you are worth and spending only on things that bring you satisfaction. Then who knows what’s next. Maybe you will be the one to tackle income inequality?


Any good resources for someone who has experienced financial trauma?


The T2 Mood Tracker, The Financial Therapy Association, Calm.com, and HappyMoney (please note that I have a financial interest in this product).

Dr. Buckwalter has been a research psychologist for over 25 years. He served as the Chief Science Officer at Payoff, a financial services company focused on using science to improve people’s relationship with money. He was formerly the CSO of eHarmony, where he designed the site’s famed matchmaking service to assess and match couples into long-term relationships. His company, psyML, uses psychology and machine learning to provide insights into the personality and emotions behind data. See more of his writing here, https://medium.com/@jgbuckwalter.