What is Acute Financial Stress?

Post traumatic stress disorder: It’s experienced by people who’ve been through war, have had sexual trauma, have suffered near-death experiences, or other traumatic incidents. But what if I told you there’s a psychological disorder with symptoms closely related to PTSD that are set forth by financial problems? Well, it’s true, and the term is acute financial stress (or AFS).

This problem isn’t small, either. Research shows that 1 in 4 Americans experience PTSD-like symptoms from financial stress. Needless to say, understanding acute financial stress is a crucial asset in improving workplace performance and employee financial health.

Next, let’s explore how exactly PTSD and financial problems may be related.

Understanding the Link Between PTSD and Financial Problems

A study by Payoff1 distributed a survey to 2,104 participants with a modified version of the checklist given to those being assessed for PTSD. This test has a “cut off score”—a number that determines if you are, in fact, diagnosed with PTSD or not.

Even though the assessment was financial stressor-focused—unlike the generalized assessment used in the original PTSD checklist—the cutoff score was used just the same. The results showed that 23% of participants scored positive for PTSD-equivalent scores for financial stress, as did 36% of millennials. The takeaway? Financial stress affects cognitive processes, damages health, and compromises the capacity to cope emotionally much like PTSD does.

This results in self-destructive characteristics: denial, avoidance, anger, extreme anxiety, feelings of isolation, and also a constant state of hyperarousal. Acute financial stress also creates a never-ending need to feel “alert”—one may never let their guard down if they’re always on the verge of losing their home, are drowning in insurmountable debt, and have to stay ready for the next financial emergency. This hyperarousal eventually causes a rise in blood pressure, increases their risk for heart disease, and in turn, skyrockets their healthcare bills. (Which then results in even more debt, financial stress, and PTSD-like symptoms.)

Furthermore, suicidal thoughts are also a potential consequence of acute financial stress. Stressful life events (or SLEs) directly impact suicide rates, and as economic downturns occur—or when the financially stressed lose their homes, cars, or jobs, for example—suicide rates increase. In fact, an examination of 34,000 individuals found that financial stressors have the largest impact on suicide attempts, followed closely after by violent assault.

This is a cyclical problem—financial stress compromising employee mental health, increasing negative spending habits and health care costs, ultimately exacerbating financial stress even further—which needs to be addressed at the root cause.

Coping Strategies for Managing Financial Stress and PTSD Symptoms

People suffering from acute financial stress may benefit from the following coping strategies:

• Keeping to a regular bedtime schedule and avoiding alcohol, tobacco, and caffeine.
• Avoiding lying in bed thinking or worrying and instead reading a calming book or drinking a glass of warm milk or herbal tea.
• Trying to exercise daily. Exercise reduces body tension and relieves stress.
• Slowing down and giving themselves time to focus on what they need to learn or do better.
• Writing things down and making “to-do” lists.
• Break tasks down into small do-able chunks.
• Discussing their feelings with a counselor, doctor, or someone close to them.
• Ensuring they keep taking part in activities they enjoy or used to enjoy.

How Employers Can Support Workers with PTSD and Financial Stress

One way you can help alleviate your employees’ sense of financial anxiety and debt-related stress is by giving them access to their earned but unpaid wages.

Compassionate employers are taking this a step further by providing workers with free financial education and coaching tools that help them build sound long-term financial coping strategies and money management skills.

They’re being rewarded for their efforts with greater workplace performance, engagement, and retention rates.

Click here to see how Payactiv can relieve employees of financial stress, lessen their risk of mental and physical health decline, and improve your workplace productivity today.

1. https://www.payoff.com/financial-wellness/stress/

2. https://www.goodtherapy.org/blog/financial-stress-significant-risk-factor-for-suicide-0503123/