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.
PTSD and Financial Stress: How Are They Related?
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.
How You Can Relieve The Suffering of AFS for Your Employees
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. By giving employee access to their earned-but-unpaid wages, you can help alleviate their sense of financial urgency and anxiety.
You, as the employer, have the chance to empower your employees in financial wellness, and in turn, you can increase your company’s 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.
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