Maintaining financial stability is a significant survival struggle that has longstanding physical, mental and emotional effects. The pressure of income instability can lead to financial trauma which extends its roots deep into the psyche of individuals affecting their behavior, actions and beliefs around money. Unemployment and poverty can lead to life-altering complexities such as food insecurity, homelessness, criminalization and more. Many individuals, across the income spectrum, face financial instability which impacts their decision making, health, and interpersonal relationships. This instability is often misinterpreted as a personal failing when in reality, it’s a societal issue.

Even those who have experienced financial hardship and have recovered, tend to develop feelings of shame, fear, and guilt. Financial instability, often worsened by circumstances like job loss or a major emergency, can cause a production of cortisol, increase adrenaline and fear, disrupt sleep patterns, and put an individual in a constant survival mode. Therefore, it’s not only an economic condition but also a psychological wound.

Understanding financial trauma in a trauma-informed way can assist individuals to make better financial decisions. They can be better prepared with increased financial education and an awareness of how to navigate financial systems. Individuals can seek professional help from financial counselors and therapists, or trauma-informed financial coaches who can guide them in understanding their finances and coping with the mental and physical impact of increased financial stress.

Finally, to alleviate this issue, it is essential for the community, employers, and financial education providers to empathize and provide suitable resources for those experiencing financial trauma. Additionally, people not directly impacted can support their community members by connecting them to resources or being a resource themselves. Financial trauma isn’t an individual’s problem, it collectively affects society, and so the solution also needs to be collective.

If you are struggling with unemployment and need to reach out for assistance, there are resources available. For instance, those in California can contact the Employment Development Department (EDD) for issues related to unemployment benefits and insurance. You can visit eddcaller.com to understand how to get in touch with edd services.