Why financial trauma is more than just a buzzword for banks
A recent survey shows a majority of adults say they have experienced some kind of financial trauma. Banks need to rethink their existing product offerings to help clients better address their financial stress.
“Therapy speak” — or the colloquial inclusion of common psychological terms — has sparked a broad discussion on social media. At its best, “therapy speak” puts language to common challenges people face and can help to normalize the conversation surrounding topics that are considered taboo.
One example is “financial trauma,” a broad-reaching term in the new lexicon referring to stressors that impact how we view and interact with money. Financial trauma refers to issues as commonplace as growing up in a household where money wasn’t discussed, to more serious challenges like losing a job or going through a divorce, says Rod Griffin, senior director of public education and advocacy at Experian.
“It can be anything that creates financial stress,” Griffin says. “It can affect you emotionally and psychologically.”
Financial trauma has become a buzzword recently – but it isn’t anything new, Griffin says. The term simply describes the financial challenges that many Americans face. More than 68% of adults have experienced financial trauma at some point in their lives, according to data from Experian. It’s an especially common phenomena among Gen Z and Millennials, with 73% and 77% reporting having negative thoughts or anxiety about finances, respectively.
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