Money and Mental Health - Overcoming Financial Trauma in South Africa

CEO of National Debt Advisors, Charnel Collins, unpacks the psychology of money and offers tactics to improve financial health this Mental Health Awareness Month. 

11 October 2023: Whether it manifests itself as a strained relationship with money or as past trauma experiences unrelated to finances but exhibited through unhealthy financial behaviours, financial trauma affects South Africans from all walks of life.

October is Mental Health Awareness Month and CEO of National Debt Advisors, Charnel Collins, says the often-overlooked psychological aspects of money which leads many consumers to adopting unhealthy financial habits that end up entrapping them in the debt cycle.

Collins said that after over a decade in assisting consumers struggling with their finances, she noted that one of the main contributors to financial trauma in South Africa was poverty and/or general financial strain, which happened to be the daily lived experiences of many people in this country. From historical poverty to present day economic pressures, scarcity of money affects many South Africans.

“Financial trauma normalises poor financial habits like living pay cheque to pay cheque, high debt levels, lack of financial planning, and no emergency fund,” said Collins. “Furthermore, the effects of financial trauma can have significant emotional repercussions, potentially leading to feelings of inferiority and anxiety. People experiencing financial hardships huge undergo huge emotional distress, especially when they struggle to find suitable employment or meet their income aspirations,” she said adding that embarrassment and avoidance are also common outcomes of financial trauma.

She offered two self-reflection questions consumers can use to gauge their financial trauma and better understand their relationship with money: Do you ever find yourself feeling strongly compelled to make a purchase, only to feel a sense of emptiness after buying it? And do you often feel extremely anxious when buying something that could greatly enhance your life, even when you have more than sufficient funds available?

“If your answers to both questions are yes, you are likely experiencing financial trauma,” said Collins, and offered the following strategies for effectively addressing the financial trauma:

• Educate yourself and learn from your mistakes: Seek resources and products to assist you.

• Be proactive: Taking proactive steps toward improving your finances, including:
  • Create a budget to gain a realistic understanding of your finances.
  • List your debts from smallest to largest and pay off the smallest debts first.

• Increase your work value and cash flow: Upgrade your skill set or explore side hustling.

• Manage your stress: Prioritise self-care including physical exercise and strive for positivity.

• Seek professional help: A counsellor or therapist can help you work through their financial trauma by providing coping strategies and emotional support.

• Consult a financial adviser: Collaborating with a financial adviser can offer professional planning and guidance in creating a roadmap to financial recovery.

“As South Africans grapple with financial trauma, the conversation around money and mental health becomes increasingly important in dealing with monetary struggles. By acknowledging the psychological impact of money and implementing strategies for healing, people can take a significant step toward a better financial future,” said Collins.

-- ENDS --

About National Debt Advisors 

National Debt Advisors is South Africa’s number one debt counselling company and is perfectly positioned to help South African consumers who are struggling with their finances, become debt-free in under 60 months. NDA will negotiate with creditors for reduced monthly interest rates and extended terms – ultimately consolidating all debt repayments into one lower monthly instalment - whilst protecting consumers from harassment by creditors, securing their assets against repossession and leaving them with more money left to live on. NDA will help South Africans gain their financial freedom.