In the fourth installment of the LISC-NPQ series, “Community Strategies for Systemic Change,” LISC partner and Rubinger Fellow Joseph Ceasar explains the high cost of financial PTSD on rural communities of color, as in Lufkin, Texas, where he runs the Legacy Institute for Financial Education. Among a range of intensive strategies Ceasar stands behind is “a trauma informed approach rooted in listening to people’s stories and helping them address challenges arising from personal and family history.” Along with budgeting, lending and technical assistance, this approach can help people can break deeply embedded patterns and step onto the path to building financial stability and generational wealth.
The excerpt below was originally published on Nonprofit Quarterly:
Changing the Economic Game in Rural America: Overcoming Financial Trauma
By Joseph Ceasar, Director of Legacy Institute for Financial Education (LIFE)
According to the US Census Bureau, rural America accounts for 97 percent of the country’s land but only 19.3 percent of the population. Such low population density creates challenges for many rural areas, including fewer careers that pay livable wages and higher concentrations of people with disabilities. Often, the result is rural poverty. As of 2019, an estimated 15.4 percent of rural residents lived below the poverty line, compared to 11.9 percent of urban and suburban residents.
The organization where I work, Legacy Institute for Financial Education (LIFE), is based in Angelina County, Texas, the most populous county in the nearly 10,000-square-mile Deep East Texas region, located north and east of Houston and west of Louisiana. Deep East Texas is known for its rich natural resources, such as freshwater lakes for fishing and pine forests for hunting. It supports a population of over 380,000 residents, 21 percent of whom live in poverty, 15 percent of whom are Black, and 15 percent Latinx. Lufkin and Nacogdoches are the largest cities within the region and are separated by only 20 miles.
Despite the region’s beauty and resources, it faces pervasive challenges. Over the past 10 years, several large employers have closed, leaving thousands of long-time employees with unique skill sets without jobs and adding pressure to an already challenging job market. Many of these workers are now dealing with the stresses of chronic financial setbacks, such as underemployment, income poverty, and other financial trauma.
The Impact of Financial Post-Traumatic Stress Disorder
When thinking of trauma, domestic violence, war, sexual assault, or the death of a loved one usually come to mind. Only recently have we come to view financial trauma as a phenomenon that needs to be addressed. Now that researchers and psychologists are on notice, the pendulum has swung in the opposite direction. For example, a recent Forbes article claimed that “financial trauma is a reality for one third of millennials.” Only a few years ago, such financial stressors were not measured; now, over 30 percent of an entire generation is estimated to have been affected by them.
Symptoms of financial PTSD include avoidant behaviors, disbelief in one’s financial security, substance abuse, perception of living in a hostile environment, and a constant feeling of not having enough, even when that is not the case. Combined with other forms of PTSD, such as the cultural PTSD that is a legacy of slavery (eg, distrust within the Black community, expectation of failure, constant belief that “the system” is against them), financial PTSD is a recipe for disaster. Children from the same neighborhood can attend the same school, take the same courses, and even earn the same grades, but students who have been exposed to multiple generations of financial trauma will be more susceptible to stressors such as teenage pregnancy, committing a felony, or making short-sighted and self-destructive decisions that could have a life-long impact on their financial well-being.
Dr. Galen Buckwalter, a research psychologist, identified a few stressors that lead to financial PTSD, including living at least three months without income adequate to meet one’s expenses. Indeed, while there are many financial stressors, the inability to make ends meet is paramount. In rural communities, given high rates of disability, scarce job opportunities, and a higher likelihood of being born into a family that suffers from poverty, we can expect many children to grow up with constant exposure to financial trauma.
In rural communities, such as Deep East Texas, financial post-traumatic stress disorder (PTSD) is a major perpetuator of generational poverty; rural BIPOC communities are disproportionately and systematically affected.
Breaking the Cycle: The Vital Role of Trauma Informed Care
Based in Lufkin, the Legacy Institute for Financial Education has a mission to economically mobilize disadvantaged populations by teaching financial literacy, creating economic stability, and building generational wealth. Our Financial Opportunity Center, which delivers services using a model developed and supported by the Local Initiatives Support Corporation (LISC), is a key tool with which to address the symptoms of financial trauma.
When doing this work, it is important to take into consideration each person’s unique childhood environments, their experiences as adults, and other social determinants of health. Humans are complicated. No framework can explain every situation. Identifying the factors that contribute to an individual’s financial personality, we have found, is more akin to algebra than simple math. Nevertheless, our experiences show that the predominant and reoccurring variable that accompanies short-sighted financial behavior is the family/social environment during childhood.
In rural areas, as in cities, people often reproduce the behavioral patterns they grow up with. Children who see their parents neglect debt payments, lie to creditors, protect their Social Security disability benefits at all costs, or view the type of car they drive as a primary measure of success—are at high risk of suffering from financial trauma.
Our ability to recognize the symptoms of financial trauma and allow the people we work with to tell their stories has informed our trauma informed care approach. Imposing a narrative on an individual can be one of the most destructive methods of treating any form of trauma, including financial PTSD, so we do our best to avoid it.
Usually, when people first come to our organization, they have an immediate emergency. They are typically scared, stressed, and seeking solutions. Our team helps them to navigate their immediate crisis and identify other crises that may be on the horizon through a wrap-around services model that includes budgeting tools, income support, and employment coaching. We believe this form of care is effective and necessary for practitioners who seek to address poverty and financial trauma.
