The Importance of Talking About Money Shame for Financial Wellbeing

The Importance of Talking About Money Shame for Financial Wellbeing

For many of us, money can be a source of stress, anxiety, and even shame. In fact, I’d dare to say that we’ve all felt this way about our finances to some degree at one stage or another. So if you currently find yourself feeling ashamed of your financial situation or choices, the important thing to know first of all is that you are not alone.

Since launching Abeona Wealth in late 2020 I have spoken with people in a wide array of financial situations. I have met brave and courageous individuals who are taking the first step to financial wellness. But shame about money decisions has been a theme that arises time and time again, no matter how outwardly successful a person might seem.

Shame is one of the most common and powerful emotions associated with money. It stops people in their tracks and causes avoidance and stagnation. It becomes a vicious cycle, and the next thing you know your taxes are overdue, your retirement plan is virtually non-existent, and you are paralyzed into inaction. The last thing you feel like doing is talking about things.

So let’s circle back to the most important thing to remember as you start to take back control of your financial situation: You are not alone.

Money Shame Affects Us All at Some Stage

In talking about money and investing with my clients, prospects, and friends, I have heard many commonalities that run through their financial stories:

“I should not have handed over all of the financial decision making to my spouse. Now we’re divorced, and I am in a much worse financial position than I thought I was in. And, my instincts turned out to be right!”

“I lost track of my spending and am now in thousands of dollars in debt. I can’t believe I let myself do this.”

“I didn’t know what to do about my retirement account, so I just didn’t touch it other than putting money in from my paycheck. Now I realize it hasn’t been invested and I’ve missed out on the past several years of growth.”

“I’m scared to look at my spending habits because I’m afraid of what it will show.”

Differentiate Between Shame and Guilt

Shame researcher Brené Brown differentiates between shame and guilt, writing, “I believe that guilt is adaptive and helpful – it’s holding something we’ve done or failed to do up against our values and feeling psychological discomfort.” She adds further that, “I think shame is much more likely to be a source of destructive, hurtful behavior than the solution or cure.”

When shame takes over, we often stick our heads in the sand and focus on other things, never addressing what needs to be done to get back on track. We’re hard-wired to utilize various avoidance tactics when encountering something that is anxiety provoking or uncomfortable. But the important thing to remember is not to let past money decisions send you into a shame spiral and prevent you from moving forward.

In my experience with women investors, shame about past decisions gets paired with the well-documented confidence gap between women and men and the inertia gets even stronger. Sometimes, even for highly educated executive women, the task of understanding investments and what is needed to prepare for retirement seems overwhelming. Women are completely capable of understanding investments and finances, but oftentimes, the financial industry and our society unfortunately don’t offer that mindset.

Understand Your Money Story

It can be all too easy to fall into the trap of feeling overwhelmed and ashamed about money. We berate ourselves for not having it all together. When we get stuck in this mindset though, it’s important to understand that there are numerous differing threads that run through our financial stories, and our feelings of being “bad” with money can go all the way back to our childhood.

As money coach Tammy Lally explains in a Tedx Talk on the subject, “Our self-destructive and self-defeating financial behaviors are not driven by our rational, logical minds. They are a product of our subconscious belief systems, rooted in our childhoods and so deeply ingrained in us that they shape the way we deal with money our entire adult lives.”

We all grow up with an awareness that people either have either more or less money than us, and it can impact our behavioural patterns. As we age, we are subjected to an onslaught of influences and the modern dilemma of “keeping up with the Joneses”. But this can create a kind of shame that has a paralyzing effect on our psyches and our daily lives.

We have a tendency to blame ourselves if we aren’t keeping up with our peers. When we shame ourselves for our financial decision-making or current financial situation, we can feel incapable of making any changes.

Tammy Lally developed her own definition of “money shame,” and says that we can understand it as being “the intensely painful feeling or experience of believing that we are flawed—and therefore unworthy of love and belonging based on our bank account balances, our debts, our homes, our cars, and our job titles.”

In order to turn the page on this chapter of our money story, we need to allow ourselves to see and be seen. To talk and be truly heard. To listen, understand, and find strength in our shared commonalities.

Make a Positive Action Plan

In order to move forward, you need to learn how to cope with your money shame in a way that allows it to lessen over time. It’s about bringing a level of consciousness and awareness to your spending and saving, so you only spend money on things that truly enrich your life, and not on things that bring feelings of guilt or shame.

So, where do you start?

The first step is to understand where you are and where you want to go. Do you want to provide for your children’s college at a private institution? Retire early and have enough assets to support you without touching retirement accounts or social security early? Buy a vacation home? Travel the world (post-pandemic, of course)? Don’t let shame or a lack of confidence keep you from exploring what is possible and living the life that you want to live.

As you consider what stage you’re in today, and start thinking about your plans for the future, let go of any shame or guilt so often attached to where you stand today so that you can dream big. When people can take a thoughtful and honest appraisal of their current financial situation, they can embrace their ideas about the future, with a sense of freedom and optimism. A healthy relationship with your money is more important than how much money you make.

Build a Strong Support System

Money shame can affect our self-esteem and can impair our willingness to seek help. But the more we open up, the less isolated and ashamed we will feel. I guarantee that you know people who have made the same financial decisions or been in the same position as you at some point in their lives.

Having an accountability system can make all the difference. Make sure you have a good support system, and if you need help, don’t be afraid to reach out to someone you trust, or seek professional guidance. Taking that first step can feel as insurmountable as climbing Everest, but once it’s done, you’ll feel on top of the world.

At Abeona Wealth, I help my clients figure out the best next step to get them started on their own journey toward financial wellness. Past decisions are not judged, and we focus on learning what to do differently to put you in a better financial position. I take pride in serving as a guide, here to support you as you reclaim your own financial story and ensure it has a happy ending.

If you are ready to take the next step, contact me for a free consultation. Together we can understand your inner thoughts and early experiences about money, and ensure you have the right tools in place to ensure you don’t fall back into a negative money mindset again.

Investment management services are provided by Navigate Wealth Management, a registered investment adviser. Information herein is intended for discussion and consideration and may make a number of simplifying assumptions. Consult a financial, legal, or tax advisor for specific recommendations for a personal situation.

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