10 Useful Steps To Addressing Your Financial Shame - We All Have It!
Financial Shame -
We All
Have It!
Financial shame runs deep and has many faces, such as asking your brother for financial support, hiding debt from your partner, earning less than your partner, spending money on clothes you never wear, and not having retirement savings despite being a high income earner. Not only is there financial shame, there is also the shame around having financial shame (“I shouldn’t complain when other people are in a worse financial position than I am” or “I should have known better. I can only blame myself”)! The shame for believing you are the only one with financial shame! Where does it end?
While some may feel shame more acutely or frequently, no one is impervious to shame. In my experience, shame is the feeling most often associated with finances - even more so than stress. So while financial shame feels lonely, especially as you scroll through Instagram to see your former college roommate on yet another vacation, you are far from alone in your financial shame.
Financial Shame Among High Net Worth Individuals and High Income Earners:
There is an all too common misconception that the more money you have or earn the less financial anxiety and shame you have. However, high net worth and high income individuals can experience these same emotions just as intensely. Earning or inheriting a lot of money does not automatically equate to more financial knowledge or to a healthier relationship with money. Doctors, lawyers, and other high income individuals may feel shame due to being in an unstable financial position (spending beyond their means, lacking any savings, etc.) or due to having a higher education yet no financial knowledge (just because you are a dentist or software engineer does not mean you automatically know how to manage your personal finances). Inheritors of wealth may feel shame due to not having earned their wealth or due to not living up to their parents’ expectations. Shame is shame regardless of your wealth.
10 Steps to Addressing Financial Shame
1. Lead with self compassion.
There are several ways to practice self-compassion. First, you can reduce self-blame by acknowledging the nuance of your situation. While you do play a part in your current financial picture, so does intergenerational wealth (or lack thereof), non-existent financial education on a national level, and employment discrimination based on race, ability, sexual orientation, etc. You are just one piece of your financial puzzle.
Second, understand that changing your financial habits and your overall financial wellness takes time, and be gentle with yourself when you have setbacks. Setbacks are a normal and expected part of the process.
Finally, try to understand your situation differently by reframing your experience. Take a look at the following examples of reframing and notice how reframing your experience is filled with self-compassion.
Examples of Cognitive Reframing
“I am a terrible partner for hiding my credit card debt.” →
“I hid my credit card debt from my partner, because I was afraid they would leave me. I am going to be honest with them about my past and present credit card debt moving forward, and I know that rebuilding trust may take time.”
“I waste money on clothes I never wear.” →
“I have purchased clothes in the past that I never wear. I built a habit of emotionally spending during Covid as a coping mechanism. While I cannot change these past decisions, this is a habit I would like to change.”
“I cannot pay my bills without my brother’s financial support.” →
“I am grateful for my brother’s financial support and am proud of myself for being vulnerable and asking for help when I need it. I won’t need his financial support forever.”
“I have a high paying job and I don’t have any savings.” →
“I do not currently have any savings. However, I have a high paying job, so fortunately, with some time, focus, and financial education, I can start to build a savings.”
2. Understand the source of your shame.
Shame can be self-imposed, influenced by expectations placed on us by our parents, friends, society, culture, religion, etc. Shame can also be directly stated or placed on us by others (friends, family, colleagues). Understanding the source of your shame can help you to focus your healing.
Where and who is this financial shame coming from?
What triggers my shame?
Who is the voice of shame in my head?
3. Identify your motivators.
Financial shame does not motivate us. Rather, financial shame holds us back from making change and keeps us stuck in cycles we so desperately want to break. Look towards the future and consider your goals - both financial and emotional. Financial goals may include buying a home, eliminating debt, supporting your parents in their retirement, etc. Emotional goals may include learning how to enjoy spending money on yourself, not feeling trapped in your job, increasing your self-confidence in money management, etc. Use these goals, instead of shame, as positive drivers of change.
What motivates me in other areas of my life?
How can I apply these motivators to my financial life?
4. Let go of your financial shame.
Easier said than done of course! Letting go of financial shame may feel challenging, impossible even. Whereas, holding on to financial shame may feel comforting, familiar. When operating from a place of shame, we are often applying morality to objective situations.
For example, if you are emotionally spending, you may think “I am bad.” The focus, in this case, is on the self rather than the action. Emotionally spending is not inherently shameful. Emotional spending may result in credit card debt, and credit card debt is also not inherently shameful. You are not bad, because you have debt.
Practice differentiating your actions from your self.
Regularly remind yourself that your actions do not define you.
5. Reduce feelings of loneliness.
Societally, we rarely talk about personal finances with one another, so we certainly do not share our deepest financial shames. This can lead to intense feelings of loneliness. Seek out stories of others who have made financial mistakes. You will find that others have made the exact same financial mistakes you have. You will also find that others have made completely different financial mistakes, which can highlight financial strengths you unknowingly have. Either way, you will start to feel less lonely knowing that we have all made mistakes.
Check out Reddit - worst financial mistakes
Read about The Top 10 Most Common Financial Mistakes. If you have an uncommon financial mistake, someone else has it too. It just may be a little harder to find them.
6. Share your financial shame.
People often do not share their shame for fear of judgment. Holding the shame as a secret only adds more fuel to the fire. Speaking your shame, on the other hand, helps relieve you of both the secret and the shame, and more often than not, the shame feels worse and bigger than the situation itself. Also, speaking your shame, invites others to share their shame.
Practice saying your financial shame aloud by yourself.
Identify a trustworthy and understanding friend, relative, colleague, financial therapist, or mental health therapist who you can confide in.
Explain your hopes and expectations for how they will respond to you.
7. Increase your financial knowledge.
Increasing your specific financial knowledge (for example, understanding the difference between a Traditional IRA and a Roth IRA) can be empowering and motivating. Increased financial knowledge does not mean that you will never make another financial mistake, but you will feel increased confidence in your future financial decision making, ultimately reducing additional financial shame from arising.
Increasing your overall knowledge of common financial experiences and trends (for example, the average and median amount people have saved for retirement by age or stock market trends) can help to normalize your experience (you may be doing better than you think! And if not, you now have helpful rules of thumb in setting financial goals) and to understand your situation differently.
Be careful not to let your newfound knowledge make you be more critical of your past mistakes. Instead, use the knowledge to propel you forward.
Read I Will Teach You To Be Rich by Ramit Sethi for general financial education.
Read The Simple Path to Wealth by JL Collins to increase your knowledge of investing.
Listen to Stacking Deeds to learn more about home buying.
8. Seek professional support.
While not a necessary step in addressing financial shame, if you think you could benefit from professional support, consider working with the following professionals -
Certified Financial Therapist (CFT) - you can also Google “financial therapist near me”
9. Look towards the future.
Dwelling on past financial behaviors and choices can lead to increased feelings of shame. However, typically, thinking about the future does not stir up the same feelings. Remember that your financial past does not dictate your financial future. Your financial present does not even dictate your financial future! It is never too late to start saving, investing, or paying down debt. It is never too late to change your career, buy a home, or start building intergenerational wealth for your family. It is also never too late to reduce your financial anxiety or to increase your financial wellness. Everyone is deserving of financial safety and security.
What is the smallest financial change I can make today to change the trajectory of my financial future?
10. Finally, embrace your financial mistakes as a part of your financial journey!
This step is the last step as it will likely take the most time and self-reflection to achieve. You can overcome whatever financial blunders may have occurred. Everyone, including Warren Buffet and Oprah - two of the wealthiest people in the world, has made financial mistakes. Do not let your mistakes define you. Use your financial shame as a learning opportunity and space for growth.
What is one thing that I am grateful that I learned from my past financial mistakes?
A Note To Therapists Carrying Financial Shame
The majority of us were never required to take a business class in graduate school. When you have a private practice, you are a business owner. It is a disservice that we were never provided formal guidance on the business and financial components of having a private practice. After all, the more you are in control of your business and your personal finances, the more present you will be for your clients. If you feel afraid to start a private practice or feel overwhelmed by your private practice, consider working with a financial therapist, bookkeeper, tax assistant, business consultant, etc. to get organized and to feel more confident in the business side of your private practice.
