Do you feel ashamed about your finances? Here’s how to move forward

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Earlier in my career, I spent some time working with people experiencing financial hardship. It wasn’t uncommon for people to break into tears.

Sometimes, they were tears of exhaustion, hopelessness, or despair. But often, there was something else underneath all of that. Something far heavier.

In the years since, having talked to hundreds about their finances, and having heard that same heaviness across different income levels, professions, and net worths, I now know what it is: shame.

Simon LetchCredit: Simon Letch

Shame about the mistakes of the past, about being at a certain age and not having “figured this out” yet, about needing to ask for help, about being behind their peers.

The underlying narrative is often the same: “I should be further ahead, have it together by now, or should have known better.” “I am bad with money. There’s something wrong with me.”

We can hardly blame people for feeling financial shame. You don’t have to look far to find financial commentary that calls people lazy or irresponsible if they struggle to save money or haven’t achieved specific milestones by a certain age.

Financial shame doesn’t have to be a cross you bear for the rest of your life.

But the research is clear. Financial shame doesn’t help, it hurts.

Research published in the Journal of Organisational Behaviour and Human Decision Processes in 2021 found that “shame induces financial withdrawal, which increases the probability of counterproductive financial decisions that only deepen one’s financial hardship”.

Shame also drives secrecy to avoid the potential judgment that might come if others knew, making it hard to ask for the help that could lead to positive improvement.

With this in mind, maybe the road to financial wellbeing doesn’t start with practical skills, apps and spreadsheets, budgets or calculators, or even financial literacy. Maybe it starts with unpacking the emotional baggage that inhibits people from looking at their financial situation.

So, if you’re struggling with financial shame, these things can help you move forward:

1. Normalise financial mistakes. When it comes to money, people prefer to talk about their successes and not their failures. This can create the illusion that everyone else around you is doing better than you.

This is the perfect condition for shame to thrive. It becomes easy to believe that you are somehow the only one who has messed up, and therefore must be defective in some way.

I have had the privilege to hear people of all walks of life share their financial stories. And I can promise you, everyone has financial problems and has made financial mistakes.

I have worked with financial professionals who made terrible investment mistakes, high-income earners who are in debt, with little savings, and millionaires who are riddled with financial anxiety.

No one’s financial journey is mistake-free. So, your mistakes aren’t unique or special. They’re normal.

2. Start talking (or writing) about money. Brene Brown is an author who became known for her work on shame. She says there are three ingredients that grow shame exponentially: secrecy, silence and judgment. The antidote, she suggests, is empathy.

So, this can be a tough step, but an incredibly cathartic one. Find someone in your life who you trust and feel safe with enough to share your financial shame with. It can be a close friend or family member. Or you can engage a therapist.

Here, the important part is not sharing the financial details of what happened, but rather the feelings that you carry. How much debt you’re in isn’t as relevant as how it makes you feel.

If you aren’t comfortable sharing with another person yet, start by writing down your feelings in a journal. You might be surprised to discover just how much heaviness you’re hanging onto.

3. Explore where you learnt “shame”. You weren’t born shaming yourself. There’s a good chance it’s a learnt behaviour.

Maybe you grew up in an environment where you learnt mistakes are bad, you should feel bad for making them, and they deserve to be punished.

Contrast that to an environment where mistakes were seen as human, there was no need to beat yourself up for making them, as long as you took it as an opportunity for learning. Which environment is more likely to lead to feeling a lot of shame over making mistakes?

The goal is not to blame your past, but simply recognise that you may have internalised or learnt a certain belief system from your external environment which you can now unlearn.

Financial shame doesn’t have to be a cross you bear for the rest of your life.

In fact, the irony is that the more shame you feel, the more that shame gets in the way of you progressing towards the financial success that you believe would free you from your shame.

So, the road to financial wellbeing starts with forgiving your past, accepting your current situation without judgment, and deciding you are capable of creating a better financial future.

Paridhi Jain is the founder of SkilledSmart, which helps adults learn to manage, save and invest their money through financial education courses and classes.

• Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.

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