Breaking Financial Shame

Have you felt embarrassed or guilty about your financial situation? You could be experiencing financial shame. A 2021 article in the Journal of Organisational Behaviour and Human Decision Processes describes how financial shame can lead people to avoid financial information, creating a vicious cycle that increases financial hardship. Below are some tips for breaking financial shame. 

What Exactly Is Financial Shame

Financial shame is a feeling of embarrassment or guilt related to one’s financial situation or behavior. It can stem from various factors, such as debt, lack of savings, or financial mistakes. It can also be internalized or come from societal or cultural pressures. Unfortunately, It can be a barrier to seeking help or making positive changes in your financial life.

Evidence Of Financial Shame

Financial shame can manifest in a variety of ways. For example, it may prevent someone from discussing their financial situation with others, even if they could benefit from help or advice. It can also cause someone to hide their financial struggles by refusing to open bills or bank statements. This can lead to avoiding seeking help, such as from a financial coach or counselor, and can lead to a downward spiral of financial problems.

Additionally, financial shame can result from societal or cultural pressure to have a certain level of wealth or financial stability. This can lead to feelings of inadequacy or failure, even if someone’s financial situation is not significantly different from that of others around or close to them.

Recognize Financial Shame for What It Is

It’s important to acknowledge that financial shame is usual, especially in a society that values wealth and success. But it is also important to understand that it can be overcome. Below are several tips to help you break financial shame.

Seek Help and Support

Don’t be afraid to contact a financial coach, counselor, or financial professional. They can provide the tools and information you need to improve your financial situation and help you overcome financial shame.

Educate Yourself About Personal Finance

The more you know about personal finance, the more you will feel in control of your financial situation. Read books, take classes, or find online resources to help you understand the basics of personal finance.

Set Financial Goals

Setting financial goals, such as paying off a credit card balance or saving a certain amount of money, can help you feel a sense of accomplishment and boost your confidence. Remember to craft your goals using the SMART acronym (Specific, Measurable, Actionable, Realistic, and have a Time Constraint). If you make your goals SMART, you will better goals and be able to achieve them. 

Practice Self-Compassion

Be kind and understanding to yourself and practice self-compassion. Remember that mistakes in general, and financial mistakes specifically, are a part of life, and everyone makes them. Don’t beat yourself up; remember that you can always learn from your mistakes and improve. Use your past mistakes as a learning opportunity and commit to improving your financial habits. Try to focus on what you can do to improve your situation rather than dwelling on past mistakes.

Surround Yourself with Supportive People

Surround yourself with people who will support and encourage you rather than judge or shame you for your financial situation. If friends and the people you currently associate with are not supportive, you may need to find some new people to connect with.

Steps to Breaking Financial Shame

Breaking the cycle of financial shame can be difficult, but there are several steps you can take to help. First, acknowledge your feelings and recognize that feeling ashamed about your financial situation is regular and that you are not alone. Next, be honest with yourself and take an honest look at your financial situation and identify the areas where you may have made mistakes. Thirdly, create a plan to address your financial situation, including steps to reduce debt, increase income, and create a budget. Finally, act and follow through with your plan and take action to improve your financial situation.

Breaking financial shame is not easy, but it is possible. By doing the things above, you can take control of your financial situation and overcome financial shame. Remember that financial mistakes are a part of life, and you are not alone in this journey.

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Why You Need a Financial Coach

Financial coaching

I was listening to a podcast, and the topic was teaching financial literacy in high school. According to the podcast, currently, 21 states now have personal finance coursework requirements in their high schools. Overall, 45 states require some form of finance instruction in their K-12 standards.

The podcast was interesting to me as I think I took a course in high school, but I really do not remember it….that was a long time ago. Studies have shown that though financial education in schools is important, it doesn’t always predict financial literacy among adults. For example, even though I took a course, I did not know what a mortgage was until I had one. I have been very blessed to make financial mistakes and still able to overcome them. I have made a lot of financial mistakes.

As I listened to the podcast, I thought of all the people who, like me, had to learn the hard way to manage money. Through mistakes and experience, some learned, and some did not. And this drives me to educate others about finances and coach and counsel people to make better financial decisions.

Why a Financial Coach

Financial coaches work with you over time and help you create short and long-term financial goals. They meet with you regularly and give suggestions and exercises to help you explore your values and meet your financial goals. Coaches also discuss ways to stay on track and ask how developed plans and strategies are working.

Financial coaches provide advice and encouragement in a client driven process. Financial coaching is not designed to be a therapeutic relationship or to aid clients in a more acute crisis resolution. That is where financial counseling comes into play.

The Value of a Financial Coach

The great value in coaching is the ongoing relationship and not just one or two appointments. A coach is a sounding board, your accountability partner, your brainstorming partner, and cheerleader. Financial coaches support you as you reach for financial goals creating healthy financial habits.

You determine your goals with help from your coach. Together, you and your coach map out action steps and time frames. And knowing you must check in with your coach helps prompt you to complete those steps. Studies report the effectiveness of financial coaching.

When to Seek a Financial Coach

If you are ready to look to your financial future.

•           You have goals like buying a car, a home, or a realistic spending plan.

•           You are ready to commit to the ongoing work.

•           You’re ready to welcome support in your efforts.

Coaches give vision to the team. They direct and lead the team. Coaches push and pull and bring out the best in the team. And as a financial coach, I provide the same for my clients.