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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