It is so common to feel embarrassment and shame over financial struggles. Money has become a trivial topic that everyone avoids, even in our own homes. No one wants to talk about the pile of debt they're facing or how stressed they are about having more month left when the money is gone. On top of all that, there is the pressure to appear successful, to "keep up with the Jones'".
Many people struggle with finances, regardless of background or income. I can't tell you how many times I've heard, "We make a great income, but we still live paycheck to paycheck." YOU ARE NOT ALONE.
If you can relate, keep reading. In this post, you will find actionable steps you can take to understand and overcome the shame and embarrassment you feel.
Understanding Financial Shame
What financial shame looks like?
There are many behaviors that you may be exhibiting because of shame and guild over your finances. Do you avoid talking about money with friends and especially family? Do you avoid talking about finances in your own home, with your spouse? Maybe you even hide purchases or lie about what you've spent. All of these things stem from the shame and embarrassment you are feeling.
Why does financial shame happen?
Many people feel embarrassed about their lack of financial education. Many of us were never taught the basics of finance in school, and our parents may never have taught us about money. If you're like me, money was not discussed when I was growing up. If something finance related came up, there was tension or an argument. I learned that money was stressful, and I certainly never learned how to manage money is a healthy way.
Societal pressure is a huge cause of financial shame. We feel the need to appear successful with the nice car, nice house, or the nicest phone. Whether it is conscious or unconscious, we are constantly comparing ourselves to what others have, and we think we should have that same life. Social media has only accelerated this. As we scroll through the highlight reels of everyone else's lives, we feel guilt and shame that our life isn't as "good" as what we see on social media.
All of this takes an incredible emotional toll on you. It causes guilt and stress in your life. Often, financial stress is the main cause of anxiety. It affects how you feel as well as your relationships. It affects your marriage and your family. Even if you hide the financial stress from your kids, I promise they still feel the tension.
You are not alone
Americans have racked up a staggering $1.17 Trillion in credit card debt, and another $1.7 trillion in student loan debt. (Source: Lending Tree)
69% of American households have less than $1000 in savings, and 34% have $0 in savings.
On top of all that, 76% of millenials are not financially literate. (Source: Savology)
These statistics are simply to show you that you are not alone. An incredible amount of Americans are carrying a debt load that weighs on them. People are living paycheck to paycheck, behind on bills, and struggling. You are not alone, but you can do something about it.
Story Time
My husband and I used to feel a lot of guilt and shame over our finances. We had a great income but were still living paycheck to paycheck, constantly juggling debt payments, and completely frustrated with our lack of progress. We avoided talking about money, and when we were forced to, it always ended in a heated argument.
When we finally decided to make a change, we were all in. We built our first budget together using the EveryDollar budgeting app. We committed to changing our spending habits and the way we communicate about money. We aligned with our goals and laid out a plan to pay off our debt.
As we continued on this journey, we noticed changes in more than just our finances. Not only were we no longer living paycheck to paycheck and making huge progress on our debt, we were also becoming closer in our relationship. We felt incredible stress relief as we learned to follow the budget. Now, years later, we are completely debt free with a fully funded emergency fund of 5 months of expenses. We talk about money daily in a healthy way. Our stress over money has completely dissolved.
You have the power to make changes.
Your financial struggles don't define your worth. The car you drive and the house you live in and those fancy vacations don't matter if it means carrying debt that is dragging you down. Your self worth and the peace you feel is more important than anything.
Identifying where you are now is simply a starting point. It is the first step on the path of financial peace. Following a budget is not restrictive, it is empowering. It gives you control over your money. You get to make these changes. You get to decide.
Practical Steps to Overcome Financial Shame
Acknowledge the problem without judgement. Write down your financial concerns and make clear financial goals. Be honest about your current situation. Bringing awareness of your current finances is the first step.
Seek knowledge and support. Educate yourself through books, blogs, podcasts, or courses. Work with a financial coach or join a supportive community. These are ways you can learn and have accountability through your financial journey.
Create a plan to take control. Start with small steps like budgeting and tracking spending. Begin cutting back on unnecessary expenses. Set realistic and clear financial goals and celebrate your progress along the way.
Communicate openly. Talk to your spouse or family members about your financial concerns as well as the goals you've set. Build trust in your relationship by being completely transparent and non-judgemental. These are the first steps to improving your relationship in your marriage and with money.
When you make these changes, you will see immediate improvement in your mental health with reduced stress and anxiety. You will build a stronger relationship in your marriage with more trust and open communication. When emergencies happen, you will feel confident in making the right decision and face financial challenges head on.
“The path to success is to take massive, determined action.” - Tony Robbins
You have the power to rewrite your financial story. Make the decision and take the first steps on the path of change.
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