Have your feelings about money affected your relationships or caused you to put off important money tasks? If so, a recent study from Coast Capital suggests you too may be stuck in a cycle of financial shame. You could be among more than a third (36%) of Canadians who are.
But it doesn't have to be that way. Here, what it means to deal with financial shame and experts suggest how to get out of it.
When financial shame becomes part of your identity
Financial trauma researcher and educator Chantelle Chapman describes financial shame as a “huge emotion” associated with money that becomes part of a person's identity. People who experience “financial guilt” may feel bad about credit card debt, but Chapman says they can still maintain confidence in other areas, such as investing. suggest.
Not so with financial shame.
“Financial shame would be like, 'I have credit card debt, I'm bad with money.' It's like my identity,” Chapman said in an interview. Ta. Yahoo Finance Canada.
As the CEO and co-founder of a financial literacy program called money traumaChapman found that financial shame felt like “the threat of abandonment.”
“I feel like everyone is pushing me away. I feel like I'm being kicked out of the group,” she said.
In addition to debt, financial shame often has to do with a person's income and whether they own a home, Chapman said. But she says there are many reasons why those feelings arise, and they can vary by gender and generational experience.
The effects of financial shame
According to Chapman, financial shame is often a cycle, as it involves two common behaviors that lead to worse financial outcomes. The first is avoidance.
“They'll avoid conversations about money, they'll avoid filing taxes, they'll avoid looking at their bills,” she says.
This is in line with a Coast Capital survey that revealed 63 per cent of Canadians are taking steps to avoid dealing with their finances. These measures include postponing financial goals, avoiding discussing money with family and friends, and avoiding situations that involve purchasing decisions.
Another common behavior, Chapman said, is compulsive behaviors such as hoarding and overspending.
“And they choose to do this because they are looking for a way to ease the pain of financial shame or to distract themselves,” she says.
The effects of financial shame can extend far beyond your finances. More than half of Canadians report that financial shame not only affects their relationships, but also their mental and emotional well-being, according to a study by Coast Capital. The study was conducted by the Angus Reid Forum from November 1 to November 4 and is based on a survey of 1,512 Canadian adults.
Steps to break the cycle of financial shame
Chapman says the first step to overcoming financial shame is identifying it and naming it. Don't just say that you're bad at spending money. Instead, be clear about what's really going on and limit the shame to specific situations.
“So it's like, 'I feel embarrassed that I want to raise my rates, but I'm scared to do it in case I lose customers,'” Chapman says. he says.
“It helps reduce the impact.”
Next, Chapman says it's important to “depersonalize” shame. She points out that shame can come from a variety of sources, including generational, societal, and institutional. So ask yourself this. “Whose shame is this?”
“Once you know where it's coming from, you can easily depersonalize it.”
Finally, Chapman says it's time to take action, starting with conversations with trusted friends, family, and financial professionals.
“Be aware of what happens to your nervous system and the power of shame when you open up and talk about it in a safe space,” she said.
Chapman says following these steps will give you more agency to choose a different path and break free from behaviors that promote shame cycles.
Don't associate your wealth with your worth
For many Canadians, choosing a different path comes down to “analysis and budgeting,” says Xin Lu, a wealth planner at Coast Capital Investment Management.
Start by tracking your spending, perhaps on a weekly or monthly basis to fully understand the situation. Next, determine your priorities and how much funding you want to allocate to each priority.
But most importantly, Lou tries to remind customers that “it's not about the money.”
“Money is a means to an end,” Lu said in an interview. Yahoo Finance Canada. “So let's take a step back and talk about what your life has been like so far and where you want it to be in five, 10, 15, 20 years. And get there. Let’s talk about how money can help you.”
Farhan Devji is a freelance journalist and published author based in Vancouver. You can follow him on Twitter @farhandevji.
