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Financial Shame

February 15, 2024

Recently a client came into our office who had been suffering from sleepless nights due to stress about their finances.

It is a situation which had been developing for over 10 years, starting from the age of 20 when he took a payday loan to afford a holiday with friends. A payday loan he didn’t need to take, which led to a consequence he didn’t anticipate.

What followed on from that one action was a dangerous pattern of overspending, payday loans and a lack of understanding of how this can have an impact on the future. Taking the loan was a fairly easy process and our client commented on how it felt like ‘free money’, although age and hindsight made it clear that it was not. Now in a steadier position with a healthy salary and new fiancé, our client has come to us riddled with guilt, fear, and shame that the consequences from these past decisions will never go away.

This is something we see all the time. Clients experiencing financial shame. Shame that is so powerful that it stays locked away. Ignored. Pushed down and out of view until it becomes so overwhelming, it is affecting your sleep.

This is not an uncommon experience. It is pretty much a guarantee that 99% of the people you know will have made a financial decision that they are embarrassed by. That they never speak about or are willing to admit to. For some this will be so intense, and the consequences so big, that they become fearful they will never be able to recover financially.

But if financial missteps are common, why are we afraid to talk about them? Where does this deep feeling of financial shame come from? To better understand shame we asked Lianne Weaver, Managing Director at Beam Development and Training Ltd, to tell us a bit about more about this all too common human emotion.

Understanding Shame

Shame is a universal emotion and yet it is possibly the emotion we talk about the least. By its very nature, shame causes us to hide our feelings. In fact, the origin of the word shame comes from “to cover” or “to hide”.

Shame is something most of us have experienced at some point in our lives. Whether we feel we have not aligned our behaviours with our moral compass and values, or whether someone else has caused us to feel ashamed, shame is triggered when we feel our worth has been lowered in the eyes of others or ourselves.

Dr Brene Brown, one of the world’s leading authorities on shame, describes shame as “lethal” highlighting how shame is connected to addiction, eating disorders, self harm, bullying and suicide. Through Brown’s research, she states that in order for us to feel shame and for it to persist within our lives it needs three components; secrecy, silence and judgement.

Shame is a painful emotion with the primary purpose of hiding who you really are because it doesn’t measure up with who you think you are supposed to be. You relate to it as feeling like you’re not good enough. It could manifest itself as a worry that something is wrong with you. Or it may be associated with overwhelming thoughts of inadequacy, imperfection, or insignificance.

These intense feelings mean that we keep our shame to ourselves, giving it the silence it needs to thrive. Within the silence judgement forms. Self judgement of what we’ve done and the assumption of judgement we believe others will make of us it they knew our secret. No one is free from the trap of shame.  

understanding shame

Shame and Money

When we consider shame, we can perhaps see how we have felt shame about our bodies, culture, intelligence, but we do not often consider how we could be carrying shame in terms of our finances.

Our relationship with money tends to be an emotional one. One which we have often inherited views and beliefs about from our parents or other influential adults. Views which start forming from a very young age. Some may have been told “money is the root of all evil” or may feel that having too much or too little is a reflection on their own worth. These inherited beliefs will lay the groundwork for our future relationship with money. A relationship which develops under the added stresses of comparison, consumerism, and competition.

For our client, his other friends seemed to afford their holiday very easily. Taking the payday loan was his way of keeping up with his peers to not be seen as missing out because he could not afford it. He firmly believed that his friends would think less of him if he couldn’t pay to go. He was not concerned about their view of the payday loan as he never told them about it. He didn’t want to be judged by them so, in turn, he secretly and silently judged himself.

The Root of Financial Shame

To truly tackle the root of financial shame, you must understand your relationship with money. Knowing what informs your decisions around what you spend it on will help you suss out if your decisions align with your real wants. Are you financing a fancy car because the make and model matters to you? Or are you doing it because it makes you look flash to others?

flash car

If the answer is the latter, is it the best decision for you financially? Putting yourself into debt for something that matters more to other people than it does to you will likely induce shame.

Another element to consider is the benefit of a plan to focus on. If you are working towards a specific financial goal, this can motivate you to be more mindful of your spending. Once your finances are aligned with that goal, and the actions you take in support of it, you can work to minimise the feelings of shame.

It is also important to start talking about it. If money is a subject not often spoken openly about and shame is an emotion we tend to hide, it is no wonder financial shame is so pervasive in our world. Not only that but comparing ourselves to others in terms of finances is practically ingrained in our society. And if shame is triggered when we feel our worth has been lowered in the eyes of others or ourselves, it’s a perfect storm.

Overcoming Financial Shame

So how do you overcome it? By bringing it to light. Remember, the origin of the word shame comes from “to cover” or “to hide.” Shame can only survive if you keep it secret. That’s how it gets you. Something happens that makes you feel inadequate or less then. You keep it to yourself because you cannot face revealing it as others, or you yourself, might judge you for it. You never release the shame.

But if you talk about it, realise you are not judged, you are not alone and there is a solution, it lifts the curtain of shame and allows you to start making progress. This was how it worked for our client. At the next meeting he reported feeling less stress and was no longer passing self-judgement for the errors of his youth. And perhaps best of all, he was sleeping easier.

There will be a long, systematic road ahead to pay down the debt but having made a full financial plan he knows this is possible. He just needs to stay the course. A course that will put him on the path to live the life he wants, not the life he was forced to lead by living with his shame rather than releasing it. 


By Jill Rensing 
with special thanks to Lianne Weaver for her contributions to this article on what shame is. 

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