Against Financial Shaming
Shame over money choices doesn't help anyone.
Personal finance can be a touchy subject. Because personal finance is personal. Everyone has different goals, needs, circumstances and a unique relationship with money. And because there are so many ideas of what people should or shouldn’t be doing with their money, people can feel guilty when they make a different choice, especially when that choice has negative consequences.
People can feel guilty about a bad choice they’ve made with their money. But when they internalize their bad choices and start thinking of themselves as fundamentally bad, guilt becomes shame. While guilt may be isolated to a single incident, shame is pervasive.
Shame can create a negative relationship with money, which can create a spiraling effect that can cause more bad decisions. These bad decisions can negatively affect your self-worth, because we often attach our worth to our income or our net worth. Even the term net worth can make it hard to separate it from our worth as people. It’s bad enough that people feel shame when they make wrong choices with their money. It’s much worse when that shame is fueled by others. Financial shaming is problematic for several reasons:
1. Money is Already Taboo
Money is already a taboo subject. It’s one of the topics we’re socialized not to talk about growing up, and because of this, money is often secret. Shaming people about their financial choices just compounds this issue. This secrecy makes money shame more likely, as there are few outlets to discuss financial issues in a non-judgemental manner.
2. Money Management is Hard
Money management isn’t intuitive. Budgeting, saving and investing aren’t things everyone is naturally good at. Many of us aren’t taught how to be good with money, and making mistakes is normal. Money shame can lead us to believe we’re uniquely bad with money, but this is rarely the case. Almost everyone struggles with money in some area.
3. It’s Unproductive
Shame is usually a bad way to get someone to change their behavior. Unsolicited advice is hard enough to take, but if someone is shamed for the choices they make, it can be even harder to listen. Money shame causes people to internalize guilt over their choices. When someone internalizes their guilt, they start to think of themselves as bad with money, which perpetuates the cycle. You can’t shame someone into adopting good money habits.
4. It Ignores Systemic Issues
Systemic inequalities can prevent people from saving money, building wealth and spending frugally. This needs to be taken into account when evaluating any financial behavior. A lot of financial difficulties are due to factors beyond one’s control. Repeatedly denying that systemic inequalities exist can increase the shame people feel about money as they fail to live up to expectations set by more privileged people. Financial education can only go so far when systemic issues create obstacles for people, especially marginalized groups.
What Money Shame Looks Like
People can feel shame when they can’t adequately live up to expectations about spending habits, debt, income, net worth and more. Conventional financial advice says we should have 3 to 6 months of expenses in an emergency fund, avoid high-interest rate debt, save for retirement, etc. I advocate all of these things and think they’re universally good pieces of advice, but when people are unable to accomplish them due to various factors, the resulting shame can be destructive.
People can feel shame about debt, whether it’s credit card debt, student loans, auto loans, personal loans and more. Money shame can also come in the form of lifestyle inflation as we try to keep up appearances in our social circles. Shame can cause us to spend more than we can afford, and not because the spending is aligned with our values, but because we want to feel accepted.
People are often shamed for spending habits and blamed for their financial woes regardless of whether one led to the other. The idea that Millennials buying lattes or eating avocado toast is the reason they can’t afford homes has become something of a meme. It should be noted that your latte or avocado spending is not why you can’t afford a home. Expenses like these are a small drop in the bucket compared to what would be necessary to save for a home or retirement. But more than that, the idea that people aren’t allowed to enjoy nice things unless they are rich is a fundamental issue with money-shaming media.
Shame can come from financial gurus and personalities. Some, like Dave Ramsey, build their entire brand around financial shaming. Personal responsibility is often invoked as a lazy excuse to use cruel shaming tactics regardless of why people make decisions in the first place. A lack of compassion for those who make mistakes only makes shame worse.
Money shame comes in many forms, but it can be overcome.
How to Feel Less Shame About Money
A lot of money shame stems from the money scripts we’ve developed in our childhood. Everyone follows money scripts; often unconscious beliefs about money that guide our financial decisions. These can be beliefs such as:
Talking about money is rude.
People with money are bad.
You should spend money when you have it.
When I have x amount of money, I’ll be happy.
These scripts can lead to a negative relationship with money and are difficult to escape. But escaping your negative money scripts is important to feeling less shame about money.
Everyone should try to identify the cause of their money shame. Identify the money scripts you follow and events in your past that may have caused you to adopt them. Consider whether they are helping you reach your goals or hindering your progress.
Another way to beat shame is to learn more about money. While personal finance can be intimidating, it can also be empowering to know how to manage your money better. Most of us aren’t taught personal finance in school. And because money is secret, we often don’t learn money management from parents — or learn from their mistakes. That’s why once you learn more about money, it can help to start talking about it. Demystifying money will give you more confidence.
As you begin to educate yourself about money, you can start making adjustments. You can know where to put money for different goals, how to invest for the first time, and how to pay off and stay out of debt.
You should feel comfortable ignoring conventional wisdom about money if it makes financial sense for you. Your behavior should align with your goals and values. If you enjoy spending on something, give yourself permission to spend without feeling shame.
Finally, don’t beat yourself up and learn to have compassion for yourself when you make mistakes. Making mistakes with money doesn’t make you a bad person. Everyone makes mistakes, and sometimes those mistakes are due to factors outside your control. By rejecting shame, you can give yourself room to make mistakes and learn from them. Then you can forge a healthier relationship with money.