Feeling Ashamed About Your Finances? Here's How to Overcome It

Let me start with a confession. I may write about personal finance, but I don't always make good money decisions. I've used my credit card to buy flights I can't afford. I've dipped into my savings to buy things I don't need. I often pick up the bill for drinks even when it stretches my budget. Some of those decisions were driven by shame, others are sources of shame. None of them help me much in terms of building wealth.

The good thing about this job is that I have learned I'm not alone. Indeed, I know a lot of people who are ashamed of aspects of their finances. The other good thing about writing about money is that I've learned how to make more decisions that strengthen my financial position over time. Here are some of the ways you can do the same.

What is money shame?

A lot of money advice centers around practical steps you can take. (I'm carefully not using the dreaded "should" word.) You're told to make a budget, avoid debt, put money into your emergency fund, and plan for your old age. It's all logical, and most of us know that living within our means would make life easier. But there are often psychological factors that stop us from doing those things. Shame plays a large part.

Money shame is a painful feeling of embarrassment or distress caused by aspects of our financial lives. It can show itself in different forms. Some people feel ashamed that they don't have as much money as their peers, while others feel guilty that they have too much. Some are ashamed of their debt or believe they can't manage their money and don't want to tell anyone.

Ignoring those feelings can push us into a vicious cycle. When we're ashamed about our finances, we might cover up those feelings by, say, buying things we don't need, splurging on nights out, or taking on debt. This can make us more ashamed and more likely to spend more. Money issues can contribute to stress, addiction, and depression.

How to overcome money shame

The biggest step to getting past feelings of shame around your finances is to recognize them. Try to understand why you feel ashamed and why you have trouble, say, sticking to a budget. In a TED Talk, money coach Tammy Lally, said, "We have to get honest with each other that we're suffering with money issues, and let's get real -- we have to stop numbing out our pain." Here are three steps to take.

1. Share how you feel about money

It isn't always easy to talk about money. I have a friend who has shared bedroom stories that would make you blush, but doesn't tell anyone about her credit card debt. Unfortunately, like many negative feelings, shame grows stronger in silence. See if you can start a conversation about money with people you trust. If you're not ready to talk to friends or family, look for supportive communities online or even consider professional help.

When you start to drag those uncomfortable feelings into the light, you might discover that other people have had similar experiences. You might find they also worry about their bank account balances and spending habits. They might tell you how they overcame their own money stresses. Talking can be a powerful tool.

2. Understand your money triggers

Think about what's behind your money shame. We often have deep-seated beliefs about ourselves that we don't question -- maybe we grew up being told we were bad at math and that's stopping us from making a budget. Or perhaps we overspend because we don't feel confident. Maybe you are ashamed of carrying a credit card balance and think people will judge you for it.

Try to separate your bank balance and money habits from your feelings of worth. If you are in debt or are living paycheck to paycheck, it doesn't say anything about who you are as a person. Not only that, but that balance isn't set in stone, and those habits can change. When you're conscious of the sources of your financial shame, you can build a different relationship with money.

3. Focus on ways to move forward

As you explore what you're feeling, think about how you can change the narrative. If you believe you can't budget, would an online tutorial ease the fear a little? Or might a budgeting app help? If you know what triggers any impulse purchases, how can you break that cycle? You might not manage it every time, but small changes add up.

Here's the thing: We weren't born knowing how to manage money. And like everything else in life, we will make mistakes. Try to be compassionate with yourself and don't spend energy on what has already happened. Instead, think about the choices you can make today that will make a difference to your finances tomorrow.

Bottom line

Shame is a horrible feeling. Whether it's about money or other aspects of life, it can consume us. The good news is that you can break the cycle. You can push shame out of the driver's seat. In fact, when you are able to understand what's making you ashamed, and even forgive yourself, you can start to do things differently.