An escalating number of Canadians are grappling with financial shame, a situation that is negatively affecting their personal finance management and social relations. Around 36% acknowledge that their financial emotions have severely impeded critical financial responsibilities and affected personal relationships.
Chantel Chapman, a financial trauma specialist, characterizes the underlying problem as ‘financial shame’, a psychological response molding a person’s self-identity around money. This term differs from ‘financial guilt,’ as shame kindles ongoing negative self-criticality, while guilt may induce regret but does not diminish a person’s hopefulness for future fiscal stability.
Struggling with financial shame can often lead to fear of criticism or rejection, amplifying feelings of guilt and worthlessness. Often, these individuals retreat into silence, maintaining their struggles as a secret. However, Chapman emphasizes that it’s critical for such individuals to seek help from professionals like advisors, budget coaches, and debt management services, and at times, open up to trusted friends or family.
Financial shame typically results in a destructive cycle marked by two behaviors: evasion and overspending or obsessive accumulation.
Understanding and combating financial shame
Evasion involves avoiding monetary talks, deferring tax matters, or shrugging off financial statements. Chapman indicates that 63% of Canadians confirmed evading their fiscal responsibilities in one way or another. Alternatively, overspending, or obsessive accumulation, translates into extreme consumerism or an unhealthy dependence on wealth building as a self-coinage mechanism.
The cycle of financial shame not only negatively affects personal relationships and overall well-being but also impedes the development of essential skills needed for effective financial management. Breaking this cycle would require fostering an open discourse about financial matters, obtaining professional guidance, and cultivating healthy financial habits and strategies.
To diminish this cycle’s effects and regain monetary wellness, Chapman recommends several strategies, including understanding and labeling financial shame and seeking help through open and transparent discussions about financial matters. Undertaking regular financial discussion groups or workshops can also instill a healthy perspective towards money matters.
Lastly, becoming financially literate can ease feelings of shame and inadequacy. She further underlines the importance of seeking professional help from financial advisors, credit counselors, or mental health professionals when required, thereby allowing a gradual recovery from the damaging effects of financial shame.
