What is Money Shame?

Money Shame is the intensely painful feeling or experience of believing that you’re flawed and therefore unworthy of love and belonging. This feeling is usually based on our bank account balances, our debts, our homes, our cars, and our job title.

My understanding of Money Shame stems from my own relationship with it. I simultaneously hid my spending behaviors while telling the people close to me to make changes. Their problems were more serious, I reasoned.

But ultimately, all of this hiding and finger pointing led to a terrible event that changed my perspective forever: my brother Keith’s suicide over his own Money Shame. This is something I spoke at length about in my TED talk about Money Shame.

This singular irreversible event not only changed my perspective on money, but changed my perspective on life.

It also inspired me to realign my work with a new purpose – helping others heal their Money Shame, rebuild personal and financial confidence, and avoid going down a similar path as my brother.

The truth is that you don’t have to reach that point. You have options, and my goal is to help you identify and exercise them.

What does Money Shame look like?

Money shame causing painful feelings for a young manYou probably recognize conflict with money all around you. Maybe even in yourself. For that matter, let’s examine a couple examples together.

Example 1: The neighbor who makes good money, but you never see him spend it.

Most of us would agree that being frugal is a positive habit. But as with anything, you have to dig beneath the surface to find out what’s really going on.

What if you discovered your frugal neighbor has two failed marriages, largely resulting from his control issues with money? He won’t let his family enjoy the occasional dinner out. He insists his wife shouldn’t have to work outside the home, because he wants everyone to know he is a competent provider.

Money only causes him worry, and he doesn’t see it as a conduit for joy or fun. Instead of pride in how much money he has, he feels fear that if he doesn’t keep an iron grip, it will leave him, too. This is a classic case of Money Shame.

Example 2: The neighbor who holds an entry level job, but you always see her spending money.

Across the street, another neighbor who works an entry level job has a brand new luxury car. In fact, if memory serves you correctly… she trades her car in every two years for a brand new one. She also sends all three kids to private school, and hosts the neighborhood Christmas party.

The parents are hard workers, and you rarely see them, especially since they returned from vacation last month. Even with long hours, you wonder how they can afford it all.

As with your first neighbor, the truth is often concealed beneath the surface. What if you learned these flashy neighbors are drowning in debt, paying enormous interest rates on multiple credit cards to keep their lifestyle going?

They have discussed cutting their spending before, but ultimately decided it would be too painful — or shameful — to sell their nice cars, forego their vacations, and give up their lifestyle.

Moreover, they would feel like failures if they had to pull their kids out of private school. They work hard, after all, so don’t they deserve these things? Besides, they can afford the minimum payments on their cards – so why not at least “maintain” until the kids go off to college?

Here again, we have a classic case of Money Shame.

A Money Shame Epidemic?

The truth is, your neighbors are typical Americans. And you likely are wondering about them in the context of your own relationship with money. Hey, it’s human nature to be interested in how the other guy is doing!

Well, here’s the truth: The families in these scenarios couldn’t be more different, but they both exhibit behaviors that stem from Money Shame – and this is what they will need to focus on first.

The difference between guilt and shame.

As a side note, it’s important to understand the difference between guilt and shame.

Guilt is a state of feeling bad about something specific you did. Shame, however, is a state of feeling like YOU are bad, wrong, or damaged in some fundamental way. Whereas guilt lends itself to apologizing, forgiving, and forgetting; shame is a more damaging feeling to harbor about oneself.

This is why recognizing and taking action on your Money Shame *must always be the first step* in every financial plan. You can talk 401K’s and saving accounts until you are blue in the face, but if you have underlying Money Shame that has gone unaddressed, I can tell you from experience that you’ll be fighting an uphill battle.

How Do You Know If You Have Money Shame?

There are varying degrees, of course. Money Shame manifests itself in your spending habits when:

  • You can’t stop spending it, or you can’t spend it.
  • You obsess over where it comes from, where it goes, and how to control it.
  • You show it off by treating everyone to dinner and making elaborate purchases while drowning in debt.
  • You drive a fancy car when your budget is more Honda.
  • Or you hide your money and don’t want anyone else to know how much you have.
  • You operate from a mindset of lack. You can’t help others or you might not have enough.

We’ve all heard that it’s possible to live comfortably on even a modest salary with planning. And we know people who do.

We also know some can’t manage money, no matter how much they make. I’m talking about educated, professional, disciplined people. And by being comfortable, I don’t just mean able to pay for the things you want and need, although that’s certainly part of it.

Where does Money Shame come from?

We all know the things we’re supposed to do—to live below our means, to budget, to save, to invest. And we beat ourselves up when we spend money we don’t have, but we feel powerless to stop it.

After working with thousands of people across the financial spectrum, I’m here to tell you that your money habits are informed by a series of events that started when you were a kid.

If you struggle to manage and be at peace with your finances, it stems from fear of money. And common to everyone I’ve worked with, this fear is rooted in Money Shame.

  • You are embarrassed by what you don’t know.
  • You are embarrassed by what you do know, but don’t implement.
  • You feel guilt, humiliation, and shame about your spending habits.
  • You use money to make yourself feel better in an addictive way that is ultimately, punishing.

I started to notice a common thread with my clients. While everyone manifests their rocky relationship with money differently, it always begins with a similar series of events that lead to Money Shame.

I’ve found this pattern to be similar regardless of gender, race, how much money you make, and pretty much any other socio-economic qualifier you can come up with.

The Circle of “Money Pain”

I call it the Circle of Money Pain and the steps go like this:

  • Inherited Beliefs
  • Emotional pain and trauma
  • Resentments
  • Lack of forgiveness
  • Need to relieve pain
  • Self-harm through money

Can’t Live With It, Can’t Live Without It

Money Shame is avoidable, but money itself is unavoidable. You have to have a relationship with it to carry on in this thing we call life. Money is also a leading cause of stress in relationships. It is a leading cause of divorce, addiction, illness, and suicide.

We put up a shroud of secrecy around money because it’s private. We are conflicted by how much we need it and embarrassed when it eludes us. Talking about money is the worst! How much you make, what you spend it on, and what you want to buy with it can never be brought up in polite company.

You might as well ask your coworkers what they think about sex on a weeknight. You’re already supposed to know what is appropriate and have your own plan for that kind of thing. Right?

That neighbor up to his eyeballs in debt may be in denial that he has a problem. He tells himself, it’s between him and the bank. Besides, he might rationalize that this is how everyone does it. Don’t we all deserve the biggest house we can afford and the best for our families?

Money secrecy means he can tuck those thoughts away. No one is going to call him out on it, but the silence perpetuates the shame.

Healing Your Relationship With Money

I’ve been open about my own relationship with money and how even as a high earner, I was a compulsive shopper. My wealth was something I took great pride in. At least in my mind I “had it together,” and I was the person my family called when they needed bailing out. I resented that anyone should tell me how to spend since I clearly knew how to make money. But I found myself buying things I didn’t need to excess.

To ease our pain, we spend, eat, drink, and engage in other addictive behaviors, but in the process, we dig new holes that perpetuate our need for relief.

Money is an always-accessible way to numb, to act out, and to prove your point. Your bad relationship is no longer about the person who hurt you, but about money. You beat yourself up, saying things like, “I’m so bad with money.”

Breaking the Cycle of Money Shame

Regardless of where your Money Shame came from, it doesn’t have to be a self-fulfilling prophecy. But it does have to be identified and tamed so you can bring a healthy mind, spirit, and soul back into your finances.

To break the cycle, you have to unearth your story. You can’t fix your thoughts around money until you understand where those thoughts are coming from. I’d love to help you on your journey. Reach out to me anytime here and let’s rewrite your money story.

The stakes are high, and the sooner you begin, the sooner you’ll feel that burden lifted.

Tammy Lally

Tammy Lally

I BELIEVE MONEY IS NOT YOUR WORTH. Tammy Lally is an author, speaker, and Certified Money Coach (CMC). She helps others master their finances by first conquering their emotions around money, then by creating a comprehensive financial plan. She brings decades of experience and endless love to her bulletproof process for money mastery. She is the author of the book Money Detox, and her TED talk on Money Shame has over 2 million views.

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