Have you ever felt shame because of your financial situation?

Last weekend I was at the pharmacy when my debit card was declined. I knew I had money in my account, plenty to cover the cost of my $2 medication, but for some reason my card kept getting rejected.

The first time the card reader rejected my card, I thought it was a fluke. But after the third attempt, the cashier asked me if I had another form of payment and I felt my face turn bright red.

I did in fact have cash and credit cards, but that didn’t stop me from feeling embarrassed and judged. I was also feeling flustered as my 10-month-old was now crying and a line had begun to form behind me. 

I completed my transaction, got home, and immediately contacted my bank to figure out what the issue was with my card. As it turns out, I had been using the wrong pin.

As embarrassing as it was to find out that my bank was well aware that I had attempted to use my card at the pharmacy, it was also incredibly relieving to know that my card hadn’t been rejected due to insufficient funds. 

While I could take a breath for a second and relax knowing that there was nothing wrong with my account, I also realized I still have plenty of work to do when it comes to money wounds because this little trip to the pharmacy ended up being quite triggering.

Money is Emotional Not Just Dollars And Cents

One of the biggest lessons I’ve learned on my debt free journey with DebtWave is that our finances are 90 percent psychology and 10 percent math

In other words, figuring out what your income is, tracking what you spend, and making sure that what you spend is always less than what you earn, would be pretty easy if it wasn’t for our emotions. Which is why working on your mental health is as crucial to your financial journey as building wealth is.

One of the biggest emotions impacting those with debt? Shame. 

But as Nathan Astle MFT, CFT-I, certified financial therapist, marriage and family therapist, and a client financial counselor at Beyond Finance, so eloquently put it: Debt is something you have; it’s not what you are.

Astle says when you experience something like your credit card being declined, we often feel it’s more of a “reflection of our character or self-worth rather than a mistake with the bank.”

Embarrassment, confusion, anger, or shame may race through your mind.

“You aren’t alone if you’ve noticed those emotional responses when something like this happens,” Astle said. “Our finances are inherently emotional pieces of our lives, and the difficult emotions felt around things like debt can be exacerbated by financial trauma.”

What Exactly is Financial Trauma?

Trauma is a response to an emotionally triggering event. Financial trauma is the emotional response to an event or series of events around money. 

As Dr. Galen Buckwater puts it, financial trauma is, “the physical, emotional, and cognitive deficits people experience when they cannot cope with either abrupt financial loss or the chronic stress of having inadequate financial resources.” 

In other words, it’s financially traumatic to experience a sudden loss of income and it’s financially traumatic to feel as if you can never keep up with your expenses.

Unfortunately, financial trauma is not uncommon. In fact, about one third of millennials experience it. 

What are some signs of financial trauma?

• Chronic financial anxiety (things like overspending, avoidance, etc.)
• Negative thought patterns around money
• Physical stress over social outings, out of fear of spending money
• Limiting beliefs around money
• Isolating from relationships, out of fear of spending money

What can cause financial trauma?

• Inheritance of toxic money beliefs
• Chronic debt
• The sudden loss of a job
• The loss of a home
• Unstable income
• A chronic inability to pay all of the bills
• Low-wage work
• Entering the job market during a global pandemic and recession

Healing Financial Shame On Your Debt Free Journey

As anyone who has been on a debt payoff journey knows, there is more to struggling with debt than figuring out how to pay it off. 

When you’re on a debt free journey and you’re paying off thousands of dollars of debt, it’s a good opportunity to figure out how to heal our money wounds as well. We have to ask ourselves important questions to untangle from any financial difficulty response, such as:

• How do I regulate my emotions differently outside of financial solutions?
• How can I enjoy what I buy when I feel guilty or irresponsible when I spend?
• What does it mean to have “healthy spending”?
• Why do specific financial discussions trigger such negative emotions?
• What makes me feel so much shame when I get into debt?

These are common questions to consider when improving your relationship with your money. Yet, understanding how debt makes you feel is necessary before those questions are answered, Astle said.

Especially when you are on a debt payoff journey, continue identifying your money traumas, which could look like writing down each time you feel stress in the context of money. The more specific, the better. Write how you are feeling, what triggered the feeling, and your thoughts as you experience the stress.

Once you have a better understanding of the emotions connected to debt, you can do your best to avoid the triggers that create those complex feelings, Astle explained.

“Financial structure is crucial for overcoming debt difficulties. It provides stability when our nervous systems urge more reactive financial behaviors. 

“Building structure, like creating a budget or a spending tracker, helps us note proper behaviors. That structure provides stability. Consider personal budget apps, worksheets, or using pen and paper to track your spending.”

Another tip? Reconceptualize financial self-care and make sure when you are stressed out and wanting to buy some clothes, take out, or something we’ve had in our Amazon cart for a few days, that you have an alternative way to alleviate that stress without spending money.

“This kind of work is important, especially for those who may have heard as a child “we don’t have the money,” Astle said. In this case, we may have a mistaken belief that we will never have the money we need as adults.

By doing this work we are figuring out our thoughts and beliefs around money and from there we can figure out what mistaken thoughts and beliefs need to be deconstructed and corrected. We are also learning to not use debt as a factor when determining our self-worth.

“Recognize when money issues appear and decide what applies,” Astle said. 

“As my colleague at Beyond Finance always says, ‘Debt is an inside job.’ As we tackle the financial and emotional challenges of debt, we can begin healing from damaging money messages that get in our way,” Astle said.

12 Tips for Coping With Financial Shame

There are various strategies that can help you cope with the effects of financial shame. Healing and self-improvement are often challenging, so be gentle with yourself as you figure out which methods work best for you.

1. Embrace your worth

You are not your job title, bank account, or debt. You are a beautiful spirit with unique gifts and talents to offer the world. Connect with your deepest and highest self through mindfulness practices such as meditation, deep breathing, and yoga to separate from ego (your mind’s understanding of who you are).

2. Seek support 

Talking about your financial challenges with friends, family, or professional therapists can lead to better problem-solving and more assistance, resources, and opportunities.

3. Seek a financial advisor

Seek out a financial advisor, financial planner, debt consolidation counselor, or other type of financial consultant. Even if you are financially literate, the advice of an expert can be invaluable.

4. Manage stress 

Stress management is crucial, so maintain proper sleep, hydration, exercise, nutrition, and self-care.

5. Decrease shame 

Due to the shame and stigma associated with trauma and financial struggles, many people suffer in silence. Know you are not alone, and help is available.

6. Identify your triggers 

Knowing what people, places, or things might trigger your money trauma can help you anticipate the minefield and plan your coping strategies.

7. Practice self-compassion

Honor your financial traumas and how they may have impacted you emotionally, spiritually, and financially. Stop self-blame and harsh self-judgment. View past challenges as opportunities for learning, growth, and increased resilience.

8. Apply mindfulness to your financial life

Stop second-guessing the past or worrying about the future. Avoid “future tripping” or writing fiction about the unknown future. You can be responsive rather than reactive in financial actions.

9. Shift from a scarcity mindset to abundant thinking

Shifting from a scarcity mindset to an abundance mindset opens doors to possibilities, collaborations, celebrating the successes of others, and greater prosperity.

10. Practice healthy detachment

Practice healthy detachment strategies to combat financial fears so you can forge ahead with clarity and persistence.

11. Rewrite your money story

Narrative therapy suggests we are the authors of our life stories. Appreciate the power of self-fulfilling prophecy and restructure catastrophic thinking to positive and affirming messages that you can and will succeed financially.

12. Set healthy financial boundaries in your relationships

 Use assertive communication to set financial limits with your friends, partner, kids, and anyone with whom you have a financial relationship.