Why we feel money shame, and what you can do about it

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Experiencing financial hardship is isolating, stressful and overwhelming — and it’s hard not to feel personally responsible, even when it’s not your fault.

What makes things worse is not knowing where to turn. Even though personal finance issues are the top cause of stress amongst Australians, it’s something we almost never talk about.

We went to the experts to understand why people find it so difficult to talk about finances, and when you’re having problems, what are the things you can do to make the difficult conversations easier?

Why is it so hard to talk about money?

Sarah Brown-Shaw, a senior financial counsellor at the National Debt Helpline, says people dealing with financial stress often feel ashamed, judged and embarrassed.Dealing with financial disasterFinancial ruin can destroy people. Find out how people have made their way through the shock and trauma of finding themselves in a financial mess, and got themselves back on track.Read more

One of the reasons, she says, is we’re often unbelievably hard on ourselves when it comes to managing money.

“People often feel that they have to deal with it all themselves. They put pressure on themselves to be better at managing money, and blame themselves for the situation they’re in,” she says.

“But we overwhelmingly find that people are in this situation through no fault of their own.”

Some people hide their problems from their loved ones until they no longer can — when the bankruptcy notice has been served and the sheriff is coming to repossess the house.Want to get on top of your finances?There’s plenty about how to navigate money problems and the world of finance on ABC Life’s Money page.Read more

Another reason, according to Debbie Joffe Ellis, a psychologist and professor at New York’s Columbia University, is we often equate “success” with career and material possessions.

“The media and literature and society tell us overtly and covertly that you’re more special when you’ve got more and spend more,” Dr Joffe Ellis says.

When financial and career success is the yardstick we all measure ourselves by, it can feel devastating when things aren’t working out.

On top of that, we often fall into the habit of ruminating or “catastrophising” about our money problems, Dr Joffe Ellis says, which only makes things worse.

Money stress and your brain

The chronic stress and emotional upheaval that goes with financial hardship is powerful enough to change the brain, says Nicolas Cherbuin, who runs a brain imaging lab at the Centre for Research on Ageing, Health and Wellbeing at the Australian National University.Digging yourself out of early 20s credit card debtHolidays, spending sprees, living above your means… sound familiar? Our youthful money habits can play havoc in later life, but all hope is not lost.Read more

In a recent research project, Dr Cherbuin and his colleagues showed that people who reported dealing with financial hardship — such as going without meals or accessing welfare services — had differences in the brain and were more prone to depressive symptoms.

“We focused on two specific regions, the hippocampus, which is implicated in dementia and Alzheimer’s disease, and the amygdala, which we know is involved in mood disorders and emotional regulation,” Dr Cherbuin, who leads the ANU centre, says.

“We found that, in these people, greater financial hardship was associated with lower volumes of these regions.”

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While researchers can’t be sure of the causes for the brain changes, the chronic stress associated with financial hardship may have a role to play.

“Hormones like cortisol are good in small quantities, but if our body and our brain are repeatedly exposed to them, we know that it makes the brain changes and certain areas shrink,” Dr Cherbuin says.

“People in their middle age [with smaller volumes in these brain regions] … might be less able to modulate their emotions well, and feel as good as they might otherwise.”

What you can do about it

Preparing for a difficult conversation about money

  • Prepare. Before you talk to your family, consider speaking to a financial counsellor (the service is free and confidential) or another professional. If there is a risk of violence, contact a support service such as WIRE or the Men’s Referral Service before taking any action.
  • Ask yourself: Will you be putting yourself at risk by having the conversation? Is it the right time? Do you have support?
  • Plan for the worst case as well as the best. Speaking about your problems can help, but the conversation might not go as planned. Think about what you might do if it ends badly.
  • Be honest. Don’t present your situation as better or worse than it is. Be prepared to answer any questions.
  • Present a plan. Tell your loved ones what you are going to do. A financial counsellor can help you with a debt plan. If gambling, drug and alcohol is an issue, talk about plans for recovery.
  • Remember, continuing to put things off, and letting the bills pile up unopened, isn’t a solution.

Source: Brian Kerr, financial counsellor, National Debt Helpline

It’s never easy to talk about something you’re struggling with, especially if it’s money. But, there are some things that can help.

If you’re dealing with a financial problem and aren’t prepared to open to anyone in your immediate circle, consider reaching out to a financial counsellor. 

“A problem shared is a problem halved. It can be a huge relief to talk to a financial counsellor. And then, feeling more empowered, to take the next step,” Sarah Brown-Shaw says.

If someone you know or you suspect that someone in your life is having problems with money, empathy can go a long way, Ms Brown-Shaw adds. But be mindful that you almost certainly don’t know the whole story.‘Do something you’re going to stick to’: Three methods of budgetingWhen it comes to budgeting, it’s important to find a method that works for you. So, we’ve looked at the pros and cons of three common methods you can use to do a budget.Read more

But, often, opening up with people close to you can be a relief.

Dr Joffe Ellis suggests thinking about how you would react if the person you loved the most had lost some money.

“Would you love them less? No, you probably wouldn’t, because you love them unconditionally,” she says.

“So why do it to yourself?”