Letting go of Guilt & Shame in Your Finances
By: Jen Smith
Tags: Guilt, Frugal Living, Shame, Debt, Student Loans

Facing your debt and the rest of your finances can be an emotional roller coaster.

The way you earn, save, and spend money is a result of your history and experiences with it. And for most of us, that history is tainted by guilt and shame for the mistakes we’ve made or ones that were made for us.

My first job out of college paid $10 an hour. It was a job in my field, using my master’s degree. I went home every day and looked at the $50K of student loans I owed and felt hopeless. Soon it started to give me anxiety, and I stopped looking.

I felt so stupid for taking out so much debt. Eventually, I gave up trying to pay them off and lowered my payments to $30 a month.

For two years I made $30 monthly payments. I got a better job, moved out of my mom’s house, and even followed frugal living tips I read online but still believed I couldn’t afford to pay more on my loans. The whole time I carried the guilt and shame of thinking “I shouldn’t be buying [insert anything here], I should be paying off my student loans.”

But I, like most millennials, ignored it, and let it fester to the point where having student loans was normal. Everyone else had them, so I could too. I believed the lie that “I’ve been like everyone else my whole life and I’ve gotten by just fine, so it’s good enough for my future too.”

The guilt and shame came up again once I started paying off my debt. I felt guilty about every purchase, even if it was in the budget. Everytime I messed up I felt shameful, like I wasn’t capable of doing it.

I learned it’s easy to try to stay normal. It’s hard to become someone you don’t know how to be.

Paying off debt takes courage like you wouldn’t believe. You’ll be different, you’ll be doing things that are different, and not everyone in your life will be OK with it.

So it’s essential that you’re mentally strong going into it. And that means letting go of the guilt and shame that are inherently wrapped up in your money mindset.

Letting Go of Guilt

Guilt is the feeling of having done wrong or made a mistake. A healthy relationship with guilt is actually good — it allows us to have empathy for others. An unhealthy level of guilt can cause an unrelenting amount of pain.

Anyone who’s ever had money has made a financial mistake. Maybe it’s small like a habit of impulse spending, or putting all your appliance purchases on payments. Maybe it’s something bigger like being trapped in a cycle of payday loans or buying more house than you can afford.

We can often feel like our debt rules how we identify ourselves in regards to money. But you are not your debt, you don’t have to be the person who took on that debt. Stop rationalizing your actions, take responsibility, and forgive yourself.

I wish it were as easy as telling you to stop feeling the negative consequences of guilt and use it to grow, but it’s not. So here are some ways you can come to terms with it:

Write down one of your financial mistakes and what was going on in your life when you made it. Include how you felt about yourself and others involved. Analyze what your needs were at the time, if they were being met, and if not, why? Identify the catalyst for your behavior. Were you going to college? Going through a divorce? Dealing with low self-esteem? Evaluate how you’re judging yourself. Are you comparing yourself or seeking approval from successful family members or wealthy friends? What standards do you want to use to judge yourself? Is there information you have now that you didn’t have then? What do you wish you’d known then? What did you learn from the experience, including the aftermath, and how would you handle it differently today?

I did this when coming to terms with my student loans. I felt great when I signed for them! I needed a graduate degree to do what I loved, and in my arrogance, I did no research and decided to get my degree no matter the cost.

I didn’t fully understand compound interest, and I can’t help but hate the guidance counselor who let 19-year-old me sign for so much money without explaining it. I also didn’t know there wouldn’t be many jobs in my field when I graduated. But I forgave myself for not doing enough research or having information that wasn’t available to me. And now, I don’t regret taking out those loans in the slightest.

They got me to where I needed to be and helped bring me to where I am today. I wouldn’t have half of the great things in my life today without those student loans. I’m proud of myself today, but it took time, hard work, and a lot of introspection to get there. And now, not only have I learned from my financial mistakes; I’m also able to empathize with others who’ve made the same ones.

Every mistake we make is an opportunity to one day help someone else avoid or work through the same mistake.

Even if it feels silly and awkward, share your experience and what you’re learning. It’s an opportunity to set you on a path to growth that you wouldn’t have started otherwise. And don’t let feelings of guilt persuade you into feeling sorry for yourself. You are exactly where you were meant to be right now and as long as you stay committed, you have the opportunity to grow exponentially through this debt-free journey.

Letting Go of Shame

Shame is different from guilt. Shame is a painful feeling of inadequacy. Or as famed researcher Dr. Brene Brown puts it:

Guilt is “I made a mistake.”

Shame is “I am a mistake.”

While guilt can be healthy if it teaches you a lesson and helps you empathize with others, there is no healthy level of shame. Shame leads to feeling trapped, isolated, and powerless.

In her research, Dr. Brown has found that there are four elements to building resilience to shame:

Recognize shame and its physical (heart racing, chest tightness, etc.) triggers. We often feel shame physically before we realize it mentally. Recognize the external factors that led to your feeling of shame. See the link between what you’re feeling and society’s often-conflicting and shaming expectations. Connect with others to receive and offer empathy. Do the hard task of reaching out for support. Discuss and deconstruct the feelings of shame. Separate shame from other emotions.

Identify the people in your life who make you feel like you’re not skilled enough to accomplish this or you don’t deserve to succeed. Recognize how they make you feel and talk about it with others. Don’t keep shame in the dark.

We’re conditioned to think we have to do everything and do it perfectly so we don’t look weak. But there’s no way to be successful on that mission. You will mess up, life will ruin your plan, but the beautiful thing about life is that you can revise the plan and move on.

If you’re feeling shame about your financial situation, or any part of your life, don’t sweep it under the rug or try to get by on your might. Build resilience to shame so you can get through the tough times even when you’re not feeling 100%.

Jen Smith is the is the writer behind ModernFrugality.com, cohost of the Frugal Friends Podcast, and author of three books including Pay Off Your Debt For Good, from which this excerpt is from.