All Things Financial Planning Blog

The current economic environment has prompted quite a buzz about the link between how we think (our brain) and the way we live with our money. I know that my beliefs and feelings about money have shaped the way I spend, save (or not) and share my financial resources. Often I find that I must do quite a bit of self-talk prior to making financial decisions, since I am not always good at putting my financial well-being first – you know the “pay yourself first” thing. I also know from my own experience, as well as in my work with clients, that there is often so much shame around financial choices and behaviors that people sometimes have difficulty changing their money behaviors, even when they desperately want to make better choices.

Right now I am reading “Mind over Money: Overcoming the Money Disorders that Threaten our Financial Health” by Drs. Ted and Brad Klontz and find their assertion that “[financial] information is not enough” absolutely true for the majority of people I meet. People who are intelligent, hard working, resourceful, creative, and able to overcome significant challenges in other areas of their lives often are taken to their knees when faced with financial difficulties. Now more than ever I find myself having conversations with people who never believed they would have money troubles. The look on their faces is undeniable – they are ashamed. After all, shouldn’t they have known better?

I have never believed shame to be a good motivator and I think it can be detrimental to a person’s financial wellness (I’ll talk more about this at another time). So, whenever I am talking with clients, leading workshops, or conducting trainings I guide people through a process of creating a “no shame zone” regarding their financial circumstances.

• Reflect – on what is really going on. What emotions come up when you think about the way you have handled money in your past?
• Recognize – the limits of your knowledge, skill and financial resources; identify areas where you may need help. You may find that you need to talk with a financial coach, planner or therapist if you feel “stuck” and unable to see any possibilities.
• Resolve – to “call out” shame whenever it arises or enlist the support of a trusted friend or advisor when that emotion surfaces. This simple step can often remind you to focus on what you want to move toward rather than focusing the negative situations. A brief deep breathing exercise or taking a brisk walk to move your body around can “shift” your thinking from problems to possibilities.
• Redesign – claim your desired relationship with money by writing down how you WANT to behave with your money. Begin building your financial plan. There are several free resources at FPAforFinancialPlanning.org or if you need an objective perspective consider working with a professional.

According to author John Bradshaw “Guilt says I’ve done something wrong; shame says there is something wrong with me.” In keeping with my belief that net worth and self worth are two VERY different measures I encourage you to create your own “no shame zone.”

By Saundra Davis
Special to FPA