Money shame can be overcome by talking to someone you trust

The US suicide rate has risen steeply in recent years, and certified money coach Tammy Lally is convinced money shame is a contributing factor.

Ms Lally’s brother died by suicide in 2007 after receiving a foreclosure notice. Shortly afterward, Ms Lally’s mortgage business collapsed in the global financial crisis. She says she went from driving a Mercedes and living in an oceanfront house to filing for bankruptcy.

“It blew me away, the level of pain and sadness that I was experiencing,” she says. “I did not tell anybody. I was pretending like nothing was going on.”

She eventually realised she was experiencing shame – a deep sense that she was fundamentally flawed and unworthy because of her financial problems.

When she switched careers to become a financial adviser, she noticed how pervasive those feelings were. Some clients were ashamed of their debts, or their wealth. Others lived beyond their means or “played the big shot”, picking up the tab at restaurants or constantly rescuing others.

“I am seeing every one of my clients having shame around their money,” she says. “We live in a culture where our money is our worth.”

We are not born knowing how to manage money and everyone makes mistakes with their finances, says Lindsay Bryan-Podvin, a financial therapist. Plus, there are many factors beyond our control, such as the economy, industry trends and unemployment rates.

Too often, though, people feel there is something deeply wrong with them if they struggle with their finances. They may feel they are stupid, immoral, lazy or “bad with money”, or ruminate on what they should have done differently.

“When we make mistakes with money or things happen to us, we tend to internalise it and make it really personal,” says Ms Bryan-Podvin, author of The Financial Anxiety Solution. “If you’re beating yourself up, that is a good sign that there is money shame.”

Money shame can lead us to overspend to “keep up with the Joneses”, avoid our finances or criticise others who are struggling, says certified financial planner Edward Coambs.

“Shame induces us to be judgmental,” says Mr Coambs. “Because when we see other people struggling with something, it creates discomfort for us.”

Many therapists and researchers say that shame differs from guilt: we feel guilt when we have done something bad but feel shame when we believe we are bad or deeply flawed. People may believe they are so defective that they are unworthy of ever being loved or connected to others, says Mr Coambs.

In extreme cases, that could lead to thoughts of suicide.

“Shame really is about loss of relationship,” says Mr Coambs. “It is communicating to you that I am not worthy or valuable of being in a relationship either with myself or with another person.”

Suicides rarely have a single cause, and researchers can only speculate about why the suicide rate rises and falls. Studies show that suicides tend to rise with the unemployment rate, and a 2020 study for the American Journal of Epidemiology found that financial strain is a significant risk factor for suicide attempts.

But in the past couple of decades, suicide rates have increased in good economic times and bad. The suicide rate rose by 35 per cent from 1999 through 2018, according to the Centres for Disease Control and Prevention, before dropping in 2019 from 14.2 suicides for every 100,000 people to 13.9. Statistics for last year are not yet available.

Ms Bryan-Podvin speculates that income stagnation and increased economic insecurity could be contributing factors.

“Men struggle more with their mental health [after financial setbacks], because they tend to associate their self-worth to their income or their net worth,” says Mr Coambs.

All this is scary stuff. However, suicide is preventable and money shame can be tamed, financial therapists say. The first step is acknowledging what you are feeling.

Finding support also helps. Being able to discuss money shame with a trusted person can help you feel less alone, says Ms Bryan-Podvin.

Being compassionate with yourself and looking for lessons from the experience may also help.

Ask yourself what you can learn, or what you can do differently next time.

Ms Lally turned her experience into a TED Talk and a book, Money Detox.

“I did not have a name for it until it happened to me,” she says. “And my mission is to get people to talk about it.”