Money Guilt: How to Move Past It

If you have ever felt embarrassed about how much you have saved, avoided opening a credit card statement, or justified a purchase to your financial advisor before they even asked, you have experienced money guilt or financial shame. Most people have. What most people do not know is that these two feelings are actually different, that one of them is more useful than the other, and that both of them are far more common in financial planning conversations than anyone talks about openly. 

In this episode of Financial Commute, Chris Galeski and Modearn® Advisor Kristin Dillon break down the difference between guilt and shame around money, why shame in particular tends to keep people stuck, and what the practical path forward looks like regardless of where you are starting from.

*Questions This Episode Answers*
• What is money guilt?
• What is the difference between money guilt and financial shame?
• Is it normal to feel guilty about spending money?
• How do I stop feeling guilty about spending money?
• What should I do if I feel behind on saving?
• Does money shame only affect people who are struggling financially?

Transcript

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00:00:00:02 - 00:00:08:13
Speaker 1
Money is such a taboo topic, and people often feel so uncomfortable talking about money, and especially the guilt around money or their shame around money.

00:00:08:14 - 00:00:19:24
Speaker 2
The feeling of guilt and shame is completely normal, and so if somebody has it, you're not alone. I had so much shame around that credit card debt that I couldn't bring it up to my parents. I didn't know what to do.

00:00:19:25 - 00:00:34:03
Speaker 1
I have multiple clients that have shame around money. They don't look at their credit card statements, and I understand that. But I often find that when those behaviors are there, it continues to spiral.

00:00:34:04 - 00:00:48:15
Speaker 2
Even saving $50 a month or $100 a month now still gets you closer to that goal. And it removes that feeling of shame.

00:00:48:18 - 00:01:12:26
Speaker 2
Kristen, I'm looking forward to the conversation today because it has to do around money guilt. And it's very interesting, is we've started to work with younger clients through modern or even kids of clients and even some clients that have been very successful throughout their lives. More and more these days, I'm having conversations with clients that tend to kind of be around this money guilt.

00:01:12:27 - 00:01:39:06
Speaker 2
And it has to do with, you know, sometimes fear and shame or guilt and shame. And it's just so fascinating to me that I thought we would have a conversation about this. And the main reason why is because somebody investment performance has less to do with how the actual investment did. It has more to do with how they react or respond to things of them selves that end up driving the end result.

00:01:39:07 - 00:02:04:13
Speaker 2
So if you bought something and it goes up or down really fast, you could react or respond in a way, but it mainly has to do with the feelings that you have around the money and what that money means to you. And so I figured we would just start today talking a little bit about money, guilt and defining the difference between guilt and shame and how that could be a benefit or not as much of a benefit through through this discussion.

00:02:04:15 - 00:02:26:14
Speaker 1
I think that I feel I want to start with just saying that money is such a taboo topic, and people often feel so uncomfortable talking about money, and especially the guilt around money or their shame around money and how they their relationship with it and how they spend. You know, guilt is just to differentiate between the two. Guilt is more of a behavior.

00:02:26:15 - 00:02:54:04
Speaker 1
Like I bought something expensive that I maybe shouldn't have, and it could be a catapult into learning where shame is more about yourself. And it's like I am bad. I am bad with money. I don't deserve money. And so that could lead down kind of a shame spiral, as it were. And stunt people from taking action or being empowered.

00:02:54:06 - 00:03:05:10
Speaker 1
Right. And so I think that understanding the difference between the two could help shed light on moving forward and being okay.

00:03:05:12 - 00:03:23:09
Speaker 2
So and I love the way that you brought that up about the difference between guilt and shame. Guilt is something that we, you know, we feel and we can still take a different course of action next time. Like, I, I bought something expensive or I did something and looking back, it's like I probably shouldn't have done that versus shame.

00:03:23:09 - 00:03:46:16
Speaker 2
I'm now going to stick my head in my sand because I'm blaming myself. Both of those things I've actually lived through during my financial journey. I remember I graduated from college, I was playing golf professionally, but I had accumulated like $3,000 of credit card debt, and I had so much shame around that credit card debt and how I was going to pay it off and what that meant.

00:03:46:16 - 00:04:03:15
Speaker 2
And it was just it just sort of happened. I just woke up one day. And in the grand scheme of things, it's $3,000. You know, the end all, be all and like ruined me financially for life. No, it did not. But I had so much shame about the fact that I had that that I couldn't bring it up to my parents.

00:04:03:15 - 00:04:27:11
Speaker 2
I didn't know what to do. And so I lived with that for a long time. And then there were other cases where, you know, I felt guilty for taking a vacation or having a larger purchase or whatever it might been, because I felt like I was stealing from my future, or looking back, if I was to give myself a different choice and use that money for a different thing I might have, I might have made a different decision.

00:04:27:11 - 00:04:48:12
Speaker 2
So the feeling of guilt and shame is completely normal. And so if somebody has it, you're not alone. Absolutely. It's just very interesting how it's seeming to be involved in more and more conversations with the clients, whether it's somebody doing a remodel in their home and trying to justify to me or us about the amount of money that they're spending.

00:04:48:13 - 00:05:07:16
Speaker 2
Look, you're going to enjoy the remodel your home. This is an okay thing. We've done the financial plan. It's okay for you to spend this money. But even with that, there's still some guilt around it. And then we've had some clients that, you know, maybe they first get introduced to us and they start off by saying, well, I'm just bad with money.

00:05:07:16 - 00:05:11:10
Speaker 2
And that's sort of a trigger for us to to engage in a conversation.

00:05:11:12 - 00:05:38:26
Speaker 1
Yeah. And I often tell because I have multiple clients that have shame around money. They don't look at their credit card statements, they don't look at how much they are in debt, they don't look at the interest payment. And I understand that. But I often find that when those behaviors are there, it continues to spiral, right. And so I encourage them like there's no for me, there's no judgment.

00:05:38:26 - 00:06:04:00
Speaker 1
I'm just here to help. But you have to help me help you. And acknowledging that you have shame around it. Right. And then opening checking your credit card statement. I have a client who calls me, you know, that mid-month and is like, oh, a overspent and and so and she would do it off and on, and she had so much guilt around it, and she wouldn't look at her credit card statements.

00:06:04:00 - 00:06:32:26
Speaker 1
And her credit card debt continued to accumulate. And so every month now I check in on her, hey, what's your credit card balance? And so now she's checking. And it's crazy, like the little shift in us working together, how she's becoming empowered. And then, you know, asking herself, is this a want or need? And like, just her behaviors are changing in admitting that or at least seeing that she has shame and guilt around her spending.

00:06:32:27 - 00:06:52:19
Speaker 2
And being able to acknowledge that, then figure out what the course of action is to move forward. I love the fact that you brought up that like we are non-judgmental, we have. Trust me, we have seen it all and it's not our job to put our values around their money. It's our job to to sit there and figure out how do we help solve this problem, or it is your money.

00:06:52:20 - 00:07:10:28
Speaker 2
How do we help you spend it and use it to get the most enjoyment you can? And so if somebody comes to us with a problem, large amounts of credit card or student loan debt and they have guilt or shame about the result of it, there is no judgment. We are just simply here objectively looking at right here's where we're at.

00:07:11:00 - 00:07:30:16
Speaker 2
Here are the things that we need to work on together in order to fix this problem. Be on a better path. But at the end of the day, we we can't do anything unless somebody is willing to accept where they are in this guilt or shame sort of feeling of emotion, and then acknowledge what the best path forward might be.

00:07:30:18 - 00:07:34:27
Speaker 2
But putting your head in the sand and ignoring things is will not help you get better.

00:07:34:28 - 00:08:02:01
Speaker 1
No, and it's not just young clients that I've experienced money guilt around because we all have a money story, right? Like, we've all been raised by parents that have their money story and their experiences, and different generations have different relationships with money, right? And so like, there's older clients that we, you know, in us and other advisors here have had to say, no, spend the money, please spend your money.

00:08:02:02 - 00:08:11:27
Speaker 1
You know, but they have so much guilt around spending money that they just hoard their money. So it's like the complete opposite, right? Where you're just like, no, no, take the vacation. You can't take it with you.

00:08:12:03 - 00:08:32:26
Speaker 2
Well, it has to do with that scarcity mindset versus abundance mindset. When you're too extreme on either end, it could be a bad thing. But I always love clients that have done very, very well for themselves. And they've done well because they live within their means. They've been good savers, good investors. But when they have that fear about spending that money, I just tell them, if you don't fly first class, your kids will.

00:08:32:28 - 00:08:33:22
Speaker 2
So it's up to you.

00:08:33:23 - 00:09:02:14
Speaker 1
Yes. And you've worked so hard. Enjoy that. But you know, it's one of those things. It's it's the messaging that they've grown up with and I and it's very it's a very stark difference to, you know, a younger generation now where there's credit cards and taps and there's it's not mindless, but it's almost mindless. And how people spend today, like, you're not balancing your checkbook anymore and seeing the cash being directly withdrawn from your account.

00:09:02:14 - 00:09:05:13
Speaker 1
And so it's easier to overspend.

00:09:05:14 - 00:09:23:06
Speaker 2
I remember in college I had one of my teammates. His name was Scott. Wonderful guy. The way he budgeted was each month he would go into the bank and he would get a bunch of $5 bills, and he would put them in envelopes. And for breakfast, he got $5. For lunch, he got 15. For dinner, he got 20.

00:09:23:06 - 00:09:41:18
Speaker 2
And that was the only money. Each day he just grabbed an envelope for where he was during that day. And then that's what he used. So that way he could stay on track today with with tapping and swiping and sort of living in a cashless society, it's easy to overspend. It's easy to go on Amazon, click a couple buttons, have it delivered.

00:09:41:22 - 00:10:04:24
Speaker 2
But at the end of the day, we need some sort of a tool, some sort of a budgeting app, some way of reference to say, hey, here's what I budgeted, here's what I've spent. So that way I can acknowledge whether or not that was okay or change it going forward. But, you know, people feel guilty when they either spend too much money or they feel like they have more or less money than their peers.

00:10:04:25 - 00:10:11:00
Speaker 2
And that seems like more of a social media issue than anything. Where does shame come from?

00:10:11:02 - 00:10:36:19
Speaker 1
I think it's more of just, again, it could be learned, you know, or the fear of not understanding, not knowing. You know, a lot of us weren't taught finance how to budget. And so it could be a lack of self-esteem. I mean, it could be so many things, but I think that it's a ripple effect, right, to where you are not paying attention.

00:10:36:19 - 00:10:55:00
Speaker 1
And then you go spend more to like get that little burst of feeling, okay. And then you just spiral down and it's like the, the snowball effect that it just gets bigger and bigger, and then you kind of hide and you don't say anything and you don't acknowledge it. You don't say it out loud because you feel shame.

00:10:55:00 - 00:11:04:22
Speaker 1
And so it's just a I don't know, it's I don't know where it comes from, but it could just be more of an internal self-esteem struggle.

00:11:04:24 - 00:11:26:09
Speaker 2
One of the things that was interesting during some research for this was that had to do with shame was, let's say, let's say somebody in their 30s or 40, 50 or 60, it doesn't matter the age, but they read something that says, hey, in order for you to be set up for success, for retirement or the goal that you have, the house purchase, whatever you need to save 500 or $1000 a month.

00:11:26:09 - 00:11:48:21
Speaker 2
And if they look at their current situation and go, well, that's not attainable, I can't do that. They just go, oh, well, I guess I'm done and then forever have that shame. But they don't realize that, okay, let's say the goal is $500 a month. Even saving $50 a month or $100 a month now still gets you closer to that goal.

00:11:48:21 - 00:12:01:04
Speaker 2
It's better than doing nothing. And it removes that that that feeling of shame and maybe puts you more towards guilt to where you could still change actions and habits going forward.

00:12:01:04 - 00:12:34:04
Speaker 1
I feel like a broken record because I always say, and I feel like the last time we talked about modern, I had said, start with $25. You know, I had started my, you know, in my past with $25. I just wanted to set up that behavior and to start that action. And it changed. And now, you know, I still have that behavior, you know, and making sure that I'm putting money and investing in the different buckets of my life and setting myself up so that I can live my best life today.

00:12:34:04 - 00:12:43:02
Speaker 1
I can enjoy life and know that my future self is taken care of. And I know for you. You've shared with me that you have multiple bank accounts.

00:12:43:03 - 00:12:43:13
Speaker 2
Way too.

00:12:43:13 - 00:13:06:08
Speaker 1
Many that have all different purposes. But that's important because it's, I think having the knowledge and knowing like, oh, okay, I have X, I have this account that's for vacations or for immediate purchases. Here's what I can spend out of this bucket. And there's no guilt about it or shame. It's like, yeah, great, that's what I could spend.

00:13:06:09 - 00:13:24:00
Speaker 2
It's been a hard hurdle to get there. I mean, to be really candid, there are plenty of times in my life where I do not feel successful, which is just crazy. I mean, there's no world where I should be living in where I have. I'm not a successful person and we are good savers. Thank God for my wife.

00:13:24:00 - 00:13:42:13
Speaker 2
But you know, there there are plenty of times where like, I don't feel successful. And so I have a little bit of guilt or shame that, you know, I feel like I should be farther along or I want to be more successful than I am financially. And so when we go take a trip or vacation, I feel like that that's money lost and should have gone somewhere else.

00:13:42:13 - 00:14:01:15
Speaker 2
Even though I've done financial plans like it's completely fine. It wasn't until I actually set up a vacation account and put money into it did I feel the freedom that when I went on vacation, it's like, yeah, I'm free to spend this money? The reason why I was feeling that way is because all of our money was just in the investment account.

00:14:01:15 - 00:14:20:12
Speaker 2
And so when I felt like I was taking money out to go on a vacation, it was taking away from my future goal. And so I needed my wife and I needed to create 7 or 8 different accounts, you know, the 529 for the kids, the the bucket for taxes, investments or checking account, the vacation one. We needed to create those, those different buckets.

00:14:20:12 - 00:14:38:22
Speaker 2
So mentally when I saw money going in, I was getting excited for the vacation. Not so much the tax bill, but when money came out, I didn't have that guilt of where it was going and I enjoyed it more. And so that was that was one thing that I felt like helped me sort of remove that emotion or get beyond that emotion.

00:14:38:24 - 00:15:06:28
Speaker 1
Yeah. I1I always like to say to people, don't should all over yourself, right. Because should could be dangerous. I should be doing this but it's okay. Like we all as long as you're learning and moving forward. Right. And then I feel like advisors are kind of getting a little bad rap right now on social media. And it hurts my heart because, you know, I'm working with a client, and I was speaking with her yesterday and she was just so grateful.

00:15:06:28 - 00:15:41:09
Speaker 1
But we're working on these different accounts for these different purposes and like setting up a strategy for her to have a more what's the word, thoughtful, mindful strategy to saving for her future, you know, because she feels a little bit behind and it's I'm like, it's okay. Learn from the past. We'll set yourself up. And you know, Morgan, who we work with often, you know, laughs at me because I'm always like, here's how we're here are these different buckets.

00:15:41:09 - 00:15:54:01
Speaker 1
And she's like, I'll just put it all in the same fidelity account. And I'm like, no, I need these different accounts to have their purpose, to know clearly, okay, this is for this. This is for that. And I love your strategy.

00:15:54:02 - 00:16:13:24
Speaker 2
So well. Everybody's journey is so different. Right. Not everybody's getting a job at 20 and maxing out there for one care. There is a and continuing to save. Look I'm on social media every once in a while to I see those awesome charts and graphs. And if you started at 18 years old, guess what? Life's a little bit easier for saving than if you started at 40.

00:16:13:25 - 00:16:33:28
Speaker 2
No, I get the power of compounding and math, but you know, I didn't get my first job that paid me to where I could save until I was 30 years old. I lived my 20s chasing a white golf ball, and I was dead broke by the end of it. But there was great life experience. I can't I can't judge my journey in life and compare it against somebody else.

00:16:33:28 - 00:16:56:00
Speaker 2
That started a different time. I also know people that switched careers in their 40s, and you look at the course of their life and they learn so much in their 20s and 30s, but by the time they were in their 40s and they switched careers and were successful, like they had different habits. Ely Callaway didn't start Callaway Golf until he was 63 years old.

00:16:56:02 - 00:17:08:26
Speaker 2
Okay, you don't have to. You don't have to listen to social media and feel guilt and shame because you didn't start earlier. If you didn't start ten years ago, the best time to start is now. Right now. And so like, that's the point of the conversation.

00:17:08:27 - 00:17:31:24
Speaker 1
Absolutely. And I didn't start until I started working here. Yeah, I didn't have a 401 K. I was self-employed, you know, and so I could, I could have shoulda, woulda all over myself. But the fact is, is that it didn't happen and that's okay. And so I learned when I got hired and my habits have changed significantly and improved.

00:17:31:25 - 00:17:33:08
Speaker 1
Yeah. And there's no guilt.

00:17:33:09 - 00:17:37:26
Speaker 2
There is no guilt. I mean, we all feel guilty every once in a while about something.

00:17:37:28 - 00:17:39:08
Speaker 1
Absolutely insane about.

00:17:39:12 - 00:18:07:21
Speaker 2
But it's normal, I guess. I guess if I'm talking to somebody that has some feelings of guilt or shame that's causing them from taking action around changing their habits or making a poor investment decision or an emotional one, the the way to best protect yourself is, number one. Figure out what your income is and what your expenses are, and try to make sure that you have more money left over than what you spend at the end of each month, and then pay yourself first.

00:18:07:21 - 00:18:29:19
Speaker 2
Start saving that money right when you right when you get it, and build up an emergency fund. Those stats around, you know, the average American running into $1,000 surprise bill can't afford it, would need to go into debt for it. I mean, that's just scary stat. And so without an emergency fund, you can't sort of get through those feelings of guilt and shame.

00:18:29:19 - 00:18:50:08
Speaker 2
And it's never you don't need a lot of money to start investing. Some people think like, oh, I'll wait till I get to X dollars before I invest. No. Invest as little and as much in as early as possible. It doesn't matter. But, you know, figure out the budget. Find some sort of a budgeting plan or strategy to keep you updated along the way.

00:18:50:09 - 00:19:01:16
Speaker 2
Start building that emergency fund and find somebody that you can talk to about the feelings and emotions that you have, because they are normal and without addressing it, you're never really going to change anything.

00:19:01:18 - 00:19:23:17
Speaker 1
And you're not alone. And I will say that, you know, I'm working on this post article about changing the advisor. Like the thought around advising like for us, I know at least here at Morton, we're so much more than like here, invest in x, y, z. It's like we're a partner and we're someone to bounce ideas off of.

00:19:23:18 - 00:19:38:02
Speaker 1
And I often, you know, tell, say that I'm a code dream maker, you know? And so I want to be an accountability partner and someone that you could pick up the phone and call when you're like, oh, do I make this, make this purchase. So be empowered.

00:19:38:03 - 00:19:54:08
Speaker 2
Look, I enjoyed the conversation today. I know it's sort of kind of difficult to be able to talk about guilt and shame with money, but these are, you know, normal things. And it's just been interesting how we've seen it sort of come up more in conversations, you know, in the last year or two with clients, then maybe it has been before.

00:19:54:10 - 00:20:10:08
Speaker 2
I think maybe people are getting more open to addressing their concerns around money, too, which is a very positive thing. I also think that social media plays an impact, but at the end of the day, you can't get anywhere moving forward unless you have a plan and a strategy and feel free to reach out to us.

00:20:10:09 - 00:20:10:27
Speaker 3
Yes.