“Breaking the Cycle of Financial Shame: Strategies for Canadians Struggling with Money Management”

Feelings surrounding money can deeply impact various aspects of life, from personal relationships to crucial financial decisions. According to a recent study conducted by Coast Capital, more than one-third (36 per cent) of Canadians find themselves ensnared in a cycle of financial shame.

However, breaking free from this cycle is entirely possible. Understanding what financial shame entails and heeding expert advice can pave the way for liberation.

Financial trauma researcher and educator, Chantel Chapman, characterizes financial shame as an overwhelming emotion that becomes intertwined with one’s identity concerning money. Unlike financial guilt, which may arise from specific financial actions, financial shame permeates one’s entire self-concept, leading to a sense of inadequacy and fear of social exclusion.

Chapman, CEO and co-founder of The Trauma of Money, equates financial shame to the looming threat of abandonment, describing it as a paralyzing fear of societal rejection. It often extends beyond issues such as debt, encompassing aspects like income and homeownership, with its roots deeply embedded in gender and generational experiences.

The detrimental impact of financial shame is compounded by two common behaviors: avoidance and compulsive actions like hoarding or overspending. Avoidance manifests as reluctance to engage in financial discussions or responsibilities, while compulsive behaviors serve as coping mechanisms to alleviate the distress caused by shame.

This cycle of shame not only undermines financial well-being but also permeates into personal relationships and mental health. Over half of Canadians report experiencing negative impacts on their relationships and emotional well-being due to financial shame, according to the Coast Capital study.

To break free from this cycle, Chapman emphasizes the importance of identifying and articulating feelings of shame, thereby reducing its impact. Depersonalizing shame by recognizing its external sources and seeking support through open conversations with trusted individuals are crucial steps towards healing.

For many Canadians, breaking the cycle of financial shame involves practical steps such as analysis and budgeting. Xin Lou, a wealth planner at Coast Capital Investment Management, advises individuals to start by meticulously tracking their spending to gain clarity on their financial situation. Furthermore, Lou stresses the significance of understanding that money is a tool to achieve life goals, emphasizing the need to align financial decisions with personal aspirations.

By following these steps and seeking support when needed, individuals can regain agency over their finances and break free from the detrimental effects of financial shame, paving the way for a healthier relationship with money and a brighter financial future.