Shaming people for their money mistakes is commonplace. It has to stop

The culture of personal finance is one of personal responsibility. Any mistake with your money is your fault. All success is the result of intelligence, discipline and hard work.

The story aims to empower people to take control of their financial future, but in many ways it does the opposite. Instead of feeling inspired and confident to manage their money better, people feel embarrassed and hopeless about their financial situation.

The tool used by the personal accountability crowd to keep people in line is shame. If you are in debt, it is because you have been negligent. If you don’t have any savings, it’s because you’re irresponsible. If your financial situation is failing in any way, it is entirely because of your failure.

This is fundamentally wrong. In reality, the choices we make with our money are mostly determined by the choices available to us in the first place. You’ll end up with student loan debt if college wasn’t an option without borrowing money. You won’t be able to save for retirement during the months you were laid off from your job. But the truth doesn’t stop the train of shame.

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Those who hand out judgment probably do so to feel better about their own decisions. Some people cannot be completely certain that they made the right decision unless they are completely convinced that someone else made the wrong decision. Shaming someone else for extravagant purchases, high debt, or dismal savings is a roundabout way of congratulating yourself for doing things differently.

But shouldn’t making good financial choices be enough without putting someone else down?

Financial institutions are also guilty of shaming people for their bad financial decisions, with the added irony of tricking them into making them in the first place. The algorithms behind the credit products ensure that you will receive just enough money to get caught. Your debt will never be enough to overwhelm you, while always being just enough to make it extremely difficult to repay. Your credit score becomes your adult report card: how exactly do you manage to play the game of life?

It’s easy to feel like you’re doing everything wrong with your money and the distress is exacerbated by the crowd insisting it’s all your fault. Even if that’s the case, wallowing in shame doesn’t change your situation.

Science says it can actually make things worse. Shame intensifies financial hardship by causing individuals to avoid caring about their finances or to engage in behaviors that worsen their situation, such as spending too much or neglecting to save.

Every minute spent feeling sorry for the financial mistakes of your past is a minute that could have been spent planning and building a better financial future. Not only does worrying about your past feel miserable, it distracts you from the wealth that awaits you.

Most people feel overwhelmed trying to fix their money mistakes, but the wonderful thing about putting in the effort to manage your money better is that you usually see results very quickly. . We tend to think we won’t experience relief until our finances are perfect, but it happens much faster than that.

Paying off a credit card still grants a quick win even if there are four more left. Saving $1,000 for your child’s post-secondary education still gives them a benefit, even if they don’t pay the full bill. Your finances will probably never be perfect, but the good news is that they don’t have to be.

Financial security is built gradually and you benefit a little with every step you take. The problem with shame is that it discourages people from taking the first step. Shame communicates that the game is over before you even begin. But you have plenty of chances to get it right and you always have the chance to make things better.

Bridget Casey, MBA (Finance), is the founder of Money After Graduation, a financial e-learning company. You can follow her on Instagram and Twitter at @BridgieCasey.

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