With most Canadians avoiding their finances, here’s how to break the cycle of financial shame #CanadaFinance

Have your feelings around money impacted your relationships or caused you to put off important financial tasks? If so, you may be among the more than one-third (36 per cent) of Canadians who are stuck in a cycle of financial shame, according to a recent study from Coast Capital.

But it doesn’t have to be that way. Here’s what it means to be dealing with financial shame, and how experts suggest breaking free.

Chantel Chapman, a financial trauma researcher and educator, describes financial shame as a “really big feeling” associated with money that becomes part of someone’s identity. Whereas someone experiencing “financial guilt” may feel bad about their credit card debt, Chapman suggests they could still remain confident in other areas like investing.

That’s not the case with financial shame.

“Financial shame would be like, ‘I’ve got credit card debt, I am bad with money. It’s like my identity,’” Chapman said in an interview with Yahoo Finance Canada.

As the CEO and co-founder of a financial literacy program called The Trauma of MoneyChapman has found that financial shame can feel like the “threat of abandonment.”

“It feels like everyone’s going to shun me, like I’m going to be kicked out of the group,” she said.

In addition to debt, financial shame is often associated with how much someone earns, and whether or not they own a home, according to Chapman. But she says there are many reasons why the feeling may arise, and it could differ based on gender and generational experiences.

Financial shame often becomes a cycle, Chapman explains, because it comes with two common behaviours that lead to worse financial outcomes. The first is avoidance.

“They’ll avoid having conversations around money, they’ll avoid filing their taxes, they’ll avoid looking at bills,” she said.

This aligns with the Coast Capital study, which revealed that 63 per cent of Canadians take some sort of measure to avoid dealing with their finances. Those measures include postponing financial goals, avoiding discussing finances with family and friends, and avoiding situations that involve purchasing decisions.

The other common behaviour, Chapman says, is a compulsion like hoarding or overspending.

“And they’re choosing that type of behaviour because they’re looking for a way to soothe or distract from the pain of financial shame,” she said.

The effects of financial shame can extend far beyond one’s finances. More than half of Canadians reported that financial shame is impacting their relationships, as well as their mental and emotional well-being, according to the Coast Capital study. The study, conducted by Angus Reid Forum between Nov. 1 and Nov. 4, was based on a survey of 1,512 Canadian adults.

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