Are You a Parent in a Financial Shame Spiral?

A financial shame spiral is a vicious cycle between feelings of shame and financial hardship, fueled in part by shame-induced, avoidant behaviors. 

A 2021 paper in the Journal of Organizational Behavior and Human Decision Processes describes how financial shame can lead people to avoid important financial information, creating a vicious cycle that prevents parents from achieving financial and lifestyle objectives.   

According to Sarah Newcomb, Ph.D., a Morningstar behavioral economist, these behaviors can also erode your well-being and health. So, what are the signs you are in a shame spiral, and how can you break the cycle? 

First, determine if you intentionally ignore your financial situation, otherwise known as avoidance.  Here are a few telling signs 

• Repeatedly putting off financial tasks 

• Not checking balances 

• Hiding the truth of one’s situation from trusted friends and family 

Avoidance lowers psychological pain in the short run, but since it does nothing to fix the underlying problems, they worsen. 

Breaking the Shame Cycle 

From the research cited previously, investing five minutes in redirecting attention to one or two acts of kindness you have performed in the past has shown to have a positive impact on breaking the cycle.  

Newcomb notes that reflecting on the positive aspects of our selves is generally good for mental health and well-being. It may also help financial health by empowering people to face up to difficult realities and tasks that need attention. 

Most individuals and parents would gladly take a pill if prescribed by their doctor to change a behavior.  However, I have found with these studies that giving yourself five minutes daily to reflect on yourself can feel more daunting. 

The additional challenge to changing behaviors is if a vetted solution is not within your normal mode of daily life, will you choose to make the beneficial and sometimes life-changing decision? 

Ready to break free from the financial shame spiral and build a brighter future for your family? Take the first step towards financial empowerment. Contact us today, and let us guide you in crafting a personalized financial plan. Break the cycle, secure your well-being, and pave the way for a prosperous financial future. Your journey to financial freedom starts with a simple click.