Do you avoid looking at your bills or bank statements? Do you know how much you currently have in your accounts or how much you owe? Does thinking about your financial situation cause you anxiety, distress, or guilt? Do you avoid discussing or thinking about your financial situation at any cost to avoid feeling negatively about it? Individuals with financial avoidance or financial denial will often avoid thinking about or discussing their financial situation or issues in an attempt to cope with and minimize the negative feelings associated with it. Although there might be a temporary relief from the stress and worry, avoidance of financial topics and management can have significant negative consequences, such as bills going unpaid, credit scores decreasing, debt increasing, to even possibly frequent solicitation from creditors, loss of personal belongings or relationships, or repossession of cars and homes. This type of coping mechanism can often lead to more issues or problems with the individual’s financial situation due to poor management and financial practices, causing more distress and avoidance, which only strengthens the negative cycle already in place.
It has been found that individuals who are money avoidant or in financial denial often view money as evil, wealth as corrupt, taboo to discuss money and finances, and believe they are better off without it. This view, or money script, can come from family history, personal experiences, social network, societal beliefs, or cultural influences. With a money avoidant script, the individual will have negative thoughts about money which often result in negative emotions or behaviors. Instead of trying to deal with the problems or situation, the individual will steer clear of any and all matters related to money or finances.
Individuals may avoid financial topics due to a difficulty in processing the information or problems with financial literacy, lack of confidence or knowledge, negative emotional connections to financial matters, and/or distorted views or beliefs about money. Irrational thoughts and dysfunctional behaviors related to personal financial management and decisions can lead to feeling overwhelmed, incompetent, or guilty and poor financial decisions, errors in judgment, or shortcuts in financial management practices. It may seem helpful to the individual in the moment to avoid it, but in reality, the more a person attempts to avoid thinking about or working on their financial situation, the worse it will become and the harder it will be to make positive changes down the road.
Once an individual is able to acknowledge the issue or the need for change, assistance from a financial therapist or financial planner can help them to work towards a healthier relationship with money and a more positive financial situation. With financial therapy, a financial therapist can help the individual identify distorted thoughts or beliefs about money and finances, the impact these views have on emotions and behaviors, and to create alternative or more positive thoughts and behaviors. Financial therapy can also be helpful in creating more positive coping mechanisms to use during times or distress or anxiety about money, improvement in understanding and ownership of one’s financial situation and their role in it, and improvement in financial behaviors and money management skills. By utilizing a financial planner, the individual can learn techniques or practices to have better control over their financial situation and decisions, an increase in knowledge and awareness about their financial situation, and financial services and support to keep them on track. With both financial therapy and financial planning, the individual can begin to change their perception about money, increase their confidence and knowledge, and have a more positive relationship with money.
Don’t live in denial or avoidance and let money have control over you, reach out to a financial therapist or financial planner now and start your journey to a more positive way of life.
Source: Klontz, B.T., Britt, S.L., & Archuleta, K.L. (2015) Financial Therapy, Theory, Research, and Practice. Switzerland: Springer International Publishing.