I have recently been teaching a financial class where a student was struggling between being responsible and being guilty over his financial situation. I am a strong believer in taking responsibility for your life including your financial situation. Yet, when responsibility is taken too far, it becomes a destructive force called guilt. For me, guilt is defining who you are based on your past mistakes. When a person feels guilt, he takes on so much responsibility that he loses his self-worth while expending energy by beating himself up with guilt instead of moving forward towards fixing his situation.
In the class, the student wanted to know what was wrong with taking responsibility for his financial situation. I explained that responsibility is recognizing what is and what can be done to change the situation. Guilt, on the other hand, is beating himself over the head again and again for his mistakes. By using guilt to beat himself else up with, he is robbing himself of the opportunity to change. By expending energy on beating himself up, he has less energy to see and put towards opportunities to change the situation.
• If I had a college degree, I would be better off now.
• If I had only invested in Yahoo 10 years ago, I would be on easy street.
• I should not have fallen for that con job.
• If I had not used those credit cards, then I would not be in debt now.
Some of these statements are relatively benign. The question is if they are being used repeatedly. It is one thing to take responsibility and another to live constantly with your past mistakes. In other words, it is great to take responsibility and move on. It is another thing to let past mistakes to define you by reliving it over and over again.
One definition for guilt in the Merriam-Webster dictionary is “feelings of culpability especially for imagined offenses or from a sense of inadequacy”. I find this interesting because it is the feeling of being culpable. Many millionaires have once been broke, yet have earned their money back because they have looked forward instead of being caught in the past. Others have used bankruptcy or broke as a way to define them by using shame and guilt (which holds them back).
So the key is to understand how you got into your financial predicament, yet do not let it define who you are through shame and guilt. Also, do not let others (e.g., credit card companies and others) to rob you of your self-worth by letting their belittlement of you for getting into your financial predicament affect you.
Guilt can also be used against others. Think about a time when you parents used guilt to get you to do something. How did you feel? Upset, frustrated, punished? Someone may ask if punishment is good because we learn right from wrong. Punishment as a corrective measure is one thing. Punishment that makes people feel humiliated or less than only makes the situation worse.
From a financial perspective, people use guilt to get what they want, such as
• If you love me, than you will get me a __ (fill in blank) __
• We raised you, isn’t it time that you help support us in old age?
I recently had a comment from a reader about how her parents are using guilt to have their children support them in their old age. The parents, in this case, are now spending wildly and saying they will spend it all because it is their daughter’s duty to support them when the money is gone. The guilt is based on if you loved me, then you would support me. In other words, if you do not support me, then you do not love me. It is difficult not to feel guilty for not loving your parents after they raised you. Yet, love is not about the money. You can love your children without giving them presents that they ask for. You can love your parents without providing the financial support that they may ask for. The focus needs to be on defining what you are willing to do in means of support and communicate it clearly. In addition, do not let them make you feel guilt for not giving them what they want. Because like teens, if you give people what they want through guilt, they will just ask for more and more.
For information on shame, you can read “How Shame Effects Your Financial Health”