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How Fear, Guilt, Shame and Envy Affect Your Financial Goals
Money Psychology

How Fear, Guilt, Shame and Envy Affect Your Financial Goals

In an earlier article on our Money Psychology series, we ascertained that everyone has a personal, or private if you like, relationship with money. 

This personalised approach to earning, spending and investing money was associated with some peculiar money habits that many Kenyans have - however so natural that someone would not consciously recognise the strangeness within. 

As we enter the end of 2023, today we look at the role played by emotions in our financial growth journey. You have probably heard and agree that humans are social beings. Humans too are emotional creatures as well as thinking ones. 

The extent to which one employs thinking or feeling varies from person to person and by scenario, but even then, the ‘feeling’ or the emotional self is still always present and active. 

And this is why it generally can be said that most people do not exactly act rationally when it comes to money. In When Money is Involved, No One is Rational, Stephen Miles argues that even if all market participants have perfect information, they do not necessarily act rationally.

Some of the Key emotions at play in relation to money include guilt, fear, shame, anger and envy. These are very private emotions that many rarely acknowledge or attempt to discuss, if they do indeed recognise they affect their money decisions. 

1. Guilt

Guilt manifests around money in a number of ways including the feeling that one has too much in comparison to their friends, family or people in their circles, neglect of personal finances and secrets about money that one does not want others to know about.

This emotion is probably felt by most people either constantly, or intermittently when certain events or interactions happen that could trigger actions that often are detrimental to the individual’s financial goals. 

This could include unplanned spending, donations and charitable contributions that are off budget or even putting off crucial decisions until the guilt wears off.

They could, however, also trigger positive actions such as rethinking expenditure budgeting and generally prudent money management - a rarer outcome if guilt is not intentionally assessed by the person experiencing that emotion around their money. 

What to do

Seek to forgive yourself first for whatever you feel you did wrong, the regrettable decisions and the general acceptance of the fact that you cannot change what is in the past.

If there is a need to confess, then consider this as a way to overcome the guilt demon in your money journey and then move on once everything is in the open.

Understanding the sources/triggers of your guilt, the implications of the actions that led to this guilt can help you unclog your mind and get started on having a healthier relationship with your money. 

You probably shouldn’t feel as guilty for earning more than your friends and family if you did this legally and without shortcuts. If you feel you have neglected your dependants or those who would do with some monetary help from you, you can come up with a plan to pull them up - it could be monetary, training/Knowledge-transfer or generally enabling them to earn more.

Guilt associated with your not-so-good money decisions can be handled by evaluating and changing your undesirable money habits, setting habit change goals and a timeline to achieve them.

2. Fear

The common financial fears include panicking because you may not have enough, being perceived wrongly e.g. being seen as flashy, looking stupid and being exposed or humiliated.

Fear is probably the most toxic emotion when it comes to your financial well-being. It could manifest in your dreading losing all your money, becoming bankrupt, never having enough money or the fear of success. Whatever your fear, you can always overcome it.

What to do

Fear can cripple your decision making. It is thus necessary to start acknowledging and managing the fear you have around money. You can use your diary, or get one specifically dedicated to your financial anxieties. Know what your money fears are over time and start planning around eliminating them including seeking professional help. 

Changing the way you think about something could help you change how you feel about it. You could start understanding what your risk tolerance is, start investing in less risky investment types and work your way up to what was seemingly too risky for you before. 

3. Shame

While guilt is about the negative impact your money decisions have had on others, shame is mostly about letting yourself down in regards to your financial goals.

It is one of the most powerful emotions in personal finance. It can be a huge hindrance to you doing what you need to be doing with or about your money. 

One of the natural reactions in a case of shame, is the tendency to avoid exposure in relation to what one is ashamed about.

The feelings of not having enough money, the avoidance of thinking about finances like budgeting, savings etc. and either feeling you spend too much or buy stuff as a therapeutic measure could be pointers that there is shame in one’s money management.

If not identified and addressed, shame could derail your financial progress as you may focus more on what you have done wrong, don’t have rather than what needs to be done to achieve financial goals. It is even worse if you have no defined financial goals, because it robs you of a starting point, or if you like, an end goal. 

So knowing where you need to be financially, should be the biggest goal if you are feeling ashamed of your money management so far. 

What to do

To liberate yourself from shame, identify what makes you ashamed when it comes to your money and address the issues as they come. You can also create a habit of planning for your money to the last cent to ensure that you cut out what leads to you being ashamed of your financial status.

Again, forgive yourself because the realisation that the shame is holding you back financially means that you are a step closer to dealing with your  past money mistakes.

Embrace the lessons you have learned from your mistakes to move forward.

4. Anger

Anger is usually associated with a financial mistake you wish you had not made. This could be spending too much, not saving more or giving away too much. Whatever the case, anger shows that you are mad at yourself for being irresponsible or not learning about money.

What to do

It is good to know that what's done is done and to let bygones be bygones. However, whatever the reason you could be angry, let that be a lesson that you will not repeat the same mistakes.

Forgive yourself and consider having a budget and a strategy that will ensure that you do not regress to poorly managing your finances again.

Professional financial advice could be useful here especially if the anger is related to a bad investment decision. As we had talked earlier about risk tolerance, probably the anger is coming from taking too much risk than you can emotionally handle. 

Getting to understand your risk tolerance and creating a corresponding budget that keeps you in your risk comfort zone may reduce the chances of debilitating anger and help you grow into higher risk levels.

5. Envy

Have you found yourself wondering why someone who, in your opinion is not exactly much more impressive than you seems to be succeeding in life more than yourself?

Yes, that’s envy. And as we said, humans are in many ways emotional beings - so you are also allowed to feel envious, but with a limit. 

Probably keeping up with theKardashians is beyond your most practical goals, so maybe it might not be useful to want to match up to that lifestyle. 

Envy may even not be about sums but rather money habits that you wish you could develop but are yet to come close to achieving. Your friends have mastered budgeting, have good spending habits and seem to be better than you at haggling for the best deals

This is what we could consider to actually be positive envy. Ideally, it should spur you to start learning and implementing prudent budgeting, saving and investing skills rather than the retrogressive envy disposition that keeps you all sulking and unable to take action to improve your financial position.

What to do

Instead of burning with envy, what one could do is ensure that they are comfortable living within their own means.

Avoid trying to “keep up” or “outdo”. Seek to live within your budget and spend money on things that you feel are essential. By not seeking to impress or gain the approval of others, it shows that you can handle this emotion with financial maturity.


Do any of these emotions apply to you?

If you are not sure, you can work on yourself by identifying an emotional decision using a simple question. Depending on the answer to this question, you can gauge how emotionally aware you are about yourself when it comes to money.

“Will this bring me closer to my goals or am I feeding an emotion?”

The way you answer this question will help you regain control over your emotions and money. Be honest and face your emotions head-on so that you can attain your financial goals faster.

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Njenga has over 8 years experience in multimedia and business journalism both as a writer, editor and producer. He has over 5 years of experience in radio broadcasting as a news reader, reporter and presenter. He is also a 2012 Earth Journalism Network-EJN Fellow.

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