If you have ever decided not to ask a burning question in a class, participate in a certain activity or speak to a respected professional about something because you felt like you weren’t yet ready or were ashamed of your lack of knowledge or current circumstances: you’re part of a big club.

No one likes to be judged. But it’s even worse when we have guilt attached. We don’t like to be judged but feel that perhaps we deserve to be judged for our ignorance or our current situation. So many of us go without an answer, ignore the problem or struggle with our own ineffective attempts at solutions.

This unfortunately is a common experience with many of us in our personal finance journeys. The likely reason: an unfortunate shaming culture in the global personal finance industry and unfortunately across the board in T&T as well.

So much of traditional financial advice is built on shame but presented as tough love with advisors attempting to convince individuals that they should accept absolute personal responsibility for their circumstances. Financial freedom and stability are marketed as being accessible to all, with each decision along the way being painted as either objectively positive or negative and any related consequences are somehow entirely the individual’s fault. They seem to suggest that only when personal responsibility is assumed will an individual be able to make the ‘right choices’ to achieve financial freedom.

But how many of us have gotten into not-so-great situations because we simply lacked the education to have done better to begin with?

Financial literacy topics such as debt management, budgeting and saving are far from dinner-time conversations or school curriculum topics for most of us growing up, so how are we expected to land in the world with almost no experience and somehow correctly navigate the foreign landscape before us? Much less for situations over which we have little control but are still expected to successfully manage, such as piling hospital bills due to the unanticipated illness of a family member, the loss of a home, source of income or an important asset.

The problem with a shame-based approach, however, is that many of these assertions about personal liability aren’t true and shame doesn’t work.

Furthermore, the proverb ‘you can catch more flies with honey than with vinegar’ remains true. While for some shame can be a motivator, for the majority it backfires as people withdraw into themselves and become unable to process information and act on it. If someone is already shamed for having made mistakes, how willing would they be to try new behaviours when the possibility exists that they may make another mistake and experience further shame and other negative consequences?

A 2015 study by researchers at Florida State University College of Medicine indicated that patients with obesity who were shamed by their provider were three times more likely to still be obese four years later than patients who received neutral or empathetic treatment. Another study in 2019 showed that patients with type 2 diabetes were 40% less likely to die of a heart related event if they had a highly empathetic provider.

Empathy works!

Helping clients understand that their circumstances are not individual failings unique to them but rather a shared human experience for many others abates some of the anxiety and debilitating guilt they may be feeling.

Many people may be surprised to know that a common response to many questions that financial planners and coaches receive is “it depends”. There often is no 100% right or 100% wrong answer because individuals are free to determine what their goals are and how they wish to allocate their finances. An advisor’s role is to help clients align their decisions and habits with those articulated goals.

The core of personal financial coaching is a focus on the person – an attempt to offer financial guidance, education and encouragement with human psychology and individual circumstances taken into consideration and in a format that the layperson can understand.