One of the most common emotions connected with money isn’t excitement, fear or even uncertainty. It’s ‘shame.’
This shame around money can cause deep havoc to the financial wellbeing because it’s often mixed with another common theme for American savers: A lack of financial education and knowledge.
Both of these realities – lack of financial education and the shame around finances – work in tandem to derail goals, drive higher debts and reduce the potential for long-term security. Yet, in the U.S., financial literacy isn’t improving – and may be getting slightly worse.
According to the annual P-Fin Index conducted by the World Economic Forum, which measures a population’s money knowledge, the US has shown financial literacy rates that have hovered around 50% since 2017. In 2023 and 2024, the rate dropped slightly to 48%. This figure captures basic financial education knowledge and doesn’t also mean that someone who has the acumen then knows how to apply that information to increase their overall security and wealth.
The areas that Americans show the least amount of comprehension is in financial risk, while showing a better proficiency in borrowing, saving and consuming, according to the survey.
The fact that the lack of financial literacy has risen, indicates that the shame people feel around money isn’t their fault, but due to a lack of education and resources at a young age to properly guide decisions as they get older. Instead of shame, it’s important to realize this fact and determine what type of resources you need.
For adults, it may require seeking guidance based on the need. Here’s how to delve further into the financial void, and reduce the shame around what you were likely never taught.
Seeking Out a Financial Therapist
Financial decisions can sometimes seem obvious when looking at hard numbers. But it’s actually the impulses that we have which impacts what we do with money more than the calculations. These impulses may lead us down paths completely unrelated to what we want to spend money on, what we want to do in the future or even what we want to do today. Instead, it’s an outlet for stress or emotions that we have, which can include shame as well as a myriad of other feelings.
When managing this, all the numbers and cents analysis will only go so far. Even with the knowledge of what to do, you still face these emotional pulls that put all that knowledge to the back burner. In such cases, it’s a financial therapist that you might need to work with.
They can help you manage the emotions you have around money, especially when there’s a psychological reason for the way it presents itself. A financial therapist can guide you on recognizing these tendencies and find ways to manage them when they present in the future.
For certain situations, no matter what a financial coach or advisor provides, it’s actually therapy (or financial therapy) that’s required to move you past your common pitfalls.
Finding a Financial Coach
To help with the knowledge portion of the equation, you can look to a financial coach to help teach you the basics of budgeting and debt management.
These individuals will provide you with tools, resources and ways to think about how you spend, why you spend, what you can spend and develop a routine for such efforts. They can also help those who are in debt find tactics to escape it, and begin looking towards longer-term goals.
The other part of the job is education, which can help you close knowledge gaps that you have.
To find a financial coach, look towards those with the Accredited Financial Counselor designation, or AFC. These coaches will have gone through some classes and education on the basics of finances, to provide the guidance that the AFC provides.
A word of warning though: Anyone can call themselves a coach. You’ll want to speak to the coach, trust that they know what they’re saying and possibly see about a reference in order to ensure there’s someone they have helped in the past.
Hiring a Financial Advisor
Financial advising or financial planning has become a catch-all for anyone providing any sort of financial guidance. But there’s varying levels of help.
Insurance companies and brokerages have used the term financial advising to hire folks that guide customers into their own products, with very limited service beyond that scope. But other financial advisors have shifted the business to focus on education and guidance through tricky financial situations. For those with a lack of financial knowledge, it’s this group that you will want to seek out.
When doing so, it’s important to evaluate how they’re paid. There are multiple business models in the financial space. Many fee-only financial advisors (of which, I am one) have built models that allow for the education component. For more rudimentary financial concerns, it’s not just about guiding the client, but also teaching them how to do it themselves. Then, once the basics have been secured, it’s moving along the conversation to more complex tactics and concerns.
To value the work, the type of business model will differ. There’s some that will invest for you, others that use a subscription-like service. Others still do this teaching through one-time plans.
To find the right one for you, look for a CFP® professional, and ask how they’re paid. The good news is, if you find the right advisor, they can help you with the education component. And, in many cases, recognize the shame you feel in the process, putting you at ease.
You can find a fee-only financial planner in your area by searching databases, like XY Planning Network or The National Association of Personal Financial Advisors (NAPFA).