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Pay Attention! Personal Finance is Important.


"You're never afraid to open your bank statements when you're living within your means."

-Jane Bryant Quinn


I'm sitting at my desk, heart racing. I'm a little sweaty. I'm working at an investment firm in downtown Minneapolis, trying to work up the courage to talk to my boss about getting a raise. I have a feeling that I'm being underpaid; if I left they would have to replace me with someone more expensive. They might even need to replace me with two people. This should be easy for me; I'm not asking for my salary to double. I just want to be fairly paid.

I struggle. The only thoughts running through my head are negative. I'm not ready to have a debate when my boss says "no." I'm uncomfortable "bragging" about myself, trying to justify my worth.

I get up to walk toward his office. My hands are shaking. As I get to his door, I keep walking. I punt. I can't stand the thought of having this conversation.

Looking back, I am confident that I would have been given the raise I wanted. Instead, I took the route that felt easier at the time. It cost me in the long run.

financial denial is easy but not good

Financial Denial

Believe it or not, there is a term for the kind of behavior I demonstrated. It's called financial denial, and is the tendency for people to ignore their personal finance situation. It's a way to ease the emotional discomfort that comes along with the state of our finances. People who follow money avoidance money scripts often ignore their finances as a way to avoid thinking about it.

This doesn't just show up when we avoid talking to our boss about getting a raise. It shows up in several different ways.

  • Not looking at statements, bills, or accounts

  • Trying hard to forget about our financial situation

  • Avoiding thinking about money

  • Not talking about money, even when it's necessary

  • Not saving for the future

  • Denying negative feelings about money

Even though it seems like a good idea in the short run, it doesn't do us any good in the long run.

financial deniers suffer in the long run

Vicious Cycle

Sometimes we know we've made mistakes in the past, and our brains are very good at helping us to not admit we've made a mistake. Sometimes we craft stories that makes it someone else's fault. Sometimes we attribute our mistakes to events outside of our control. When we have no other choice, the best way to avoid facing our reality is to simply not look.

However, by sticking our heads in the sand we end up making the situation worse. When the situation gets worse, it brings out even more intense negative emotions which in turn lead to our denying the situation again. And on and on it goes. It's a vicious cycle.

financial denial vicious circle

It's Not Caused By Lack of Money

It's easy to think that this kind of phenomenon would happen to those who don't have much. After all, a lack of money tends to lead to money issues and stress. While that's true, a lack of money isn't a cause of financial denial. You don't have to be poor, incompetent, impulsive, a shopaholic, or stupid to turn to financial denial. Many people who avoid thinking about their financial situations are very successful in other areas of their life. They understand the need to make smart decisions with their money. Unfortunately, their money psychology gets in the way.

Be Present

Taking steps to be present, mindful, and aware of your financial situation is the first step toward making positive change in your financial life. Understand that it's not easy to change behavior, especially when the alternative is to face intense negative emotions. If you are able to get to the point where you don't need to deny your anxiety, can recognize your negative emotions, and learn to be comfortable with doing the hard emotional work, your situation can gradually start to improve over time.

money mindfulness and financial success

Take small steps, learn to recognize negative emotions, and pay attention to what needs to be done, and you'll make progress. Live intentionally.

Read More:


Charles Gaffin (ed.): Client Psychology

Dorothy Durband, Ryan Law, Angela Mazzolini (eds.): Financial Counseling

Brad Klontz, Sonya Britt, Kristy Archuleta (eds.): Financial Therapy

Brad Klontz, Ted Klontz: Mind Over Money


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© 2019 Hagen Personal Finance LLC



About the Author

Derek Hagen, CFA, CFP, FBS, CFT-I, CIPM is a speaker, writer, and coach specializing in financial psychology, meaning and valued living, resilience, and mindfulness.


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