Setting Aside Shame and Blame in Financial Decisions

I’m a huge advocate of the “no shame, no blame” rule when it comes to money. But I think there’s some confusion about how the rule works. It’s not that you won’t feel guilt. It’s also not about avoiding responsibility. Instead, it’s about recognizing the zero-sum game of relying on shame and blame to make better money decisions.

Brené Brown, perhaps best known for her TEDx Houston talk on “The Power of Vulnerability” (she also did a great one on shame), has spent more than a decade studying vulnerability, courage, shame and worthiness. Through her work, she has found that shame isn’t a very effective tool for changing behavior. For real change, we need to reframe the conversation by understanding the role of guilt and encouraging people to take responsibility.

During a recent conversation between Dr. Brown and Tim Ferriss, it became clear to me that the “no shame, no blame” rule may be one of the most important rules we need to follow when it comes to personal finance. The level of importance grows when it involves a spouse or partner.

Dr. Brown writes that, “Shame isn’t a motivator of positive change. Yes, it can be used in the short term to change a behavior, but it’s like hitting a plastic thumbtack with a 100-pound anvil — there are consequences to the crushing.” What a powerful image!

Not only does shame fail at changing behavior, it can also trigger the very mistakes we’re trying to avoid. I imagine more than a few of us think that shaming criminals will prevent them from reoffending. Think of the judges who make people hold up signs declaring their crime. It seems like a perfect punishment for bad behavior.

But in 2014, researchers from George Mason University found “that inmates who feel guilt about specific behaviors are more likely to stay out of jail later on, whereas those that are inclined to feel shame about the self might not.” The data also showed that when inmates were defensive and avoided responsibility, they “were more likely to slip back into crime.”

It helps if we understand the true definitions of shame and guilt. I love how Dr. Brown explains the differences. Shame is something we internalize, and we capture it with a statement like, “I’m a bad person.” With guilt, we focus on the action and say, “I made a mistake. That’s really dumb.” In other words, we make shame about us, but guilt is about the event.

Think about the last money conversation you may have had with a spouse or partner. Imagine there was a financial “event,” and with the benefit of hindsight, you label that event a mistake. What happens next has probably happened to all of us at least once. One or both of you may have shamed and blamed the other for the mistake. One couple I know experienced such an event, and I have watched them shame and blame each other for the last decade. What good did that do?

We have to assume that on some level this couple and others like them use shame and blame because of a misinformed self-interest. They must truly believe that shame and blame will make things better and may even improve their relationships. Most of us are trying to prevent future mistakes without realizing that shame and blame won’t fix what needs fixing.

So to help you stick to the rule, I want you grab a hat and a Sharpie. No, really. Grab an actual hat and a Sharpie. Maybe one of those trucker hats with an oversize crown. Then, across the front, write, “No shame. No blame.” Every time you talk about money, wear your hat.

Yes, wearing a trucker hat with “No shame. No blame” written across the front sounds silly. But it provides a tangible reminder of the real purpose of the rule: to get better, however you define that, at making smarter financial decisions.

This commentary originally appeared September 8 on NYTimes.com 

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Carl Richards, CFP®

Carl Richards is the creator of the weekly Sketch Guy column in The New York Times and is a columnist for Morningstar Advisor. Carl has also been featured in The Wall Street Journal, Financial Planning, Marketplace Money, The Leonard Lopate Show, Oprah.com and Forbes.com. His simple but meaningful sketches served as the foundation for his first book, "The Behavior Gap: Simple Ways to Stop Doing Dumb Things with Money."

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