Are you in denial about your finances? Mayo Clinic explains that denial is a coping mechanism that gives you time to adjust to a distressing situation. Being in denial with your finances is a way to protect yourself by refusing to accept the reality in your life.
Being in denial is helpful at first, but in the end being in denial about your finances is harmful. The side effects of being in denial about your finances are overwhelmingly negative.
Here are five side effects of being in denial about your finances.
This is adapted from a 12-step program, but made applicable to your financial life!
1. Disabled feelings
Your finances aren’t where you want them to be, but instead of doing something about it you proactively disable your feelings. You may be spending more than you earn each month and your debt is piling up. The bills are unopened, and your student loan is in default. Or maybe you have no debt, make a ton of money, but have no savings or plan for your retirement.
You don’t allow yourself to think about the situation or feel anything. Instead you feel numb, paralyzed, stuck, and trapped.
2. Lost energy
Even though you try not to think about your financial situation, your brain can’t forget the reality. The bills still need to be paid. The result is anxiety. You stay either stuck in the past, upset about financial decisions you already made. Or you feel dread towards an uncertain future.
This anxiety that takes up an enormous amount of energy that physically effects your body. WebMD reports that avoidance and staying in denial can lead to fatigue, headaches, nausea, and stomach pain.
3. Prevents growth
When you stay in denial about your finances you rob yourself the opportunity to grow. Your student loans won’t pay themselves. Nerdwallet reported that more than 10% of student loan borrowers are in default. By denying your financial reality you end up further going in debt as the interest grows on your loan.
You’ll either spend a lifetime paying interest on debt or earning interest on your investments. When you step out of denial you can see clearly where you are now, determine where you want to go, and have a plan to get there. Your money can then grow and start working for you.
4. Tense relationships
If money issues aren’t addressed your relationships will suffer. When you’re in denial what you think you’re hiding is often blatantly obvious to those around you. Do you really think your spouse doesn’t know about your credit card debt and new purse you bought that you can’t afford? Are your friends not aware that you lost your job and income?
Your reality will show up and impact these relationships. Without clear communication about money conflicts come up. Couponcabin.com showed that 20% of people surveyed had experienced a “friend break-up” over money.
Get out of denial and break the financial ice by having conversations like, “That restaurant is a little pricey can we have a potluck game night instead?”
5. Lengthens the pain
Your financial stress does not have to last a lifetime. With denial you think that the amount time spent dealing with a painful situation is shorten. Instead you lengthen the pain and time to reach financial security. Think of it like ripping off the bandaid. Urban dictionary describes that phrase as, “To tell someone the harsh truth knowing its gonna hurt.”
You can just rip it off and it hurts, but the hurt is soon gone. Healing can then occur. Denying your finances is just going to be slowly ripping off the band aid. It will be a constant struggle that keeps nagging at you.
Those are five side effects of being in denial about your finances. Stop denying your financial reality!
P.S. Ready to step out of denial about your finances. Let’s rip that bandaid off and get er’ done! I only have two spots open for one-on-one money coaching sessions in March. Check out the details here and save your spot!