Letting Go of Guilt

A few years back, I made a mistake. A pretty significant one.

In December 2022, we sold our business. While I had diligently paid our quarterly tax estimates, I completely failed to account for the massive income from the sale. I filed extensions for all our business tax returns, but the remaining taxes due? They didn’t get paid until much later in the year.

I could list a million excuses: I was swamped, my CPA didn’t explicitly tell me to pay more, and so on. But the truth is, it was an oversight on my part. And the consequences? The penalties and interest were substantial. As my mom would say, “Education is expensive.”

That costly lesson got me thinking, and it prompted some eye-opening research.

Turns out it’s a common feeling. In fact, 76% of people have felt inadequate or guilty about how they’ve managed their money in the past. (See more details here). These figures might surprise you:

• 36% of Americans feel guilty about their spending habits, and a staggering 31% feel ashamed of their financial situation.
• Nearly half (48%) of Americans avoid thinking about their finances due to stress, with younger generations leading the charge (Millennials at 62%, Gen Z at 52%).
• More than a quarter (28%) fear checking their finances because they fear seeing how much they’ve spent.
• Nearly one-third (31%) are haunted by a specific reckless purchase, which jumps to 43% for Millennials and 37% for Gen Z.

Holding onto this kind of guilt isn’t just uncomfortable; it’s detrimental. It can negatively impact your mental health and well-being, potentially leading to depression, anxiety, reduced self-esteem, hindered personal growth, and even strained relationships.

Moreover, this mindset is toxic because it cements an internal script: “I’m not good with money,” or “I’ll never be rich.” Last week, we discussed how changing your habits actually involves changing your identity. This week, let’s delve into practical steps you can take to let go of the guilt you have been harboring.

If shifting your relationship with money to heal your own financial regrets isn’t reason enough, consider this: did you know that money scarcity and financial trauma can actually be passed down to your children?

If you’re grappling with a scarcity mindset or regrets, it’s time to release that guilt. Please understand this: everyone—and I mean everyone—has made financial mistakes.

Maybe you:

• Financed a new car you couldn’t truly afford.
• Bought too much house.
• Took out student loans unwisely in college.
• Spent frivolously on credit cards.

Or perhaps it’s what you didn’t do:

• You didn’t start saving until your 40s and now feel hopelessly behind.
• You neglected to pay your taxes for several years.
• You knew you needed to have a difficult conversation with your spouse and didn’t.

Beating yourself up over past actions or inactions only compounds the problem. It’s time to break free.

A Practice for Letting Go

Here’s how you can begin to release financial guilt and move forward:

1. Acknowledge and Accept Your Guilt: Don’t try to suppress or deny these feelings. Recognize that guilt is a natural human emotion.
2. Identify the Source: Reflect on the event or situation causing your guilt. Understanding the root helps you address it directly.
3. Make Amends (If Applicable): If your actions caused harm to others, take responsibility. Apologize or make reparations to right the wrong, if possible.
4. Learn from the Past: Consider what valuable lessons you can extract from the experience. This insight can help prevent similar situations in the future and develop new coping mechanisms.
5. Practice Self-Forgiveness: Forgive yourself for your mistakes. Understand that everyone makes errors, and you are not defined by your past. You are capable of growth and change.
6. Engage in Self-Compassion: Treat yourself with the same kindness, understanding, and patience you would offer a trusted friend in a similar situation.
7. Focus on the Present: Redirect your energy from dwelling on past regrets to the present and future. Engage in activities that bring you joy and a sense of accomplishment. The power to shape your future is in your hands.
8. Seek Professional Help: If you’re struggling to let go of guilt and it’s significantly impacting your life, consider seeking help from a therapist or counselor.

Self-compassion and self-forgiveness are crucial for truly moving forward. You cannot change the past, but you can start today to change your future.

And here’s the cool part: when you take action to heal your financial relationship, it creates a powerful ripple effect around you. As you uplift yourself, you’ll inspire those in your sphere to do the same.💜