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Some people, especially those with money problems, try to forget about money altogether. They might leave their bills and credit card statements unopened, ignore their bank balances, or resist addressing their finances at all — whether it’s mounting debt, their credit score, or retirement or college funds.

This is called “money avoidance,” and avoiding something usually doesn’t make it better.

If you can relate to this, take heart. There are ways to fight these tendencies, starting with understanding the reasons behind your behavior. The first step is to keep reading.

The Prevalence of Money Avoidance

First of all, money avoidance is more common than you might think, so don’t feel alone. More than two in five Americans surveyed by MarketWatch Guides this year reported that they avoided looking at their checking account balance out of fear and tend to ignore a financial problem until it becomes a crisis.

And 28% of both Gen Zers and millennials surveyed by Credit Karma last year said they often or always feel a sense of financial dissociation. (Apparently it’s more common with younger generations, since just 4% of older Americans said the same.)

The Theory of Money Scripts

If you’re wondering what it is that makes you or someone you know prone to money avoidance, check this out.

According to research by Brad T. Klontz, a financial psychologist and professor at Kansas State University, there are four main money “scripts,” or belief systems, that are typically developed during childhood, adopted unconsciously, and passed on by our parents. Money avoidance, where money is seen as a source of fear, anxiety or disgust, is one. The others are money worship, the belief that money can solve all problems, money status, which can lead people to overspend, and money vigilance, which can make it hard to enjoy wealth.

The Dangers of Being Money Avoidant

Money avoiders may have very conflicting views of money, believing that money is bad and linked to greed but at the same time placing too much value on it by thinking it will improve their self-worth or social status, according to Klontz and his colleagues.

Their research found that money avoiders often have less money, struggle to stick to a budget, and are at a higher risk of overspending and compulsive buying. They may also be financially dependent on others, or may even sabotage their own finances (perhaps giving money away) in order to have as little money as possible.

The Vicious Cycle

It’s easier to change your patterns if you recognize your money script and when it may be unrealistic or damaging to your financial health, Klontz and his colleagues said. It’s also best to acknowledge if and how shame and anxiety surrounding your finances may be hurting you.

“Many people feel embarrassed about their debt, ashamed that they let bank statements pile up unread,” the American Psychological Association writes on its website. “But that shame keeps you stuck. Try to move past the self-blame so you can take some concrete steps toward financial health.”

The same can be said about anxiety. While it’s natural to want to avoid unpleasant thoughts or situations, avoiding things can actually make you more rather than less anxious. People who avoid thinking about money can get into more financial trouble, which can result in more stress, which can lead to more avoidance and so on in a vicious cycle.

Steps to Fight Money Avoidance

Klontz and the APA have some basic recommendations for people who are money avoidant.

1.    Consider whether your money script is unhealthy. When you were a child, maybe your parents or grandparents told you that “rich people are greedy” or that it’s “not okay to have more than you need.” Recognizing and challenging these messages can go a long way to helping you face your finances. It may end up being very freeing too.

2.    Be kind to yourself, and you’ll probably find it easier to make progress.

3.    Develop a plan for spending, rather than cutting back. In other words, instead of thinking of your budget like a diet, determine what you want to spend any extra money on. This will help you decide what isn’t a priority and help keep your spending in line.

4.    Take things out of your control by making as much as you can automatic. Have a set amount of your paycheck automatically deposited into your savings or retirement account every pay period. Set up email or text alerts to remind you when bills are due. Use software or apps to track spending and help create budgets with as little stress as possible. (One option is SoFi Relay, which has a budget planner that can categorize spending and spot upcoming bills.)

5.    Consider getting help. A coach or even mental health professional may be able to help you challenge your money script and change some of your ingrained behaviors. Perhaps they can even help you come up with a plan that plays to your strengths and works around your anxiety.

Ultimately, you shouldn’t feel ashamed or hopeless if you’ve been avoiding your money situation. If how you feel about money isn’t serving you, there are things you can do to reprogram your belief system — and your patterns. Just take it one step at a time and have faith that you can get back on track. And remember, once you’ve got financially healthy habits, all sorts of doors can open.

image credit: Bernie Pesko

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM2024120901

To Cut or Not to Cut

The Federal Reserve is approaching a critical inflection point in its monetary policy journey. Here’s why: Fed officials are increasingly indicating that interest rates may be near the upper end of the so-called “neutral rate” (i.e. the level at which monetary policy is neither stimulating nor restraining economic activity). And that means the possibility that central bankers will slow the pace of rate cuts. It could even mean pausing rate cuts altogether.

But for the upcoming December meeting next week, the stars seem to be aligned for another rate cut (following one in September, and one in November), despite some recent strengthening in jobs data. Perhaps the only thing that could knock them off course is this week’s inflation data, if it surprises to the upside.

Complicating matters for the market, the Fed has entered its communication blackout period over the weekend (when no official makes public comments until the next policy announcement). That means that investors will have to parse through the data and infer what the central bank’s reaction could be without any direct guidance.

But it’s not just about this meeting. If you recall, it took a while for Fed officials to gain the confidence to lower interest rates, so if they were to lose confidence it could take a long time for them to get it back. This could lead to some turmoil for investors.

Economic and Earnings Calendar

Monday

•   October Wholesale Inventories and Sales: Wholesalers often operate as an intermediary between manufacturers and retailers, serving as a key part of the goods supply chain.

•   November New York Fed Survey of Consumer Expectations: This is a measure of peoples’ expectations for inflation, jobs prospects, earnings growth, and more.

•   Earnings: Oracle

Tuesday

•   November NFIB Small Business Optimism: This measures how small business owners feel about current and future economic conditions.

•   3Q Productivity and Unit Labor Costs: These measures provide a breakdown of how productive workers were per hour of work and at what cost.

•   Earnings: AutoZone

Wednesday

•   November Consumer Price Index: The CPI is one of the most popular indicators for tracking consumer price trends and is a marquee release for market watchers.

•   Weekly Mortgage Applications: Mortgage activity gives insight on demand conditions in the housing market.

•   Earnings: Adobe, Nordson

Thursday

•   November Producer Price Index: The PPI tracks price trends that producers face and is down significantly from its peak earlier in the cycle.

•   Weekly Jobless Claims: This high frequency labor market data gives insight into filings for unemployment benefits. Jobless claims have continued to show a labor market that remains strong despite having cooled.

•   Earnings: Broadcom, Costco

Friday

•   November Import/Export Price Indexes: These indexes track the changes in the prices of nonmilitary goods and services traded between the U.S. and the rest of the world.

•   Earnings: Lennar

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.

The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.

SoFi isn't recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

OTM2024120902