Many can’t face their personal financial reality, here are 5 ways to help them face financial denial

Attending a wedding these days is interesting. Wear a mask, sit at a distance in the back, and have one-on-one conversations. And then observe people and relate the behaviors to what one has heard, known and learned. Interesting, indeed.

A wealthy doctor with a thriving practice attends all ceremonies last on her scooter. She sees in the air and her wind her ally in these times of covid. Instead, only the new air-conditioned car will do for the young couple in distress, offering rides to guests while they show off their new vehicle. The husband had just asked me the night before what happens if you don’t comply with the EMIs. Financial denial kept staring me in the face all week and that’s my story this time.

People don’t always solve their financial problems head-on. Denial is the brain’s comfort in dealing with small setbacks. But many spread that soothing balm to deep-seated problems, preferring to wish them away. Financial denial is a disease that the afflicted inadvertently choose for themselves.

An elderly couple strutted around in shimmering silks, making sure people took notice. They make it known that the children who live abroad are giving for everything. The boasting was too much, but the people remained courteous. And then the host privately poked fun at how he reluctantly had to put up with his intercity air fares. By the end of the week, stories of the couple making fun of most of the other guests had surfaced, and viewership for the stories dwindled. However, the couple remained unperturbed.

The woman who changed her son’s elegant dresses almost every hour maintained her smug smile and spoke very little. She was as if she found others who were no match for her league. At lunch, her husband sat next to me and told me how he earns a few lakhs from all his business every month and how he is expanding rapidly. Except that her father had regretted the loss of capital in all the businesses that the son set up and paying the son’s monthly household expenses, only at breakfast. If you knew the younger couple, you wouldn’t guess that the family had no income.

Those who live in denial of their real financial position are prone to various silly habits: they put on a show; they weave stories about their wealth; they do not open emails about their accounts and fees; they talk as if the winners around them are lucky; they spend as if the quotas took care of themselves; they don’t discuss their actual finances with anyone; and they refuse to look at their bank statements or deal with the real facts of their financial lives; fiction alone will do. The stories that they tell others and repeat too many times are believed to be true and do not solve the real problem.

That 50-year-old man who lost his job a year ago has not yet informed his wife and family about his reality. They think he is working from home behind closed doors. He is hoping to find a job soon, but he blames the rest of the world for his situation, while he is reticent and reluctant to talk to the contacts and connections he made during his long years of work. After a conversation we had a year ago, we have spoken half a dozen times. He never mentions his job or his finances in our conversation. I only hope for the best.

It’s hard for the rest of us to identify who needs help and risk having a difficult financial conversation. People choose denial because they don’t want to talk about their financial problems. They don’t want to experience the negative emotions of regret, shame, and guilt. They will avoid at all costs those who would remind them of their reality. Such are the dangers of denial.

There are five simple things people in denial can do if they choose problem solving over escapism: First, gather the facts. Gather your assets, be realistic with your payments, and calculate the bills. Second, take courage from the conviction that you can start over. Don’t let problems get worse. Everyone can make a new start. Third, give yourself a deadline and take advantage of your resources and network. Tell yourself that you will find a job, pay off your debt, or get your expenses under control in a year. Remind yourself each day and move with that goal. Fourth, don’t make the same mistakes over and over again. Don’t borrow if you can’t pay; don’t swipe the card if you can’t pay the fees; don’t spend when you can’t afford it. Fifth and most importantly, find an ally to help you. Confess to someone. Take help. Listen to the advice you don’t like or can’t listen to, if you want to get out of your problem. Let a good supporter guide you.

There are five things that others can do, when they find close friends or relatives in financial difficulties, they may need help but they may live unaware of their real situation. First, check your details before talking to the person. Be genuine about your desire to help. Gossiping doesn’t help. Second, find someone close to you who can work with you. The parent, the wife, the friend, anyone with knowledge of the situation who will readily latch on to your offer of help, if they know it is genuine. They will help you with facts and guide you with information, as well as act as your conduit to break down the barrier and get the affected person to listen.

Third, have workable solutions at hand. Nobody likes sermons and criticism; Worse yet, don’t get caught up in the blame game. Help convert expensive loans through credit counseling; allow the expansion of the network through referrals; identify buyers of assets that can be liquidated; keep the focus on actions. Fourth, don’t talk about the person’s situation to others. Being the only one they can trust is what will help them get out of denial and begin to address the real issue. Fifth, don’t assume you have to put up money or find donors to bail the person out. Protect your self-esteem without making yourself a scapegoat.

There seem to be a lot of nice people out there who can’t face the realities of their own personal finances. Check you’re not one and see how you can help.

(The author is president of the Center for Investment Education and Learning.)

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