Many can’t face the reality of their personal finances, here are 5 ways you can help them fight financial denial


Attending a wedding during these times is interesting. Wear a mask, sit at a distance in the back, and chat one-on-one. And then observe people and relate the behaviors to what you heard, experienced and learned. Interesting, indeed.

A wealthy doctor with a flourishing practice attends all the ceremonies last on his scooter. She sees the air and the wind as her ally in these times of covid. In contrast, only the new air-conditioned car will do the trick for the struggling young couple, providing rides for guests as they brag about their new vehicle. The husband had just asked me the night before what happens if we default on the NDEs. Financial denial kept staring in my face throughout the week and these are my stories this time.

People don’t always solve their financial problems head-on. Denial is the comfort the brain offers to deal with small setbacks. But many extend this soothing balm to deeply rooted issues and prefer to wish them far away. Financial denial is a disease that the afflicted unwittingly choose for themselves.

An elderly couple strutted around in shiny silks, making sure people noticed. They make it known that children who live abroad provide for everything. Boasting was too much, but people were courteous. And then the host explained privately how he had to reluctantly put up with their long-distance plane fares. By the end of the week, stories of the couple crushing most of the other guests had surfaced and the audience for the stories had plummeted. The couple, however, remained unfazed.

The woman, who changed her child’s fancy dresses almost every hour, kept her smirk and spoke too little. It was as if she found others that didn’t match her league. At lunch her husband sat next to me and told me how he was making a few lakhs from all his businesses each month and how he was growing rapidly. Except that his father had regretted the capital lost in all the businesses the son had started and about paying the son’s monthly household expenses, just for breakfast. If you met the young couple, you wouldn’t guess that the family has no income.

Those who live in denial of their real financial situation are prone to several foolish habits: they put on a show; they weave stories about their wealth; they do not open mail regarding their invoices and contributions; they talk as if the winners around them are lucky; they spend as if the contributions took care of themselves; they don’t discuss their real finances with anyone; and they refuse to look at their bank statements or deal with the real facts of their financial life; fiction alone will do. The stories they tell others and repeat too often are considered by them to be the truth and do not solve the real problem.

This 50-year-old man, who lost his job a year ago, has still not informed his wife and family of his reality. They believe he is working from home behind closed doors. He hopes to find a job soon, but blames the rest of the world for his situation, yet remains reluctant and reluctant to speak to the contacts and connections he has made during his long years of work. After a conversation we had a year ago, we have spoken half a dozen times. He never brings up his job or his finances in our conversation. I just 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 feel the negative emotions of regret, shame, and guilt. They will avoid at all costs those who remind them of their reality. These are the dangers of denial.

There are five simple things people in denial can do, if they choose problem-solving over escape: First, gather the facts. Gather your assets, be aware of your contributions and do your calculations. Second, take the courage of the belief that you can start over. Don’t let the problems escalate. Anyone can make a fresh start. Third, set a deadline and use your resources and your network. Tell yourself that you are going to find a job, pay off your debts or control your spending in a year. Remember each day and move forward with that target. Fourth, don’t make the same mistakes over and over again. Don’t borrow if you can’t pay it back; do not swipe the card if you cannot pay the contributions; don’t spend when you can’t afford it. Fifth and most important, find an ally to help you. Confess to someone. Take help. Listen to the advice you don’t like or can’t hear, if you want to get out of your problem. Allow a sympathizer to guide you.

There are five things others can do, when they find close friends or relatives in financial difficulty they may need help but may live oblivious to their real situation. First, check your facts before speaking to the person. Be sincere about your desire to help. Gossip doesn’t help. Second, find someone close to you who can work with you. The father, wife, friend, anyone in the know who will easily cling to your offer of help, if he knows you are sincere. They will help you with facts and guide you with information, and also act as your go-between to break down the barrier and get the affected person to listen.

Third, have viable solutions at hand. No one likes conferences and restrictions; worse, do not indulge in the blame game. Help convert expensive loans through credit counseling; allow the network to be widened through referencing; identify buyers for assets that can be liquidated; stay focused on stocks. Fourth, don’t tell others about the person’s situation. Being the one they can confide in and trust is what will help them break out of denial and start tackling the real problem. Fifth, don’t assume that you have to bring in money or find donors to bail out the person. Protect their self-esteem while not becoming a scapegoat yourself.

There seem to be a lot of otherwise friendly people who can’t deal with the realities of their own personal finances. Make sure you’re not and see how you can help.

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


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