Taking Financial Ownership

The end of financial guilt and shame

By: Danielle Alexandria

This is why we feel guilt and shame for having debt, and here’s what to do about it

If you’re amongst the 70% of Canadians who have debt, you’re also likely familiar with its unwelcome companions: guilt and shame. They make it easy for even the most accomplished woman to feel stuck, deflated, or inadequate.

You actually have far more control over this situation than you think you do.

This is because debt is as much of an emotional experience as it is financial. So while it’s vital to pay it down, it’s equally important to learn how to manage our challenging emotions.

Let’s start with a fresh perspective on debt. I’ll then help you better understand your patterns, and finally, offer practical strategies to manage your emotions as you work towards becoming debt-free.

What is debt?

Debt is simply an agreement to receive something today in exchange for the promise to pay with future value.

Interest is charged to compensate the other party for not investing their money elsewhere and taking the risk that you might not repay the funds.

Are you the kind of person who doesn’t keep their commitments? (I’m going to assume not). Then there is no reason to beat yourself up so harshly, is there?

Debt is a choice, and it’s okay. Sometimes it’s the only available option. To make peace with your past, you might need to recognize that you couldn’t have done it differently. This enables you to move forward and invite in solutions rather than staying stuck in the endless loop of should have, would have, could have.

If you are struggling to accept your debt, ask yourself: was it all bad? Likely you had experiences or acquired things that you value. They shaped you into who you are today. Finding gratitude is key towards moving into acceptance, and that is the first step towards getting out of debt.

Not all debt is created equal

There are two completely different types of debt.

In fact, one is not really debt at all. Some debts are assets, while others are liabilities.

An asset produces profit or cash flow for the owner, while a liability drains it.

Real estate is a terrific example of “good” debt. You purchase an investment property with a mortgage at a reasonable interest rate. Your tenant’s rent covers the monthly payments. Ideally you make a small profit each month. You can also claim tax deductions and draw out cash against the equity of the asset. In time you can sell the property, ideally realizing a gain in appreciation. Other people’s money is making money for you in multiple ways. Because of these benefits, virtually all wealthy people embrace healthy debt as fundamental to wealth creation. They are “in debt” and happy about it!

What about student or business loans? They too are good debt because they enable you to produce more value in the future. The payoff may not be right away, but in time you’ll receive increased compensation or business revenue.

“Bad” debt is using a credit card or loan to purchase consumer items like clothing, electronics, furniture, vacations, etc. You are using other people’s money (the credit card company) temporarily, and often paying exorbitant interest rates to do so.

Consumer goods are liabilities because not only are you the one ultimately paying for them, they aren’t generating any cash flow to cover their cost. If you try to sell them in the future, you’ll find their value has plummeted. No matter how you look at it, they cost you money. Even worse, if you only make the minimum payments on your credit card each month, the cost can be 2-3x the purchase price. Is it worth it?

Despite these fundamental differences, most of us tend to lump all debt into one big pile and feel bad about it!

As you can see, one type steadily moves you towards wealth creation, while the other delays your progress.

If you have a mortgage, student, or business loan, these are smart investments, and you should feel good about them! If you have consumer debt, that’s okay too. Remember that it was just a choice, and you are doing something about it now.

The gift of consumer debt

Yes, you read that right. Debt can be a gift!

Debt can help you powerfully shift your energy from avoidance to taking ownership of your money.

Yes, you’ll have to muster up the courage to face your situation. But as soon as you prioritize debt repayment, you start building the required discipline for wealth creation.


Committing to making higher repayments trains you not to waste money on things that aren’t meaningful. Wealthy people are crystal clear on what’s truly important to them and avoid spending money on the things that aren’t.

Most importantly, once the debt is all gone, you will have automatically created the habit of making a sizeable monthly payment that you can now redirect to yourself.

With excellent habits in place and the funds to invest, you can now produce completely different financial results.

This is the power of debt.

A closer look at shame and guilt

It’s important to understand what our emotions are telling us, so let’s define them.

Guilt is the feedback that you’ve done something wrong. It can be very useful in guiding you to make better decisions.

Shame is much darker. It’s the feeling that you are bad or wrong. This is a self-love issue.

If you are feeling shame, it’s important to tap into its antidote; empathy. Rather than stay stuck in distress, instead recognize that your innermost self is calling for your love and self-compassion. Think of this part of you as an innocent child. How would you treat someone so precious? Can you forgive yourself for being so harsh?

Because shame is such a difficult emotion, we often turn to distractions to avoid feeling it. For example, it’s easy to be seduced by retail therapy when we’re stressed, but if we’re using shopping as an escape, we just inflict more damage. By the next day, the pleasure high has worn off and guilt (and more debt) sets in.

Here is an action item for you: take a moment to identify your financial patterns. How are you perpetuating feelings of guilt and shame? What healthier choices can you make instead?

Whatever you decide to do differently, recognize that you not only chose to love yourself, you also paid yourself by not spending unnecessarily. It’s important to counterbalance the original negative charge with lots of positive emotions.


All behaviour change begins with awareness. I hope that this article has helped you move to a place of greater understanding, acceptance, and self-forgiveness.

Learning how to tune into what you need, actively managing your emotions, and making healthier choices is the key to changing your relationship with debt. By giving yourself love and compassion you’ll be well on your way to shifting out of guilt and shame, and ultimately, becoming debt-free.


The views and opinions expressed in this column are those of the contributor and do not necessarily reflect those of Equitable Bank. Any information provided is for information purposes only and Equitable Bank makes no representations as to the validity, accuracy, completeness or suitability of any content. You should seek the advice of a qualified professional or undertake your own research before making financial decisions.

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