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Financial Planning > Behavioral Finance

Help Your Clients Conquer Financial Shame, Bestselling Author Urges Advisors

By Dinah Wisenberg Brin

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What You Need to Know

  • Releasing shame around financial mistakes should be the first planning step, Tiffany Aliche says.

Along with offering retirement, estate and tax planning, financial advisors may provide the best service with an element that doesn’t appear on spreadsheets or software platforms: the personal understanding that enables clients to share their humiliating money mistakes.

Tiffany “the Budgetnista” Aliche, a podcaster, educator and blogger who wrote the New York Times bestseller “Get Good with Money: 10 Simple Steps to Becoming Financially Whole,” recently discussed shame arising from money errors on the Morningstar podcast “The LongView,” hosted by Christine Benz and Jeff Ptak.

“You know that your clients come to you riddled with shame. And you know that shame shields solutions. It is very hard to open that bank account, start paying down debt, start budgeting, if you can’t even open up the envelopes that are coming in the mail — the pink and the red ones to say you’re late or you’re behind,” she said.

Aliche, who Benz said has helped more than 2 million women manage their finances — women of color are her core audience — referenced her own financial missteps, which she also addresses in her new book, “Made Whole.”

After a solid track record with money based on instructions from her parents and being the go-to financial expert for her friends, she decided in her 20s to make financial decisions on her own “and promptly destroyed all of the things that my parents helped me build. I got into credit card debt. I was a victim of credit card scam.”

The experience humbled Aliche and also gave her empathy as a teacher, since she knew for the first time how it felt to not have enough money and wonder how she’d pay her bills, she explained. At first, though, shame hobbled her.

“After I made all these financial mistakes, I didn’t want to tell my parents, I didn’t want to tell my friends. And so, the shame kept me in the mistake longer than I needed to be,” she said, according to a podcast transcript.

“I think so many financial professionals forget that you need to tackle that first. You have to create a safe space so that way the person that you’re serving can share and release some of that shame, so then you start to interject solutions,” said Aliche, who compared this need to a doctor trying to determine what’s wrong before treating a patient.

“For me, that is the most important part of the work that we do as financial educators or advisors is to help people move past the shame. Because if you can do that, the solutions, not only will they take, they will stick, because I’ve had people make similar mistakes again, and that’s OK. But because they’re no longer ashamed, they go right into the solution,” she said.

Aliche encouraged financial professionals to encourage those they work with to be “paper towel” people — to focus on helping people clean up the mess rather than criticizing them over how they got into it.

Aliche draws on her experience as a preschool teacher and her own missteps to help people open up about their financial mistakes.

“You have to create an environment of nonjudgment, of kindness. And if you feel comfortable sharing some of your mistakes, like, ‘I actually understand because when I was XYZ age, or my daughter also went through …’ Sharing something of your own journey, whatever you feel comfortable with, makes people realize that they are not alone,” said Aliche.

“Because that’s really what people are struggling with. They think that they are alone in the mistakes that they’ve made. And if you can share with them, even if it’s not your stuff, you might say, ‘Ten years ago, I had a client that filed for bankruptcy, that XYZ, and now they’re flourishing.’ And so, offering up something to let people know that they are not alone in their journey is one of the best things that you can do.”

When Aliche starts working with people, she asks them to tell their story, “because people want to get it off their chest, like, how did we get here?”

While Aliche at one point studied to be a financial advisor, she decided, on suggestion from her mentor, to take a different path. “I wanted to be able to speak a little more freely,” she said.

Image: Shutterstock

Dinah Wisenberg Brin

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