Financial Denial is another problematic money behavior. It involves a coping strategy of avoidance, or just simply not dealing with an issue. Rather than acknowledging the impact of what’s going on in reality—perhaps a pattern of poor money decisions, a financial setback, or the need to deal with a crisis—this person will just ignore the issues.
I run into financial denial fairly frequently with both financial planning clients and financial therapy clients. Sometimes a person may come to me for financial therapy with a specific identified problem, and as I do an intake of their financial situation, I’ll spot something that seems like a much greater problem than what they’ve identified that they want to work on.
If you’ve listened to this podcast for a while, you may remember that one of the four money script categories is Money Avoidance. Those whose money scripts tend to align with this category typically resist budgeting, investing, managing their finances, and even learning about money. So it makes sense that they might well fall into financial denial.
Something else that I want to bring out around financial denial is based on a personality and personal development tool called the Enneagram. You can learn more about this at the Enneagram Institute. The simplified explanation of the Enneagram is that most of us will have a dominant personality of one of nine different types. I’ve done a lot of Enneagram training, which has really informed my work in Internal Family Systems therapy.
What I’ve found is that financial denial will typically be found with the Enneagram type nine, which is labeled the “peacemaker.” The Enneagram Institute describes someone with a dominant type nine personality as “receptive, reassuring, complacent, and resigned.”
Type nines tend to demonstrate a kind of universal temptation to ignore the disturbing aspects of life and seek some degree of peace and comfort by numbing out. They tend to run away from paradoxes and tensions, seeking to transcend them and find simpler and more painless solutions to their problems. I think that’s a pretty good description of denial.
Financial denial has been found to be closely linked to compulsive buying behavior, gambling, hoarding, workaholism, financial dependence, and financial enabling. If we can resolve financial denial, we have a chance of addressing those disorders.
How do you know if you are in financial denial? First, ask yourself if you avoid thinking about money. Do you avoid looking at financial statements, forget to pay bills, or resist dealing with financial responsibilities (like filing tax returns) either in your work or your personal life?
Second, ask yourself why. What might be the good intention of the inner part of yourself driving the denial? Remember, the goal is not to shame or get rid of that part, but to understand and listen to it. This often involves uncovering our earliest memories, since typically mindsets like financial denial form around painful events from childhood. Our internal manager parts exile the vulnerable parts carrying that pain, intending to protect us from the emotional pain that we might feel if we think about or deal with money. That pain can be shame, guilt, fear, or any other difficult emotion.
Denial and avoidance probably did work to protect us when we were young and didn’t have the knowledge, maturity, or power to deal with a situation. As we grow up, however, financial behaviors meant to protect us no longer work, instead becoming increasingly problematic. This is why addressing the financial denial underlying those behaviors is so important.
Check out The Financial Therapy Podcast by Rick Kahler concerning this topic.
