Avoiding Financial Shame

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Summary

In this conversation, Louisa Larado discusses her personal experience with bankruptcy and the shame associated with it. She emphasizes the importance of open dialogue and seeking support to overcome financial shame. Louisa also highlights common mistakes people make when recovering from financial setbacks, such as avoiding the issues, isolating themselves, and overcompensating. She provides strategies for rebuilding financial confidence, including reframing mindset, using affirmations, setting achievable goals, and tracking progress. Louisa encourages individuals to celebrate wins and milestones along the way and offers questions for self-reflection.


Journal Questions

1. When I think about my financial situation, what feelings of shame or embarrassment come up? How have these feelings affected my financial decisions and self-worth?
2. What are three positive affirmations or new stories I can tell myself instead that I can use to shift my mindset about money and bankruptcy? How can I incorporate these affirmations into my daily routine?
3. Who are the people or resources I can turn to for support and encouragement? How can I engage with them more actively to strengthen my recovery journey?

Takeaways
Open dialogue and seeking support are crucial in overcoming financial shame and stigma associated with bankruptcy.
Common mistakes to avoid when recovering from financial setbacks include avoiding the issues, isolating oneself, and overcompensating.
Rebuilding financial confidence involves reframing mindset, using affirmations, setting achievable goals, and tracking progress.
Celebrating wins and milestones along the way is important for boosting self-confidence and reducing shame.
Self-reflection and addressing emotional blocks are essential for long-term financial success.

Keywords
bankruptcy, financial shame, open dialogue, support, mistakes, rebuilding confidence, reframing mindset, affirmations, achievable goals, tracking progress, self-reflection

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Disclaimer: The information contained on today’s podcast has been provided as general advice only. The contents have been prepared without taking into account your objectives, financial situation or individual needs. Before making any decision regarding the information, strategies or products mentioned on today’s podcast, please consult your own financial advisor or other professional first.

Chapters

• 0:00 Introduction: Avoiding Financial Shame
• 6:49 Factors Contributing to Financial Shame
• 13:48 Mistakes to Avoid When Recovering from Financial Shame
• 24:08 Strategies for Overcoming Financial Shame
• 31:33 Rebuilding Financial Confidence and Celebrating Wins
• 33:38 Practical Steps to Secure Your Financial Future
• 34:06 Regaining Confidence and Overcoming Money Mindset Blocks
• 34:32 Developing Lifelong Money Habits for Financial Success

Transcript

Louisa Larado (00:01)
Welcome to the Bankruptcy to Bliss podcast. I'm your host, Louisa Larado And on today's episode, we're to be talking all about how you can avoid financial shame. Now, this is a must listen to anyone looking to rebuild after bankruptcy. In today's episode, I'm going to cover how financial shame can really slow down your bankruptcy recovery. The top 10 mistakes people make when trying to recover from financial shame to get back on track.

And I'm going to give you an overview of your path to stability with practical steps you can take right away to ditch the shame and secure your financial future and regain your

Louisa Larado (01:30)
For those of you who might have heard my story before, but we went bankrupt in 2016 and the period in Australia is three years for our bankruptcy. So we three years of being officially bankrupt and before our bankruptcy we were doing quite well financially. And it was just a few bad decisions and bad investments and the property market and all these repairs and all of these things that of snowball happened to us, which

led to our bankruptcy as being the best way out at the time for us to get through that period. But when we decided to go bankrupt and made that decision, even though it was this big massive weight off the shoulders, there was also a lot of shame attached to bankruptcy. you know, a big part of that is that it's not something that's ever openly talked about. I've never spoken to anyone about bankruptcy before, which when we were facing the idea of going bankrupt,

I had no knowledge of it and I didn't even know it was an option for us originally because it's just not something openly discussed. And the only way I had previously heard about bankruptcy was from watching movies or like on TV or you hear about it on the news. So I had this, just this image in my head that bankrupt people are like this top.

businessmen that are trying to get out of their debts and I didn't understand it was just something that everyday people could do to help them shift their financial situation. So anyway we decided that bankruptcy was the right strategy for us and it did end up being a great way for us to get back on track and rebuild and have that fresh start and clean slate to work on and rebuild ourselves. However like I said in the beginning we didn't know anyone else at the time who'd been bankrupt and it wasn't until we

started opening that dialogue and being quite open about our bankruptcy that we actually learned that we did have some friends who'd been bankrupt but it was never something discussed.

initially when we were first bankrupt there was a big shame factor for us because like I said originally we'd gone from being quite well off, quite young and doing quite well financially to then losing it all. So obviously that's going to carry a bit of embarrassment and shame because

You think you perceive to everyone else as a failure and you're worried what people are going to think of you, you're worried about the judgment, you're worried that people are going to say, looks like they had it all and they lost it. you know, they weren't so successful after all. So that really started to worry us But then the way that we sort of got through this is we thought, no, you know what, we can...

tell the full story. We never kept it hushed. We were very open to friends and family members about it. Once we got over that initial shame factor, we knew the only way out was going to be to have some open dialogue and just sort of create awareness about what bankruptcy actually was and why we chose that decision. then

It wasn't so much of a people judging us based on our decision. People actually then saw the way that we explained it. That was actually quite a good financial decision for us.

And we felt like, you know, having that open dialogue, like I said, then we had friends who came out that they had also gone through bankruptcy. So it created a space where even though we only knew a couple of people who'd gone through bankruptcy, it wasn't widely discussed in our friend group. We still could openly discuss it and start that dialogue. So if that is something people are looking at and it shed a new positive light on bankruptcy, because obviously bankruptcy has quite a bad stigma.

So that was sort of how we got over it. And we've continued to this day, speaking openly about our financial situation. So with the hope that people can not only connect with it, but learn from our mistakes as well. Because, you know, what's the point in making mistakes and learning from it if you can't even share that knowledge with other people? And obviously, I've got to be open about my bankruptcy, my financial situation to create this page and this group so that people understand that it's something, you know,

It can happen to anyone, it's just the decisions you make. It's like another financial decision in your life. So it's sort of breaking that stigma.

I want to start first of all like so that's a bit of my background. So let me tell you a little bit more about why we do experience this financial shame. So usually if you're not really sure what what I'm talking about is I mean that feeling of sort of like that embarrassment or you're worried about others judging you worried what others think about you. You don't feel comfortable speaking openly about your bankruptcy or your financial situation. You definitely don't feel comfortable

reaching out and asking people to help you and the idea of it just makes you feel a bit like icky and not good. usually financial shame stems from

a few different sources. you need to choose your own self, what you think others are thinking about you or how you think you're going to be perceived or judged by others. And it's also society. So that's things like, you know, what you see on TV or what other discussions people have had about maybe some people who've gone bankrupt that might not be the best people. And it sort of attaches that negative stigma to it.

I'm going to break those things down even further because I think it's really important that we have a really clear understanding of what this is so that we can really get to the root cause and address it.

let's break down now where those sort of expectations or where those thoughts come from. first of all, you have your personal expectations and your self -worth. And this is often, big part of our self -worth.

our day -to -day society, what we see on media, what we hear people talking about, based, lots of people base their self -worth on their net worth. So how much money they have, how well they are doing financially. And obviously the two are not connected, however, a lot of people have, just because of the way society is, they have that belief that those two are strongly linked in self -worth and network. And so if you've gone through bankruptcy,

it can feel like a personal failure and it might lead you to internalize that shame and that self -criticism.

Now the other factors that can come into play is your family and cultural influences. you know, a lot of us grow up in with families or society or within our culture where financial stability is valued very highly. You know, we have different thoughts right now if you just think about it. I'm sure you have different thoughts or judgments or

preconceived notions of what wealthy people are versus what poor people are, what sort of habits they might do. So we've already got these sort of generalizations that we have in our mind. So when things like being broke or having to go bankrupt where you literally go back to having nothing again and starting fresh, these can be seen as taboo for a lot of cultures or families. And you know, these cultural norms can really influence those feelings of shame that

you have. So that might be a factor at play. Now the next one that's a massive factor for a lot of people is media and social narratives. So how do we see the media or TV shows or movies or the books we read? How do we hear about wealthy people? What sort of stories do we know about them? Are the wealthy people successful?

And if you've gone through a financial failure, that can be quite negative. And then often, like I said previously, my expectation and my understanding of bankruptcy prior to me exploring the option for my own life was what I'd seen on TV, because I hadn't ever spoken about it to anyone in real life. And I remember seeing on the media, always stories of these businessmen trying to get out of their debts or businesses that don't want to pay off the people that

they owe money to, so they file for a bankruptcy and you see it on the current affair shows and on news stories. So it had this real negative stigma to it. those sort of media and social narratives can really impact your own self -worth and the way you feel about yourself and contribute to that financial shame and feeling judged or isolated and like you can't openly speak to it about people.

And a really big one is just the fear of judgement. Now, we're all human beings. Doesn't matter if you're the most successful person or the least successful person in the world. Every single person in the world has that fear of judgement. It is completely just a human reaction to life. And I recently heard someone talking about on Oprah's show, she was speaking about how it didn't matter who she was.

interviewing it could have been any the most famous people royalty the Queen whoever it was every single person after they'd finished their interview with her like I said all right because I it doesn't matter who they are you still have that feeling of am I enough is that going to be okay so that fear that we have of being judged by friends family society colleagues it can just you know help perpetuate those feelings of shame and quite often

People worry about how others perceive their financial challenges and it's not usually true.

Most people think that everyone's expectations or their thoughts of them are a lot worse than they probably are. So this can really lead you to feeling, worry, that shame and that isolation that you can't connect with people because you can't be open and truthful about your own actual situational circumstances.

The final factor that usually comes into play here is the legal and financial situations. So if you've gone through the bankruptcy process, it's full on, it's a lot.

The whole process can be quite dehumanizing with like it's a lot of complex paperwork. There might be legal challenges. You might have had to go through courts and it just feels so overwhelming so it can feel quite isolating going through this process which then can lead to that feeling of that lack of self -worth and financial confidence and obviously shame.

A really important factor I want you to think about though, despite all of these things, is you have to remember that so many successful people that you know right now are doing really, really well have faced financial setbacks. And usually, the most successful people in life have usually faced the most setbacks. not always handed things on a silver platter. They're not bought into wealth. A lot of people have to learn through making their own mistakes.

And it's only those people that can, you know, withstand those mistakes and try and better themselves and learn and grow each time they make these mistakes or face a setback. And they see these setbacks as, you know, it's a great learning tool and a great opportunity for growth and knowing what not to do, but then they can take their success to the next level. And that's usually when you see people just fully break through to extraordinary

circumstances actually every single person that I've followed as a mentor has faced a really big setback in their life whether it be their childhood or different situations that they have to overcome so

It's a different way of putting your bankruptcy or your setback is that it is not failure. It is not failure at all. This is just the start of, you know, this great learning curve, this great opportunity to grow and, you know, just get reach your next level.

So at the point that you're at, you probably don't have much more to lose, so now it's only things to gain. And so by reframing your mindset, you know, obviously it takes a bit of practice to get to that point. But, and then by reframing it and then seeking support and learning from others, then this is when you start to overcome these challenges and rebuild your financial future.

So now I want to talk about some of the big mistakes people make when they're trying to recover from financial shame. So the biggest one that I see happening time and time again, and every person that I've spoken to about bankruptcy, this is often the case is they just try and avoid the issues. So they ignore the financial problems or they neglect to face head on the situation. this can then, because then you know that you're burying your head in the sand and this

can lead to you like crap. It makes you feel like, my god, not, I know I'm doing the wrong thing, but I don't know what else to do. And it doesn't make yourself feel good. And then this obviously leads to that shame as well. So avoiding the issue that might give you a bit of temporary short term relief from the problem. But the

main problem is just going to keep building and building and building and get bigger in the background. So this is definitely not something I would recommend you doing. The next thing people do that can be really detrimental is isolating themselves. So this is where they think they're going to face this all on their own. And to be honest, when we very first went bankrupt, we were like, no, we're going to do this for ourselves. We're not going to reach out to family or friends at first. And this didn't work for us.

way to isolating and I've seen this happen time and time again because of that people aren't comfortable in our society just talking about finances talking about how much money you have that's always a bit of a taboo subject so by not having that open dialogue about people's financial situations or having these people you can turn to about those financial situations this can really lead to feelings of loneliness or overwhelm and this can really impact your own feelings

of that confidence that you have about your financial situation. So definitely don't isolate yourself.

Now another mistake that is really common is people overcompensating. So this is where they start overspending because they're trying to make society or their friends or their peers or their loved ones think that they're still doing really well financially. So they go overspend and they're trying to prove that they have all this money even though they don't and they end up putting themselves into more debt, more financial stress and more financial strain. And then by doing that as well you feel

terrible about yourself after you don't feel good when you're spending like that just because you're worried about others judgments so then adding to this compulsive spending it's just going to lead to further financial strain and really impact your self -worth and your confidence and that shame factor.

Now another mistake people make is a lot of negative self -talk and this was a big one that I did initially when we went back perhaps because I felt really responsible like I was the main person that was responsible for managing the money in our household. I felt like I put a lot of pressure on myself and I was like, my gosh, you know, it's my fault. I've lost all this money for us. So then as a result,

having those negative thoughts like, you you can't, you're not good with money. You can't handle money. All these sort of thoughts and self -talk started going on in my head. So that constant berating yourself for your past mistakes, this is just going to stop your ability to move forward and make any positive changes. So avoid the negative self -talk. Catch yourself out when you notice yourself doing it. Because I can tell you none of it is true. Now the next mistake that a lot of people

make they don't empower themselves with knowledge.

So originally when we went bankrupt, I was just trying to go through the motions. It was so overwhelming. There was so much happening and I just didn't really know.

I guess, yeah, like where to start. It is a very overwhelming time and I sort of, first I just sort of to bury my head in the sand and not even think about money. And then I just tried to do the same things we were doing prior to our bankruptcy, so the way it was managing money and spending money and things like that. And neither of these worked for me. So it wasn't until I really took some time to learn about some different ways to manage my money. So I started doing a bit of reading and did a bit of research. started educating

myself on different strategies so I could find one that worked for me. There's no one size fits all in this situation. Obviously different people and different families have different ways that money works for them. So by not taking that time to learn these financial management and planning, can result to you just repeating the same mistakes over and over because you haven't expanded on your knowledge. So you're more likely to repeat past mistakes.

Now the next biggest mistake people make is comparing themselves to others and

It's very tricky because we live in a society where social media, everything's right in front of us and people only ever share the best parts of their lives. So it's very easy to think everyone's got this amazing life and they're doing all these amazing things without seeing the big picture. But when you start comparing yourself to others, it can just lead to feelings of this inadequacy and shame and it doesn't serve you, it doesn't serve them, it doesn't serve anyone. So instead of focusing on

where people, know, comparing yourself to other people, you can instead think, wow, this is something I can strive towards. If they're doing that, or it can be financial proof, if they can do these things, then why can't I? I can see that this strategy is working for this person, so I know that it can be something that could work for me as well. You could start learning from them, or you could just think, wow, that's great, and then focus on what you could do in your own life. So, judgment and comparisons don't serve

you at all. mean it's human nature like I said we're all humans so we're gonna have these things like judgment and comparisons that's gonna come up of course it is but it's knowing when you notice yourself doing it and picking yourself up on that and thinking okay well how can I refrain this could I look at this as inspiration could I congratulate this person for their success and feel great like joy and happy for them could I focus on what I could be doing in my own life to get to where that person is if that's something I really

want.

goals that are achievable, very specific measurable achievable goals. So it might just be having $20 left over before your next pay that you can put in savings or being able to afford to eat out one week with your family.

or something that seems realistic to you. So by setting realistic goals, what you start doing is when you start reaching these goals, you actually start to build your confidence again, because you're like, actually, I could do that. But if we're setting the bar too high, if we're setting these massive, maybe too long term goals, or just really unrealistic goals that we are very likely not going to reach, this can just lead to the feelings of frustration and further feelings of shame when you're not getting your goals met.

Now the next biggest mistake people make here is they don't actually track their progress. So if you're not, if you're setting, say, your goals, but you're not actually monitoring to see how far you've come, or if you're just sort of living on autopilot, so you're getting through week to week, so you're not, you might be paying all your bills, you might be budgeting your money really well, but you're not actually stopping to think, actually, I've managed to pay all of my bills on time this month.

and I still had got to go eat out one time with my family this month and I've got $50 that I managed to put aside for my holidays. That's a big win. So without tracking how far you've come or just looking back and seeing, wow, I only had this a few months ago and now look where I am. So if you're failing to monitor your financial improvements and like acknowledge these small victories, that can really diminish your motivation and your drive and wanting to keep going.

Thank

Now the next thing that is a big mistake that is all too common is ignoring your emotional health. if you only focus on making money or managing your money better. So if you and this is what I did at first massively this is which was one of the reasons despite us you know I learned a lot about it all these different courses and different money making and managing strategies throughout my bankruptcy. So I had a good

on the money side of things. However, we were still living paycheck to paycheck despite how much money we were earning and I couldn't figure it out. And it wasn't until I actually started looking at what were the emotional blocks that I was still holding about money and the bankruptcy and all these feelings like the shame factors and the self -worth and the lack of confidence and just my overall mindset. So when you start overlooking the emotional aspects of your financial shame,

are not addressing the underlying feelings, you're not going to be able to move beyond that. So you have to, as hard as it can be, have to stop and take a look within sometimes to address these real issues of why am I feeling this way? What beliefs am I holding onto? What thoughts or ideas or comparisons or judgements am I making about myself that just aren't serving me anymore? And then how you can move on from that. And once I change that aspect,

I looked at my mindset that was literally when the money started coming into our lives and opportunities started to come in so that was like the Rule the foundation and that's what I try and teach most people If you've listened to my podcast, that's my big thing is we can learn all this stuff about money But unless you work on your mindset and see what money blocks you have Limiting beliefs and ideas that you're holding on to blame this shame judgment Until you can look at how you can remove those facts

then

You might do okay, but you're never going to get to where you really want to be and you're not going to feel good about your money. You'll still be in that lack mindset. So definitely don't ignore your own emotional health and your mindset. And the final mistake I want to talk about tonight is immediate gratification. lots of people will focus straight away on just the short -term fixes rather than the long, they don't look at the big picture sometimes.

It might be borrowing money off someone so you can buy a new car but then not thinking, okay well how's that going to impact my relationship with that person if I can't pay them off straight away. So you're failing to see that or like I spoke about earlier what you've trying to overcompensate so you might still be spending. might feel like one of your lack of self -worth around money you might...

go shopping as therapy for that and then create more debt and more bills or more things that you can't pay for. might have massive lot of things on after pay. So you're seeing, seeking that short term gratification. So you think, it's giving me this good rush or it makes me feel really good because I've done this. But then you don't look at the long term and then this can lead to really big like.

just a lot worse problems further on down the track for you and definitely will create more feelings of shame and lack of self -worth. I definitely don't want that for you. So, how can we fix this? So I've talked about all the bad stuff now, let's start thinking about some solutions to these problems. So the first thing I wanna focus on is how you could start looking at doing some mindset shifts.

I'm very big on reframing things, looking at what beliefs are stopping you, looking at the things you're judging and focusing on how you can grow and learn from the situation. We have to remember the situations that have happened to us, whatever led to our bankruptcy or our financial setback, that has happened. Us worrying about it, stressing about it, overthinking it isn't going to change that fact. It's just what it is. Okay, so now how do we move on from that? How do we take that as, well,

These are the things I did before I went bankrupt or I had my financial setback and those didn't work because now this is where I am. So what could I do differently next time? So starting to looking at how you can learn and grow and be better. And I can tell you now I am better at managing my money than I ever was before now. I am better at finding different ways to generate money than I ever was before. So it's been such an amazing

process through my bankruptcy. The amount of new skills I have, the amount of new tools I have is just phenomenal. But that's only because I've taken the time and done the work and looked at how I can turn this situation around.

another strategy that might work for you is maybe thinking of some affirmations you could start introducing. So affirmations or I love Tony Robbins calls these incantations. So it's not just saying these things over and over, but actually fully embodying it and believing it. you might have some things, a couple of sentences or phrases that you just want to aspire to having that you say and you start filling into those emotions. So things like I'm worthy of having financial success and stability.

My past financial decisions don't define my future. I have the power to create and maintain a positive financial path or I'm learning and growing from my financial experiences. And there's a whole load more I can give you if you're interested. Just comment below and I can give you some more. But that's just a few examples of some affirmations you could just start saying to yourself every day or you might journal it out or...

Just, and as you're saying them, just start feeling what that would feel like, that actually to be true in your life and have that energy of those things starting to come into play in your life.

and it soon starts changing your mindset and the reason that that works is because your subconscious mind does not know the difference between reality and what people imagine. That's why you hear all of these amazing athletes that spend a lot of time visualizing their the best race or their beating their record their previous best record or whatever it is that they're doing seeing the game that they're going to play in their head.

That's a big part of training for a lot of athletes because people know the power of your subconscious mind in preparing and priming you for success. So that is why these things work and that they're spoken about. It's not just because they're some woo -wee sort of thing, but...

some hippie people do occasionally. There's actual science if you want to research these things behind them that shows that they do work and they do make an impact in people's lives. All right and the next thing that you can start doing and this is the biggest one I probably recommend after your mindset stuff is to start seeking support. So you are not you don't have to go through this on your own. If you're going through this on your own it's going to be so much

harder, it's going to take so much longer. And by opening up the dialogue like we did with friends or family or just people you feel comfortable, it doesn't have to be every single person. But by having that open dialogue, it creates that...

It sort of breaks down the negative connotation that bankruptcy has and it breaks down that stigma and the taboos of it because it becomes just a normal open conversation and people realise that if they have faced something like that that they're not alone. And even if they haven't, just being open to be able to speak to your friends or people that you trust makes you feel so much better because then you can get it all out in the open and you don't have to worry about them finding out some other way and then judging you.

explain it in ways that tell them that this is what has happened and this is you know what happened in my life.

There's a few other things you could start doing. So I suggest if you want to start looking at rebuilding your financial confidence as well. if you head over to the podcast, there is an episode of building your financial confidence and there's some more strategies here and these two sort of go hand in hand, but.

by rebuilding your confidence with your finances, so in realizing you are capable of managing your finances and you are capable of creating some money in your life again and just setting those little achievable goals, that can actually start to help reduce your shame as well, because you start feeling better about yourself and your shame and your self -worth are very closely linked together.

then celebrating wins and milestones once you hit them. So it's not all about the negative stuff that's happened.

Now I'm just going to leave you with a few little questions that you can think about, ponder about to yourself a few questions you can consider if you've got like a journal or a notebook you could just write these down

as you are thinking of them and I'll also list them in the comments. So the first one is, when I think about my financial situation, what feelings of shame or embarrassment come up and how are these feelings affecting my financial decisions and self -worth? So that's something you can consider.

The next question I want you to think about is what are three positive affirmations or new money stories I can tell myself instead that I can use to help start to shift my mindset about money and bankruptcy and think about how you can incorporate them into your daily routine.

And the final question is, who are the people or resources that I can turn to for support and encouragement? And how can I engage with them more actively to strengthen my recovery journey?

So can think about those questions. Definitely recommend journaling them down. And I also highly suggest if you are looking for support is reaching out inside the Bankruptcy to Bliss Facebook group. This is very supportive community that is filled with people that have gone through a bankruptcy and are looking at creating their new money story in a more positive way.

So I've created this community in order to be supportive and to help guide you so if you've got questions or You you're just not sure how to shift through something feel free to pop a question in the community You can post them anonymously if you don't feel comfortable Sharing them with your name, but like I said, it's a very supportive community That's there to help you so use that as a resource to if you need it to help you get through your bankruptcy shame

Louisa Larado (33:38)
Thank you so much for listening to today's episode. If you enjoyed what you heard on today's episode, I am excited to announce that in a few days I will be releasing my Bankruptcy Breakthrough Blueprint. Now, this is going to be a comprehensive program that's going to walk you through all the strategies that I spoke about on today's episode in a lot more detail, give you the exact strategies.

and tools. breaks down your money mindset, the things that are blocking you. It will give you a range of different strategies and techniques to look at how to better manage your money and create more money in your life. And it will will give you opportunities to create some financial stability and life long money habits to reach all of your financial goals and enjoy financial stability again in your life.

So if that is something you're interested in learning more about, then you can click on the link to join the wait list in the comments below.

thank you so much for listening. If you enjoyed today's episode, please don't forget to rate and review the Bankruptcy Bliss podcast and I'll see you on the next episode.