Denial and Poor Financial Health
Denial and Poor Financial Health
Denial is the bread and butter of American medicine. As a primary care physician, I see this phenomenon in all its stripes and colors. The typical story is the middle-aged obese man wh
o comes to see me after his first heart attack. After a few minutes of interviewing him, I have ascertained that he still smokes, has not begun his cardiac rehab exercises yet, and is back to his 60 hour work week. And he looks at me across the examining room table as if this is the most normal thing. There is neither shock nor dismay. There is no realization that he has undergone a life-threatening disease process and will likely be dead in the next few years. It is much easier to continue his current behavior than to confront the horrendous void that is staring him in the face. Denial, however, is not only relegated to the medical field. Similarly, the poor financial health of a nation lies in the balance and our behavior is not changing.
We metaphorically keep on smoking, drinking, and working too much.
And our bank accounts are hemorrhaging.
Consumerism
There is no greater connection between denial and poor financial health than when it comes to rampant consumerism. We live in a society that not only supports this denial, but feeds on it. Every commercial, every billboard beckons us to buy, buy, buy.
Strangely, these messages are foisted not only on the wealthy but even more so on the poor. Advertising campaigns focus on the more meager neighborhoods to hock their expensive electronic devices and latest fashion apparel.
Credit is still being granted in the form of home loans, car payments, and credit cards to those who can least afford it.
The message is clear:
Deny Reality. Deny your poor financial health! You deserve that purchase. Let us help you manage the expense.
It’s like handing another cigarette to the heart attack survivor.
Financial Ignorance
It’s hard to take care of your mind and body if you are uneducated about basic health care. The same can be said for poor financial health. The populace is sorely lacking in understanding the basics of personal finance. Not only understanding compound interest, but compound debt. Not only having some vague notion of Facebook stock, but the theory behind index investing and market efficiency.
We practice denial as a community when we accept our own financial ignorance. We create financial markets that are overly complex, instruments that are laden with fees, and advisors who have conflicts of interests.
Our poor financial health is not only an accidental byproduct, but also the purposefully intended outcome of years of scheming from vested interests including politicians, businessmen, and wall street.
Deus Ex Machina
Definition: Plot device whereby a seemingly unsolvable problem in a story is suddenly and abruptly resolved by an unexpected and seemingly unlikely occurrence, typically so much as to seem contrived.
We live in a get rich quickly society. How else can one explain a system that glorifies the lottery? We hire lawyers at the smallest infraction to hit the jackpot. We throw around the concept of lawsuits as if they are just another business strategy.
Inheritance has even become part and parcel of our waning financial health.
Why save now when good old grandma is going to kick the bucket soon and leave us rich?
And even our internet fantastic, silicon valley coated reality favors the overnight success story.
We are in denial. There is no talk of sacrifice or failure.
Final Thoughts
Like my patient destined to die from heart disease, our financial coronaries are clogged by denial and our poor financial health is starting to show. As a nation, we support consumerism, financial ignorance, and the windfall mentality.
We, here in this wonderful community, are great at encouraging our own journeys to financial independence.
Our lasting legacy, however, may just be simply teaching basic financial education.
I am proud to announce I will be a featured speaker at CampFI South. If you want to see a blog post delivered in person, consider attending. You can click on the image below for details.
Congrats on the speaking gig, Doc G! If I weren’t on nights that weekend I may have come just to hear the talk. Any chance of an audio recording to be released afterwards?
I completely agree on the denial front. It’s just so much easier for people to do the easy thing than it is to do the right thing. Usually about 5 minutes into a conversation I can tell if the person is open minded enough on any given topic to actually change their ways. After that point I either change the subject (the in denial person) or push harder (the eyes and ears are open to something new).
It’s our job to spread the word on financial independence. Hopefully some of the seeds stick and flourish.
TPP
I would love to see you there, but understand not everyone is going to just jump over to little rock! No idea about the audio.
Yes! Poor education and denial about bad financial habits. What’s worse is that even though people need to change, and CAN change their habits, they start to accept this life and future of financial doom… That acceptance turns to blaming others, like the president, or the ceo’s or the proverbial 1%.
All i can say is keep fighting the good fight. I am sure, you will save some stuck in this lifestyle. Cheers!
I hope so!
I hate to throw a damp cloth on the whole thing since I believe financial education will help some but here goes. Who are the worst at listening to medical advice and seeking treatment? Doctors and nurses. So what does that mean for finances?
It is true, all this might fall on deaf ears. But those who are ready to hear, will.
Well said. The scope our financial issues as a society is truly overwhelming. Just as in medicine, the solution starts with education.
Unfortunately, educating someone (in healthcare or finance) is just giving them the tools. In order to improve their situation, the patient (or student of finance has to have the willingness and discipline to actually do what must be done.
As personal finance bloggers its our job to both educate and motivate. No pressure though.
-Ray
We can bring the horse to the trough…..
I had never heard of the term “Deus Ex Machina”. It reminds me of those jokes where you are at a big chalkboard, showing all the steps of a mathematical proof, and the 2nd to last step says “and then a miracle occurs”. It is so true though how common it is to put our heads in the sand and somehow expect some magic to solve our problems.
And the magic rarely comes.
William Glasser wrote a book called Reality Therapy but most people found it too harsh lol…
Funny. Hiding from reality is not getting us very far!
It completely escapes me how we have gotten to the point of such terrible crisis as it relates to consumerism. I am in a third world country right now. And sadly, I see it creeping here, too. Yesterday, I popped into the Wal-mart owned grocery for some peanut butter which is not available elsewhere. What do I see? A Mayan woman, in traditional dress, with a baby strapped to her back, shoes clearly disintegrating. She is alongside her husband and he is rolling a basket. Inside are a few overpriced groceries (much cheaper in the mercado) in the basket. She stops and confers with her husband and then puts the Glade air freshener in her basket. I’m truly at a loss as to how the Mad Men have gotten to her. But they have…obviously. McDonalds, Taco Bell, Pizza Hut, and Burger King are all alive and well here as well with the American prices to match. Somehow, eschewing the delicious, wholesome, and inexpensive available tamales, chuchitos and rellenitos at the market is attractive to the masses and the poor. It makes me sad. Consumerism is everywhere. People are drawn to it like bees to honey.
I’ve been watching your adventures on Facebook. As you are describing local foods my stomach is growling! Sad to see our shameful habits are spreading.
It is a shame that schools don’t teach basic finance courses to everyone. It’s still not a core requirement across the US. My daughter’s school does have a finance class that is taken in high school so that is at least a positive sign.
I wish I learned back then!
These two phrases come to mind:
Common sense is not always common practice.
Knowing and doing are not the same.
Dr. Cory S. Fawcett
Prescription for Financial Success
And we can only help people know better. The rest is up to them.
It’s just proof life is all about the dopamine hit.
Yep!
My Dad died early because of denial as well. “Tough guys” are really good at denying medical problems until it’s too late.
Congrats on the speaking gig – what a great opportunity!
Thanks! Sorry about your dad. Denial does so much harm medically and financially as well.
Everyone practices denial – some more than others. It’s just human nature. I’m the first to admit I am in denial.
With finances, we know what is good for us- just like a good diet and exercise. It’s just hard to follow good practices and avoid shiny objects.
I think denial loses its power once we recognize it.