Wealth guilt is a relatively new term but not a new experience. Some might compare it to or find similarities to survivor’s guilt. It can be a vague and difficult feeling to describe, but it’s a reaction to socioeconomic inequality.
I grew up in the Bronx. New York City’s poorest borough. My dad worked as a chef and my mom left the workforce for over 10 years to raise five kids. Yep, I come from a large family. We didn’t have a lot, but we had everything we needed and sometimes extra. I always got a new pair of shoes at the start of the school year and another in the spring. We would get at least one item from our Christmas wish list. One year I asked for a dictionary, another year I got the Casio keyboard I wanted, and let’s not forget the Furby and Giga Pet I received!
Recently, two of my girlfriends and I went out for dinner and we talked about growing up in the Bronx. We have been friends since junior high school. We exchanged memories of teachers and classmates. One tradition we had was to go to McDonald’s across the street from our school about one Friday a month while we were in middle school. As we talked about this, one friend reminded me she couldn’t believe that I got a $20 allowance. It was not weekly, but once a month, maybe twice, my dad would give me $20. I knew that it was unique amongst our group of friends but didn’t realize how extravagant it seemed to them at the time.
Birthdays were special in our family. For our birthdays we could choose anything from the menu. I remember one year, one of my sisters ordered a lobster for her 8th or 9th birthday! Would you consider this middle class? It didn’t feel like the middle class but when I look at it now, I guess we were. It didn’t feel like middle class as a teenager when I didn’t have the same brand name clothes as everyone else. We had a roof over our heads, both of my parents had cars, albeit older cars, in a city where public transportation was readily available, and we never went hungry. Looking back now, we were very fortunate.
When my parents separated, financially things were difficult. Life changed. We didn’t celebrate birthdays in the same way we once did. The past-due notices piled up on the kitchen counter and we stop getting things like new clothes for the start of the school year. Cereal and milk became frequent meals and we moved from home to home. We spent a couple of months with one family that took in my mother and her five kids and another set of months with another family. But we had a roof over our heads and there was always something to eat.
I first experienced wealth guilt when I received a pay raise a few years ago. I was expecting a raise, but it wasn’t until I received the official notice that my pay had increased and that I would cross over into that six-figure mark this feeling of dread came over me. What should have been a happy, exciting, and grateful moment was instead filled with guilt.
Unlike many people I know working a 9 to 5, I really enjoyed my job. I enjoy going to work and I enjoy the work I do. My job was difficult in the best of ways.
My job was emotionally challenging yet rewarding. I worked long hours, traveled more than I had ever imagined, and missed out on last-minute meetups with friends. The job was hard. Despite the challenging work, I couldn’t get over the feeling I didn’t deserve this new pay increase.
This approximately 7% change in pay was wrecking me. What was the difference between getting paid $94,000 and $100,000? Was the combination of enjoying my job and getting paid well the cause of my guilt?
When I was 24, I started a job that more than doubled my salary. I was earning about $31k a year and accepted a job earning about $72,000 a year. After working in the new position for just a month, I could understand why the more challenging demands equated a higher salary. It was exhausting! But I loved every minute of it. I didn’t feel guilty about this salary increase.
It was inexplicable why that initial jump in salary didn’t affect me the same way crossing into the six-figure mark did. There was something about that six-figure number I couldn’t shake. It was wealth guilt.
As my income increased, I analyzed my spending habits. It was during this overdue financial analysis that wealth guilt kicked in. After calculating expenses and savings I had a lot of money left over. (A lot is relative.) . I believed the lie that I was undeserving of a high income as a single woman with no children.
Perhaps it was because during that season, there was a lot of talk about the 1% and I now was petrified I would be a one-percenter, was I? I couldn’t quite put my finger on it. I talked to my roommate about it and of course, I couldn’t really explain to her why it felt wrong.
Perhaps it was that I knew the financial struggles of my very own relatives. Their daily struggle to pay the bills, keep the lights on and get out of debt. Yet I had money to live, save and spend quite comfortably. Possibly it was the internal struggle to not just be an ally for the poor, mistreated, underprivileged and disadvantaged, but to be a part of them. What if the change in my financial circumstance would just magically turn me into someone who just “didn’t understand?”
I wanted nothing to do with this “new” money. I just donated it all away. But even that didn’t feel good. I’m not being overly dramatic as I try to explain the discomfort and guilt I felt with just the thought of receiving the next paycheck. The amount of wealth guilt was high. It really didn’t make sense.
There were some underlying lies I was believing including that I didn’t deserve wealth, that wealthy people were bad and greedy, and people like me couldn’t be wealthy.
Sam, over at Financial Samurai, wrote an article that put this term, wealth guilt, on my radar. He writes about his struggle with wealth guilt and how growing up surrounded by poverty has shaped his relationship with money.
This increase in pay didn’t make me wealthy. However, it created another steppingstone to the journey of financial wellness. I kept my living expenses low by having two roommates even though I didn’t need them to cover my living expenses. I invested over 15% of my income in retirement accounts. My charitable giving was about 12% each year. My emergency fund and regular saving accounts grew. I helped relatives and friends who needed assistance. Even when I was making minimum wage, I made giving a part of my budget. Generosity and gratitude were key components to overcoming the wealth guilt.
It took me a few journal entries, conversations with close friends, and prayer to get over the feeling of wealth guilt, and shame. I shouldn’t feel bad about having money. I should be thankful. Grateful. A paradigm shift and redefining what wealth looked like helped me overcome wealth guilt. Believing that I was worthy of wealth and most importantly, financial security was something I needed to believe.
I am not wealthy, but I am building my wealth slowly. And you know what, I am okay with that.
Sick of paying a hefty tax bill each year? Here are four simple ways to…December 30, 2019