The humiliation of being broke

This post comes from Sara Gilbert at partner site Get Rich Slowly.

Both my husband and I have spent some periods of unemployment over the past decade, and we have become intimately familiar with financial humiliation. Having had a red tag left on your doorknob notifying you of the impending shutoff of one of your utilities is not just a reminder you might soon lose a vital public service, it's a public shaming, and it's hard not to believe that the water bureau, along with a variety of other crafty creditors, is doing it with intention.

As author Wayne Koestenbaum has written, humiliation is a powerful motivation, and we are more likely to feel the emotion when faced with financial problems than just about any other time in our life post-seventh grade, especially in today's shaky economy. With a shameful quantity of Americans in poverty, with unemployment steadfastly setting records, with home foreclosures continuing to weigh down the housing market, more Americans than ever are experiencing financial humiliation.

On American Public Media's Marketplace program, Koestenbaum spoke about the difference between shame and humiliation:

I think shame is a private feeling. It may feel lacerating and terrible, but nobody necessarily sees it. I would say that humiliation requires a scene. It usually requires some act of cruelty or some catalyst from the outside, from some oppressor or tyrant. Let's say, a boss who fires you. And it requires the spectators who see you lose your job, the bill collectors who come knocking.

The spectacle of financial difficulty
Being in a financial mess is all about the spectacle. If you lose your job, there are the unemployment department employees who must approve your claim. There are the friends on Facebook who will see that you no longer have "employer" information on your profile.

Working, but struggling to pay the bills? You'll get those yellow and pink envelopes in the mailbox that demonstrate just how late you are. You'll get the collection calls. If things are really bad, you'll experience the true humiliation of having a process server visit your house, or a tow truck show up around midnight to repossess your car.

Food stamps, or the Supplemental Nutrition Assistance Program, seem designed to enhance the humiliation and let it trickle through your everyday life. The transformation of the program from funny-money bills to debit cards is a step in the right direction, but there are still spectators at every turn.

There are the employees of the county office who accept and approve your application, the employees at the grocery store, the people behind you in line, who will inevitably review the contents of your grocery bags and pay attention to what sort of car you drive. (If you think I'm wrong, check out the comments on any article on the Internet anywhere about food stamps. It seems that America's favorite thing to do is to judge what people spend their SNAP benefits on.) Post continues after video.

Koestenbaum says our desire to avoid humiliation is connected to both actual unemployment and also the fear of unemployment:

I think even fearing for the security of one's job is humiliating. The feeling of being watched or judged. Certainly, losing a job leads to concrete suffering and hardship, but also to a sense of loss of status and self-esteem, a sense of how you appear in others' eyes. All the markers of identity and dignity are trashed, in a way, when you lose a job.

Humiliation makes you hungry?
I've been thinking a lot about this lately because of recent news that, while record numbers of Americans are getting SNAP benefits, a third of those who are eligible aren't using the program. While many critics say that food stamps are abused, the numbers tell the opposite story, that, in fact, the stigma is too much for many of those living in poverty. Many millions of people would rather struggle to pay for food -- even to go hungry -- than suffer the humiliation of getting and using food stamps.

It's my belief that humiliation works contrary to our best interests during times of crisis, preventing us from reaching out and asking for help either from social services or family and friends.

Past-due bills and humiliation
Take past-due debt. Those who have suffered a financial setback large enough to start racking up late bills, and the phone calls that go along with them, are the best example of a group for whom humiliation works against personal interest. Collection agents are counting on your humiliation to convince you to pay your past-dues immediately. At the worst case, it's a cycle of attempts to avoid shame:

• You can't afford to pay the whole bill, so you don't pay it, and don't attempt to set up a payment plan with the debtor.
• A billing department or collections agent begins calling to make payment arrangements. Talking to them would be humiliating, so you avoid the calls.
• Late fees begin to greatly increase the total amount owed.
• Letters begin to arrive offering settlement arrangements. You take the one you can afford, even if you're paying far more than the original balance due.
• Or, you do not address the balance due until the creditor goes to court, garnishing wages or seizing tax returns, creating even morehumiliation and far more expense.

Avoiding humiliation in small doses (attempting to negotiate a payment plan, or in many cases, simply saying no to a purchase or financial commitment) ends up turning into a huge humiliation wallop, up to and including repossession and foreclosure.

Accept humiliation now to avoid it later
My best advice is to learn to say this now: "I can't afford that."

My children ask all the time when we're shopping, "Can we afford that?" or "Do we have enough money for that?" I look around at the other shoppers who are within earshot and I say no even though I'd rather say something more nuanced and prideful ("We can afford that but I'm not comfortable with you buying so many toys."). I've been through enough financial humiliation to know I'd rather own my budget than aspire to someone else's.

Being honest about the financial situation with my kids has helped me put my humiliation into perspective. There are far worse faults than not having enough money to buy the Ben 10 Transformer watch. I'd rather teach them that money is not unlimited than let them think I'm just being a meanie (or that I have unlimited funds, until the process servers arrive, that is). And sometimes it's great to take a call from some obscure-but-well-int​entioned nonprofit and say to the closer on the phone, "We have absolutely no money for that."

It can hurt to try, but you should anyway
It's our nature to want to avoid pain now at any cost, even greater pain later. Taking it in small doses is a little like an inoculation: Keep doing it, and eventually, you'll be humiliation-resistan​t. And hopefully in a far better financial place.

More on Get Rich Slowly and MSN Money:

• How my generosity got me $8,000 in debt
• When to walk away from a bad mortgage
• Help! My debt snowball is melting!
• Census paints grim picture for seniors
• 5 surprising facts in US income report
• Do I have too much debt?