Do You Have Ostrich Syndrome About Money?

Financial disaster rarely comes about overnight. Even for those devastated by a sudden, tragic event, the foundation of their collapse lies in their daily habits.

Whether overcome by an unexpected experience, or living in a state of financial neglect, many people are in full-blown denial about their contributions to where they are financially.

‘How can this possibly be my fault?’ they ask.

It possible due to the ostrich syndrome. Ostrich what?

Ostrich syndrome definition: Denying or refusing to acknowledge something that is blatantly obvious as if your head were in the sand like an ostrich.

Simply put, ostrich thinking is the act of distracting yourself in order to avoid thinking about a problem. You close the mental “shades” to the windows of reality and hope that if you can no longer see the problems, then maybe they’ll just go away.

I have news for you, ostrich syndrome doesn’t make problems go away. It just makes them more expensive.

And when it comes to being in denial about money problems, ostrich syndrome makes the problems terribly expensive.

There are some signs of this problem that are obvious, but there are many more that are not.

Spotting the signs that hint to underlying financial troubles can often be difficult. While most people know they should get out of debt, earn more money and spend less than they make, there are plenty more subtle clues out there that could signal pending financial disaster in the future.

Here are 10 subtle signs that you have ostrich syndrome about money, and what to do about it:

1. You recently got turned down for a loan: If you have recently applied for a loan or line of credit either through a bank or a credit card company and have been turned down, you may have a problem that you’re in denial about. The sign of someone in good financial health is when they easily qualify for car and home loans.

2. You charge ordinary living expenses on a credit card: If you are unable to afford your ordinary living expenses and must resort to the use of a credit card to meet your monthly living expenses, you have by definition, ostrich syndrome. Accumulating credit card debt is the third leading cause of bankruptcy, behind a job loss (#2) and medical costs (#1). Credit cards are not a safety net. There a hangman’s noose.

3. You’re consolidating debt while still using your available credit: Debt consolidation can be a great way to dig your way out of debt, but not if you keep using your available credit. That just digs the hole deeper. Just because you can creatively make the problem look smaller, doesn’t mean you’ve actually made the problem smaller.

4. You use payday loans and think that it’s normal. Desperate times may call for desperate measures, and payday loans are a sure sign of desperation. To some, this may not be a big deal, since you pay the loan back with your paycheck, but know this – people in denial have the uncanny ability to disguise and downplay money issues in a way that makes them seem insignificant. Avoid these expensive short-term loans and learn to live with what you make, when you make it.

5. You depend regularly on parents, friends or others to help you out. Consistently relying on outside help to pay the bills is not a long-term solution. It’s a band-aid to a problem that will recur over and over until the core issue is fixed. Dealing with money follows a set of principles that, when violated, boomerang back and hit you in the face harder than you expect.

6. You spend more than 25% of your net income on housing costs. Housing costs include rent, mortgage, real estate taxes, utilities, insurance, repairs and maintenance. Spending a quarter of your income on housing is setting the stage for a financial train wreck. A home is not an investment, it’s an expense.

7. You finance a vehicle for more than 5 years. If you need more than 5 years to afford that new vehicle purchase, you are only kidding yourself. It’s best to get a less expensive, but well-made car that fits your budget.

8. You spend more than 10% of your net income on entertainment/gifts. This includes bars, restaurants, movies, music, books, gifts etc. There’s nothing wrong with enjoying the good things in life, but if you’re spending more than 10% on entertainment and you’re not financially free yet, you’re entertaining your way right into financial mediocrity.

9. You have outdated job skills. It is vitally important to save and invest wisely but without your income, saving and investing would not be possible. The best investment you can make is in yourself. Never let your skills get to the point of being irrelevant. Companies don’t keep people around that are irrelevant.

10. You use one credit card to make minimum payments on another. This is a bad idea. If you can’t find the money to make a credit card payment, using credit from another card will only compound the problem and cost you more money.

The line between a future of financial success and one of distress is thinner than you might think.

Unfortunately, many people don’t realize they’re on the wrong side of that divide until it’s too late. They know that things aren’t good, but they just don’t want to face up to it right now.

But the sooner they realize they’re having issues with money, the better chance they have of fixing them.

Just like many people ignore the warning signs of bad eating habits or of a deteriorating relationship, many people also ignore the signs of impending financial disaster. Please know this – most personal financial meltdowns happen over time. They’re rarely the result of a one-time event.

The warning signs are quite clear. You simply need to look and be honest with yourself.
Do you recognize any of the warning signs above in your finances? When these financial conditions start to pop-up, it’s usually only a matter of time before things get significantly worse.

Don’t be in denial. Make strengthening your finances a priority in your life.

You’ll be glad you did.

Be free. Nothing else is worth it.






  • Donny_2012

    I think the hardest part about debt is getting your family to be on board. I can budget and cut spending but if I’m the only one doing those things, it gets me nowhere real fast!

    • Monty Campbell

      I agree. Everyone has a different perspective about money. The best thing to do in a family situation is to show everyone “where the money goes” and the consequences of not saving (i.e. fewer or no vacations). Once they personalize it, they’ll understand better and be more inclined to support you. Hope that helps.

  • moneymom

    I think that one thing that holds many back is just gaining a grip on the paralyzing shame and guilt that go along with debt. It takes a lot to forgive ourselves for our mistakes, but if we do not then we will oftentimes just try to ignore the problem until it gets worse.

    • Monty Campbell

      Hi moneymom,
      I don’t think there’s any shame in a person recognizing they have a problem and then taking steps to rectify it. The shame is when someone knows they have a problem and they ignore it.

  • Hayley

    Great post! I don’t think I was ever in denial about debt or the amount, more like how much and how long it would take to pay off. People who just make the minimum payments are usually shocked to find out it could take 50 years or more to pay off their debt even if it isn’t a large amount.

    • Monty Campbell

      You’re right Hayley. There a hundreds of payoff calculators on the internet. It behooves a person to do the simple payoff math with one, so that they can see just how long it takes to pay debt off. Thanks for sharing.

  • Melanie H.

    I think another sign you are in denial is when someone you love and respect has been telling you repeatedly that you’re in denial and things must change, but you’ve ignored them or argued against them bitterly.

    • Monty Campbell

      That’s a good point Melanie. If someone you respect keeps bringing it up, it’s probably a blind spot that needs addressing.

  • Cliver87

    Best line from this post – “I have news for you, ostrich syndrome doesn’t make problems go away. It just makes them more expensive.”

    • Monty Campbell

      Glad you liked it Cliver87. Also, I got your other note and replied. Thanks for subscribing.

  • AJ

    One thing I will say and I really hope you read this, there are people that are in a bad financial position due to no fault of their own. They were the victim of someone else’s fraud. Please don’t take this as a negative comment. I just don’t agree that it is always their own fault.

    • Monty Campbell

      Hi AJ,
      I agree, but who is at fault is not really what’s important. What’s done is done. However, what’s important is that a person take responsibility for their financial situation. You may not be the cause of the problem, but you have to take responsibility for it. Taking responsibility for a problem is the first step in resolving it. Hope that make sense.

  • LWindham

    Great article! Unfortunately I know way too many people in denial. I just keep on trying & hope that one day they will figure it out. Never give up, that’s what I say.

    • Monty Campbell

      You got it. Never give up.

  • Danni

    Those who are living in denial usually don’t know they are living in denial. Makes me remember a comment I once heard:

    Person 1 “I think I’m going crazy”
    Person 2 “Crazy people don’t know they are going crazy”

    Great post Monty.

    • Monty Campbell

      That’s funny and true Danni. Thanks for sharing.