I thought Halloween would be an appropriate time of year to talk about fears. Most people are more afraid of financial issues than they are of dying. One in three Americans worries about finances “all the time”.
Why do people worry so much about their money?:
- SHAME! Financial ruin is very shameful in our culture and people are afraid of being shamed by it. Other things we fear like dying or spiders are not shameful.
- The reality of financial ruin. Unfortunately, many people are closer to financial ruin than they allow themselves to think consciously about. It becomes a dark boogeyman that’s hidden instead of an issue that’s faced and overcome.
- Misperception that Financial suffering is “contagious.” Just as nobody wants to be around someone with a contagious disease, nobody wants to be around someone in financial distress in case it “rubs off” on them. This is nonsense of course, but it comes from the inner feeling that we’re a lot closer than we think to financial ruin.
- Financial catastrophe seems more real to people (more real than death) especially since the Great Recession. People know someone who lost a job, became homeless, or went bankrupt.
- Preserving their own image among their peer group. People feel so insecure, they cannot possibly allow anyone to think they cannot afford, private school, a certain vacation, a specific type of house, etc. They are afraid to be “found out”.
Unlike many other fears in your life, you have a lot more control over your finances than you might think. Here are five ways to face your financial fears and begin to make your financial situation better. It’s only a start, but it will definitely put you on the right road.
- Know if you spend less than you earn each month . The most important rule. KNOW that you are spending less than you earn each month after taxes. If that’s the only thing you do, you are better off than most people. Don’t guess, figure it out and know it.
- Quit busy-ness. You and your friends answer the question, “how are you?” with “busy” and it would be a social let down if you didn’t. Remember, all that busy-ness can cause a disorganized, out of control lifestyle and that causes a lot of spending. Think fees, speeding tickets, take-out, storage units, etc.
- Be deliberate and proactive. Know what you would do if a financial “rainy day” happens like a big car repair or root canal. Have some money saved for those items. Do not be in the position where you have charge them and pay them off monthly.
- Fix the holes in your life. It’s hard, requires introspection and possibly outside help, but if you’re unhappy with your body, relationships, job, or any other major emotional area of you life, you WILL spend more. You could even be out of control. Fix the issue and your finances will be better off.
- Actively plan for the future (retirement, goals, etc.). Know what you need for retirement and even if it seems insurmountable now, start saving as much as you can. Saving anything is better than burying your head in the sand about retirement or other goals.
You, too, can help resolve your own financial fears and be in control of your own financial life and this is the start. Think of how much mental space you will open up by removing those financial fears…