Lifestyle

How to Get Over Your Biggest Money Fears

Have you ever heard of the acronym for FEAR? It’s False Evidence Appearing Real. Many times we create a fear about money issues that just ends up holding us back. The National Foundation for Credit Counseling found that 77% of Americans admitted to having financial worries, and having insufficient savings was the top fear. So instead of letting your fears turn into beliefs that you’ll never get out of debt or save enough money, lets look at how you can get over your biggest money fears right now, so you can start building a better financial future.

Fear: Not enough savings

I always recommend that you save 3 to 6 months salary for an emergency fund, since life can throw some pretty shitty and expensive situations your way. You should also be contributing every year to a retirement fund. If you’re finding it difficult to do either or both, the easiest way to start saving is to automate it. You can have money transferred automatically from every paycheck into a high interest savings account or retirement fund so that you don’t even think about it, and can adjust your spending accordingly. I wrote a whole post on how to do it: Make Your Savings Automatic.

Fear: Not being able to pay off debts

If you’ve racked up all sorts of different debt, from credit card to student loans, car loans and medical bills – things can get pretty overwhelming. Instead of putting it into your head that you’ll never get out of debt, set yourself up for success by using the snowball debt elimination method. This involves committing to paying at least the minimum on every debt, and putting everything else that you can into paying the smallest debt first. You then move on in order of size, using the payments from the smaller to debts to now help pay off the larger ones. Studies prove that people who use this method are more likely to pay off all debts than those who tried to pay all their debts at once. Although number-wise, it may make sense to tackle highest interest debt first, it’s argued that people trying to reduce debt need “quick wins”  in order to remain motivated toward debt reduction. For more info and examples, check out Wikipedia’s explanation.

Fear of not saving enough

Fear: Can’t afford health insurance

A quarter of U.S. adults are worried about health insurance, either not being able to comfortably afford it or not having it at all. Solve this one by doing your research using a comparison site like ehealthinsurance.com to find the best option for you. Keep in mind that signing up for your employers policy may not always be the cheapest option since insurance companies could be basing premiums on the overall health of the group. I personally chose a health plan that is a low-cost, emergency-only plan that also covers preventative care. Learn more about it in my post Overpaying For Health Insurance Makes Me Sick.

Fear: Crappy credit score

The survey found that 65% of adults haven’t reviewed their credit report in the last year, and 60% have never even bothered to check their credit score at all. When it comes to your score, knowledge is power, and that power is FREEEEE. Just go to annualcreditreport.com and find out what’s going on. This way you can fix any mistakes that could be hurting you, and find out ways to reverse any damage that’s been done. The good news is that time can heal some of the poor decisions from your misguided youth, but you need to start the repairs now. Read up on how to do this: 12 Ways to Improve Your Credit Score.

Fear: Losing money in investments

Losing money is never fun, but this fear could be stopping you from making money. If your debts are paid and you have some money to invest, you should attempt to get over your fear of loss by diversifying. Putting some money into stocks and some into bonds can help to losing money fearbalance things out and not be so risky. You’re not alone on this fear – nearly half of U.S. households don’t own any stock right now, even though the average annualized returns over the last 20 years for the S&P 500-stock index have been about 8% (way more than other traditional investments). Here’s a post on How to Get Started With Investing.

Fear: Getting canned

If you’re constantly living in fear of getting fired, I’m sorry to say it, but you’re probably going to get fired. What are you attracting into your life, and how will this fear affect your work ethic? Make sure you’re putting your all into your job, and have the belief that you deserve your job because you’re the best at it. This will give you more confidence in your work that is sure to shine through. If you work in a job market where you fear the whole company could be affected by layoffs, then be sure you’re prepared with an updated resume and a strong network of people who you could rely on for help if things ever went south. Need some help with schmoozing? How to Network Like a Pro.

Remember that the best way to overcome fear is to educate yourself so you’re not making up crazy stories in your head that get you stressed out for nothing. When you have an understanding of exactly what’s going on, you can make better decisions and start taking actions to set yourself up for financial success.

2 Comments

  1. <3 this! Great thoughts.

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