Fear of Finances? It’s Not So Scary!
By Joe Globensky, RFC®
If you find yourself with a fear of finances, you’re not alone. This fear may hold you back from reaching your financial goals in life. If you are reading this, you have taken the first step to overcome those fears, or at least confront them head-on. Our financial advisors want to make you comfortable and help you gain the knowledge needed to help you achieve your financial goals. Let’s look at some of those fears associated with finance.
Finance Fear – The Dreaded Budget
You’ve probably heard from a young age to create a budget within which you can live. However, different stages of our lives bring up different fears regarding budgets. When we are starting out in life we worry about how a budget can be a drain on our lifestyle. I mean, in our early 20’s, who wanted to end the weekend on Friday night because we used our entertainment budget so quickly? Later in life many of us need to learn how to budget with another person. If one couldn’t do it, how are the two of us going to?
Overcoming The Budget Fear
While having a budget in your early twenties can be a bit of a drag, it is important to get those habits established so that you can have a successful financial future. When setting your budget in your twenties, be sure to pay yourself first and pad your entertainment budget if that is a priority to you. But keep in mind, if you are increasing one part of your budget you’ll have to sacrifice another part. It’s all about give and take.
You’ll need this budgeting experience if you get married and combine incomes and expenses. You may have two different financial styles which may clash. Sitting down with your partner and discussing how the two are going to mesh is essential. Work on a budget in which both of you contribute ideas and revisit the budget early as a couple to ensure the original plan is working, and adjust if needed.
Finance Fear – Overwhelming Debt
Sometimes we get into a situation where our debt seems so overwhelming we cannot see our way out from under it. Student loans, mortgages, car payments, and credit cards can add up to a pretty huge mountain. If you do nothing, this mountain will always be there and may continue to grow.
Fear Is Keeping You In Debt
Face your fear, knowing that if you don’t do anything about it you will never get out of debt. A financial plan is essential, and the sooner you start, the faster you’ll get results. If your goal is to be debt free, do not incur more debt and work on your plan to reduce. In a year, you’ll be one year closer to your debt free goal.
Finance Fear – Unexpected Expenses
A big financial fear for many is the large unexpected expenses. These can be anything from replacing a vehicle, large medical expenses, or an appliance breaking down. Wondering what you will do if any of these things happen can be paralyzing. But, it doesn’t need to be.
Prepare For Unexpected Expenses
Remove this fear by preparing for it. Set aside money in an emergency fund to help with unexpected expenses. This emergency fund should be a minimum of three months of your salary. Having this in place can significantly decrease your fear of unexpected expenses.
Finance Fear – Job Loss
This is probably the number one financial fear many have. If you lose your job, there will be no money coming in. How are you going to pay your bills? Take care of your family? These things can cause anxiety just thinking about them. So, what do you do to ease this fear?
Stay Marketable, Have A Back Up
One thing you should strive for is to maintain your marketability. Don’t let your skills get lax. If your job offers training, make sure you take advantage of it. Tuition reimbursement? Finish that degree or advance the one you have! Keep your skills up to date so that if a layoff comes, you’ll be ready for another company. And that emergency fund we talked about before? That comes into play here as well. Having three months of your salary saved will allow you time to find another job without worrying about how you’re going to pay your bills this month.
Finance is not a scary word. You may be hesitant about some aspects of finance, but we’ve shared several ideas you can put in place to help change that. Your future financial goals depend on your ability to face your fears or reach out to someone who can help you. A financial advisor will take time to understand your concerns, needs and objectives and help you get on a path to overcome those fears.
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