These 4 Fears Are Costing You Money
- A fear of money can take many forms and while we might not have a diagnosed case of chrometophobia, most of us, at some time or another, have had some money fears.
- With 8 out of 10 Americans in some form of debt or another, fear of never getting out of debt is too real. One way to reduce your anxiety is to consolidate all your debt.
- Losing money in the stock market is actually among the biggest financial fears for many.A good way to help counter this fear of investing is to develop a proper investment strategy.
What if I told you that we all suffer from some form of chrometophobia? The fear of money. While your knee jerk reaction might be to object, financial fears are actually very real and might be a bit hard to identify.
More than just worrying about having enough money in the bank, financial fears can also mean the fear of getting laid off, advancing your career, or affording your dream home. A fear of money can take many forms and while we might not have a diagnosed case of chrometophobia, most of us, at some time or another, have had some money fears.
So, how can you wrangle runaway financial anxiety?
First, identify the source of your fears, which could be one of the four common ones below. Then it’s all about taking actionable steps to put you back in the driver’s seat. Here are some to get you started.
1. Fear of Being Laid Off
Fact, the job market is not looking rosy at the moment. With the future so uncertain and many people losing jobs or being financially strained, it is understandable that we’re all are worried about our jobs. This is especially true if maybe you recently started a new job, was in the process of a career change or maybe had hoped that you’d finally quit your job this summer. Now, suddenly nothing is certain. Let’s be real, the fear of losing employment is a real stressor and could be preventing you from asking for a promotion or raise (opportunities to earn more).
How to conquer it: The most obvious thing you can do is to grow your emergency fund, which will see you through a period of unemployment.
Your greatest asset is your ability to earn an income. Use this time to invest in yourself by learning new skills or continuing your education. Just like how you’d diversify your portfolio, you need to diversify your education and skill base to make yourself recession-proof.
Try to stay socially connected to prospective employers and others who might be able to offer viable leads should you need them. Waiting until you lose your job to build your network isn’t a winning plan.
2. Fear of Never Getting Out of Debt
Life is expensive! I recently started looking at property listings for my potential first place and boy was I surprised. Not only have my expectations been knocked down a few notches, I’m no longer opposed to moving to Idaho if it’s the only place I can afford. Don’t let me get started on car costs, student loans, etc. With 8 out of 10 Americans in some form of debt or another, fear of never getting out of debt is too real.
How to conquer it: One way to reduce your anxiety is to consolidate all your debt. It’s psychologically more painful to have a series of small debts, as opposed to one large one. Consolidating all your debt can even help you score a lower interest rate. Write down all your debt and force yourself to come up with a repayment strategy. Feeling in control of your cash flow and debt payments can help ease your anxiety and redirect you on a path toward paying off your debt faster.
3. Fear of Reviewing Your Bills/Bank Statements
If you’re like me, you probably dread opening bank statements. Trust me, there was a time that I socially distanced from any statements. But, as I learned the hard way, failing to review bank statements or a credit report can be devastating to your bottom line. There are consequences to not looking over bank statements. It can lead to paying exorbitant overdraft fees, or missing critical errors in your credit report, which does happen. Besides, avoiding your finances doesn’t make them go away.
How to conquer it: Tell yourself that not knowing is worse. Then, get to know and understand your financial documents. If you need help to interpret everything, ask a trusted friend or financial advisor. Whatever you find, it is only through knowing what the situation is that you can deal with it and work toward getting on stronger financial footing.
4. Fear of Losing Money In the Stock Market
Contrary to popular belief, you don’t need a lot of money or to work in finance to leverage the stock market to grow your wealth. For most people, there’s a fear that stands in the way, investment anxiety. In fact, losing money in the stock market is actually among the biggest financial fears for many. It also doesn’t help that this year has probably been the craziest and most volatile year yet if you’re an investor. In response to this, maybe you’ve started investing too conservatively to meet your financial goals. This is a mistake!
How to conquer it: A good way to help counter this fear of investing is to develop a proper investment strategy. Think about what is appropriate for your age, risk tolerance, tax bracket, and financial goals. Remember that while the stock market can go up and down, historically, over time, it has gone up significantly. The past isn’t necessarily a prediction of the future, but it should help you sleep a little better. If you’re investing for medium or long-term goals—say, five to 20 years out—the stock market can provide an opportunity to grow your money in the meantime. The trick to dealing with market anxiety is avoiding knee-jerk reactions and staying within your comfort level.