Financial fear is a real stumbling block, and for us, changing our financial defaults has had a lot to do with conquering fear. That fear is one of the reasons that many of us drag our feet when it comes to asking the hard questions about our money.
Why is money such an intimidating subject? Most of us can identify with some of these common financial fears:
- We fear our debts are staggeringly large and too big to ever pay off.
- We fear we won’t be able to pay our bills this month.
- We fear we won’t have enough good working years left to save for retirement.
- We fear we won’t be able to afford to send our kids to college.
- We fear asking questions will make us appear foolish.
- We fear unknown factors that are difficult to plan (illness, job loss, natural disaster, stock market crashes).
Here’s a problem with fear: It doesn’t make anything better. You can sit and think about how afraid you are of this and that, and it won’t do you one bit of good.
Fear doesn’t make anything better.
Is it worth giving in to our financial fear? Should we throw in the towel before we begin? Of course not!
For those of us whose default is to run from everything that scares us, it’s time to change. This is what we are all about: Changing Our Default. Attitudes and behaviors that are dragging us down and holding us back have got to go.
Let me offer up some encouragement to you today. If your financial situation is grim (and for many of us, this is the reality), it doesn’t mean it’s completely hopeless. It may mean you have to take another hard look at the facts and then figure out how to make things better. Don’t rest behind excuses. I can’t do this or that, I have this unfair circumstance, other people don’t have to deal with what I’m dealing with. Excuses won’t fix the problem.
Fear of Debt (Finding Out How Much We Really Owe)
Changing our default means saying, yep, I owe X amount in student loans, and that’s a major bummer, but I signed a contract. I’ll uphold my responsibility and pay that debt off as fast as I can. Maybe take on extra evening and weekend jobs. I could tutor online. I’ll drive for Uber. Whatever it takes, I’ll do it to get out from under the oppressive weight of that debt. I won’t let fear keep me in debt one day longer than I need to be.
Fear That We’re Already Too Late
Changing our default means recognizing that even if we’re older than we wanted to be when we started retirement savings, we can still start from where we are. If we’re afraid we can’t ever save enough, we can’t just accept that as the truth and not change anything. I myself was guilty of that attitude not so long ago. The retirement fund for teachers looked so pitiful and untrustworthy, but I just thought I had to accept it. Bumping up my savings rate on my own would have put me in a much better position for today.
Thank goodness we found the FI community and awakened to the concept that we could choose how much to save, and we could take our retirement plans into our own hands. Now, TRS (Teachers’ Retirement System) is merely one small part of our retirement plan. It’ll be great if the money is there when we reach retirement age, but we’re certainly not banking on it. (We’re in IL, the absolute WORST state for retirement funds! Crooks have been managing the state’s money for far too long, so we’ll save and invest as much as possible on our own, thank you very much.)
Fear of Appearing Foolish
Making decisions without asking any questions is one of the worst mistakes we can make. Changing our default means that even if we think we’ll look stupid, we’ll ask questions anyway. We won’t blindly accept what some financial “expert” tells us, but instead research for ourselves the best course of action. We’ll ask various sources for the financial information we need.
If I had been more confident in myself and willing to ask questions as a new college graduate, I wouldn’t have purchased the whole-life insurance policy somebody convinced me to buy. I would have taken the initiative to ask someone besides the salesman (duh) and found out what a terrible product this is. Just remember, it’s much dumber to make choices in ignorance than to risk possible slight embarrassment through questioning. The potential loss of cash is a much worse risk than a little embarrassment over lack of knowledge.
Fear of the Unknown
Fear of the unknown is actually very realistic. After all, we can pretty much guarantee we’ll face some form of major financial hardship eventually. Whether because of a serious illness, a loss of employment, a natural disaster like a flood or hurricane, or whatever else might come your way, something is going to suck up your money.
The key to dealing with that kind of fear is to channel it in a positive way. Knowing that you will most likely need “extra” funds available someday that are hard to estimate should motivate us to pile up cash for the future. A rainy-day fund. This is where living more frugally and planning for early retirement can serve you well. The less you require to live comfortably now, the more you can sock away for later. And if you invest your money wisely, even those additional retirement years you have to plan for don’t hurt you that much. The unforeseen circumstances won’t be as devastating as long as you plan and save for them as best you can.
Too many of us have wasted far too many opportunities due to fear. We have to do more!
Our best advice for defeating financial fear: face the facts and do something about them. Even if the truth of your financial situation is hard to swallow, it won’t get any better by ignoring it.
Happy birthday to Mr. COD!
What are your financial fears? How do you move beyond fearfulness into purposeful living?