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You probably didn’t stress out about money as a kid.
If you got an allowance, earned money, or received cash as a gift, it usually meant you could buy something you wanted.
Even if your parents made you save part of it or set aside money to donate to others, spending money was exciting and made you feel grown-up.
As an adult, your enthusiasm for money and spending may have faded.
You may be anxious and concerned about your finances if you are paying for all the stuff – housing, transportation, insurance, student loans, food, utilities, clothing, and more.
Common financial fears include:
- Never getting out of debt
- Not understanding financial concepts
- Losing your job
- Discussing money with a romantic partner
- Inability to work
- Losing all your money
- Not saving enough for children’s education
- Having to declare bankruptcy
- Identity theft
- Running out of money in retirement
- Having to support your parents
While there are plenty of reports painting a scary picture of people not preparing for their financial futures, women often have more financial fears than men.
Likely because we tend to live longer and may face gender gaps related to income and investing.
Women also get “sandwiched in” more frequently. When women should be focusing on saving for retirement, they may have financial and caregiving responsibilities for both their children and aging parents.
Since financial fears and stress can hurt your health and wellbeing, you should accept that your concerns are valid. And take action to face your money worries.
While it takes work to develop and follow a plan to tackle money woes, overcoming them may not be as hard as you think.
17 Common Financial Fears and Ways to Overcome Them
Reading an article and realizing other people worry about money and have similar financial concerns too, can be comforting.
Here’s how to slay 16 common money fears that might be causing you financial anxiety.
Financial Fear #1 – Never getting out of debt
When you look at your take-home pay and compare it to all the bills you have to pay each month, it can be depressing.
If you are only able to pay the minimum on your credit card payments or if you make late payments on your car loan or mortgage, it’s tough to make forward progress because of penalties, fees, and interest.
The more unsecured debt you have to pay off, the harder it is to add money to your emergency fund, sinking funds, or retirement accounts.
Facing Your Fear:
While it can be overwhelming to list out all of your debts (including monthly payments and interest rates), it’s challenging to make a plan without a clear picture of what you owe.
Begin with making a list of all of your income sources and monthly take-home pay, and all your debts.
If you’re living paycheck to paycheck, you want to close the gap between your income and expenses.
Start by tracking your spending for at least a month. Then, create a budget prioritizing saving – even if you can only save a few dollars to start.
When you look at how you spend every dollar, there’s a good chance you’ll see places where you can easily cut back on your spending. But the big three expenses – housing, transportation, and food – are places where making cuts to your expenses can really pay off.
To grow the gap and increase how much you can save, find ways to increase your income.
Writing a financial mission statement can also help you stay focused on the future rather than regretting decisions from the past that may have put you into debt.
Financial Fear #2 – Never understanding money
Are you convinced you’ll never really understand most financial topics and the math related to them? Then, you probably think you’ll always have debt, payments, and financial stress.
Facing Your Fear:
It’s essential to build confidence around your finances and improve your financial literacy. If you don’t know where to start, read an article or two on personal finance topics that interest you or listen to a podcast about money.
There are plenty of great resources available in user-friendly terms that explain essential financial concepts and include examples for you to follow.
We’ve reviewed several great personal finance books here on Women Who Money too. There’s a good chance you’ll find some at your local library!
If you’d prefer to work with someone in person, you can choose to work with a variety of financial professionals.
You can even hire a money coach. Just make sure you get references, review the background of the person you choose to work with, and ask about how they make money.
Financial Fear #3 – Losing my job
Unless you run your own business, there is always a chance you could lose your job. People are fired and laid off from jobs every day. And many people are not financially prepared to be out of work.
Even though unemployment levels are low, you might struggle to find another job with a similar salary or benefits package unless you have a skill set or experience in high demand.
Facing Your Fear:
It’s a mistake to simply count on finding another job quickly unless you have a substantial amount of money saved.
When it comes to your career, attend professional development opportunities and conferences to grow your knowledge and skills. Take advantage of networking opportunities when possible. Review your resume and make sure it is up to date.
Also, this is a good time to reflect. Would other people say you’re a difficult colleague to work with? Make attitude adjustments if necessary.
Consider how to build multiple streams of income while you are still working. If you’ve thought about starting a business or buying a rental property, the income you’ll earn can reduce the stress you’ll feel if you lose your job.
Financial Fear #4 – Discussing money with romantic partner
While you may intuitively understand that open conversations with others about financial topics are beneficial, taking the initiative can be difficult.
And when it comes to money discussions with your partner, it can be even harder.
But if you’re in a relationship you see continuing, then it’s time for the financial discussion.
If you envision picking out rings soon, are already engaged, are wanting to become roommates, or buy a house together, you absolutely want to start the money conversation now to avoid potentially significant financial problems.
Facing Your Fear:
Initiating a conversation about your finances with your partner might be difficult at first, but it will be a whole lot easier now than later.
Start by scheduling a “money date” with your partner and create a list of topics to discuss. Cover what you can in the first discussion and then plan future money dates to cover additional questions or update answers to previous ones.
Here are some questions to help you start:
- How do you feel about money?
- Do you consider yourself a spender or a saver?
- Do you have any debt? How much?
- What is your credit score?
- Do you pay your credit card balance in full every month?
- Have you ever experienced bankruptcy?
- Do you have a savings account or emergency fund? What will you do in a financial emergency if you don’t?
- Do you follow a budget or track your expenses?
- What are your short and long-term financial goals?
- Do you want to rent or own a home?
- What’s the best financial advice you’ve ever heard?
- How do you measure your financial success?
- Are you currently saving money for retirement? Are you happy with how much you are saving?
- What’s one thing you wish your parents would have taught you about money?
- If money wasn’t a concern, what would you be doing, or what would you want to buy?
Keep the momentum going to ensure you’re continuously following up and communicating with each other. Normalize the topic of money by having regular financial check-ins.
Continuing learning about personal finance and grow your financial prowess together.
Maintaining an open money dialogue with your partner keeps you on the same page, and prevents major financial surprises. It can motivate you to improve your finances and work toward specific financial goals together.
Financial Fear #5 – Getting sick or hurt and unable to work
If you think this fear is irrational, consider research cited on the Social Security Administration website that states 1 in 4 people who are 20 years old now will be disabled before they reach age 67.
Whether you have sick days at your job or not, it can be financially devastating if you (or a family member) has a severe illness or injury. You might be able to cover your expenses for a short time, but the longer you’re out of work, the more difficult things will get.
In addition to medical expenses that may not be covered, when money gets tight, you might not have enough money to make payments on big loans like your car or mortgage. If you can’t pay in full and on time, you’ll face penalties, fees, and possibly repossession or foreclosure.
Facing Your Fear:
This is another example where having a substantial emergency fund is critical to your financial health.
It’s hard to put money into an account you hope you’ll never use. But your future self will thank you if you or a loved one gets sick or injured, causing you to be out of work.
Sick leave may cover your salary for some time, and some employers offer some level of disability insurance as part of their employee benefits package. But don’t assume you have coverage. If the illness or injury happens at work, you may be entitled to worker’s compensation benefits.
While it may be expensive, consider purchasing private disability insurance to minimize your risk and protect at least a portion of your income.
Depending on the severity of your illness or injury, you may also qualify for Social Security disability benefits. This is only true if you’ve worked in jobs covered by Social Security.
Financial Fear #6 – Something terrible happening to me (or my partner)
It’s challenging to think about the worst thing that could happen to you or someone you love. But when it comes to your finances, preparing for the worst is a smart move.
While we all hope to live long and healthy lives, you probably know someone who passed quite young.
If loved ones depend on you or if you depend on another breadwinner in your family, it’s time to figure out where you’d stand financially if there is an early death.
Facing Your Fear:
It can be an emotionally draining process, but you’ll sleep better at night, knowing you’ve met this fear.
Organize your important paperwork and let a loved one know where they can find critical documents and information. An “In Case of Emergency” binder is a gift to those you love if you are no longer with them.
Think about your need for life insurance, get quotes, and make sure you’re covered. If you qualify, you may even be able to get low-cost life insurance without a physical exam.
Seek advice from a legal professional and make sure you have a will and other relevant estate planning documents created to protect your loved ones and your final wishes.
Financial Fear #7 – Getting divorced and not have enough money
It’s no surprise that divorce is expensive. And there’s a good chance you know someone who’s financial health suffered from getting divorced.
When you get divorced, you’ll have to take a serious look at your income, expenses, and budget. You may need to look at different housing options when your marriage breaks up too.
If you are going to be living on one income instead of two, you may have to change your lifestyle so you can pay your bills and not run out of money.
Facing Your Fear:
When you’re planning a wedding, the last thing on your mind is getting divorced. While you hope that your marriage lasts forever, you have to be realistic too.
Statistics show that the divorce rate has decreased over the last decade – but thousands of people still get divorced each year.
And one of the biggest reasons people split up is money and communication problems.
If you’re in a relationship, it’s essential to have open communication about your finances. Talk about your income, expenses, values, and goals and determine if your spending aligns with what is most important to you.
While it may not sound very romantic, if you or your partner have assets to protect or large amounts of debt, you may want to consider a pre-nuptial agreement.
A post-nuptial agreement is also an option for those who feel a need to clarify their financial positions after they marry.
Neither of the nuptial agreements is guaranteed to hold up in court. But creating them forces a couple to look at their assets and debts and have conversations about their finances. Those agreements that are voluntary, fair, have full disclosures, and are valid are most likely to be upheld in court.
Financial Fear #8 – Not saving enough for my child’s education
You’ll undoubtedly believe the old saying that “kids grow up fast” when your babies are entering high school. And if you’ve put off saving for college, you’re probably regretting not starting an education fund when they were little.
If you’re like many parents, you put off saving for college because other expenses and financial goals were more important at the time. As the years went by, you may have put some money away – but not as much as you wanted.
Facing Your Fear:
You can’t turn back the clock, so it’s time to look at what options you have to help your children pay for college. Depending on your financial situation, it may be more critical for you to save for retirement than to help fund your child’s education.
If you are on track with your retirement savings, there are plenty of things you can do. But starting early is the first suggestion. The sooner you start putting money away for college, the more time there is for the magic of compounding to take place.
You can open a 529 account that allows your savings to grow tax-free and withdrawals of tax-free earnings for qualified educational expenses. You may even get an income tax deduction (depending on where you live) on some of the amount you contribute.
Coverdell Education Savings Accounts (ESA) and Uniform Transfer to Minors Accounts (UTMA) are other options that might make sense for your family.
Make sure you think hard before using your savings, taking out a home equity line of credit, applying for a personal loan, or co-signing loans to help your child with college costs. As much as you love your child and want them to be able to earn a degree, it shouldn’t hurt your financial health.
Your child can also consider saving money by going to a local college or taking college credits in high school to finish a degree program early. Part-time jobs also help students pay for college expenses.
Living at home and attending a community college is also an option for some students.
Financial Fear #9 – Having to declare bankruptcy
If you’ve reached a point where you can’t pay your bills and collectors are searching for you, it may be time to seek legal advice about bankruptcy. Bankruptcy isn’t something to be taken lightly because of the impact on your credit.
It’s also important to note that bankruptcy might not make sense if most of your debt is federal student loans, alimony or child support, or certain taxes because it may not be discharged.
Sometimes when you run out of options, bankruptcy is an appropriate solution to help you move forward financially.
Facing Your Fear:
You might look at bankruptcy as a personal failure. But it is also a time where you can grow and make changes.
Depending on what factors caused you to go into debt, you may need to work to increase your income and decrease your spending.
Tracking your expenses, using a budget, and saving an emergency fund will be suggested by credit counselors.
You’ll also need to start repairing a bad credit score as soon as possible. Otherwise, you will end up paying higher interest rates, and you may not receive approval for things requiring a credit review, such as renting some apartments.
Financial Fear #10 – Having to support my aging parents financially
Whether you’re just starting to grow your net worth or you’ve done an excellent job of building your financial house, you know that your parent’s finances are not in good shape, and it’s making you nervous.
They may claim they are doing fine. But you see plenty of signs that money will be an issue as they get older.
If you’re focused on investing for your retirement or saving for your children’s college education, should you pull back a bit and start thinking about ways to help your aging parents financially?
Facing Your Fear:
Your parents’ physical, mental, emotional, and financial health will have a major impact on how much you need to get involved at this point.
The first step in facing your fear is talking to your parents about their finances. If you aren’t sure where to start, Cameron Huddleston’s new book, Mom and Dad, We Need To Talk, might be what you need.
This might be a challenging conversation, whether your parents have struggled with money or not. To meet them, “where they are” regarding talking about their financial health can require empathy and patience.
If they are open to your involvement (and need you to be involved), you can start by helping them manage their money. If spending is an issue and they haven’t tracked expenses or used a budget, you can help get them started.
Going through their credit card statements can help you determine if they have on-going payments or subscriptions that need to be addressed.
You should also talk to your parents about all of their different insurance policies. Do they have too much coverage or not enough? Have they shopped for lower prices on their policies recently?
Don’t forget to show them how much they could earn by using a high-interest savings account rather than keeping their money in the local bank.
At some point, you’ll have to talk to your parents about housing as they age too.
Does it make sense for them to downsize, move to an assisted living or senior community, or age in place?
Each decision will have an impact on their financial situation. And it may impact yours too.
While it will take you time and energy to get involved in your parent’s finances, you may find hundreds of dollars (or more) of savings each month by helping them make some changes.
Every dollar you can help them save is a dollar that you can keep in your bank account.
You’ll also be happy to learn that if your parents are struggling, there are numerous resources for seniors providing financial assistance.
Financial Worry #11 – Afraid of trying to advance in my career
Even though you have the experience, education, and evaluations to back up your attempt to advance in your career, you find yourself questioning your qualifications.
You have a severe case of impostor syndrome, and you’re struggling to believe you deserve what you’ve earned.
Despite recognizing that your physical and emotional health are impacted by impostor syndrome, you haven’t considered how it’s hurting your financial health.
If you aren’t asking for raises you deserve, looking for promotions, or seeking an advanced degree that could boost your career trajectory, your finances are probably suffering.
Facing Your Fear:
To manage impostor syndrome and take control of your career path, talk to someone you trust about how you’re feeling. Finding other impostors and working together to address your resistance should help too.
If you’re a perfectionist, try activities that help shift your mindset and focus on making incremental positive changes. Seek situations where you feel successful and have confidence and build off of them.
Recognize the effort you put forth and what you’ve accomplished without any “buts” about what you still want to do. When you start believing in yourself, others will believe in you too.
Financial Worry #12 – Afraid to ask for a raise
You’re staring at another glowing annual review, and you know you aren’t receiving what you’re worth. When you look at other comparable positions, starting salaries are close to or above what you’re making now.
Maybe you are afraid of conflict or rejection. You like your job, and you don’t want to “rock the boat” by asking for more money. But you also know you’re worth more than you are making!
Facing Your Fear:
If your employer doesn’t have regular salary reviews or hasn’t offered you a raise in a long time, it’s time for you to take action and negotiate your next increase.
If you would consider working for a different employer or making a career change, review your accomplishments, update your resume, and start applying for other jobs. You should also consider reading, Know Your Worth, Get Your Worth by Olivia Jaras.
There are negotiation scripts online you can follow, and you can build your skills, such as using silence to your advantage during negotiations. While many women find asking for more in negotiations, a difficult habit to cultivate, remember the more you ask for, the more you’re likely to get.
Financial Worry #13 – Fear of identity theft
With all the news of data breaches and ads highlighting the need to protect your identity, it’s not surprising you have concerns. The first time you find suspicious activity on a credit card, you’ll wonder if your identity has been stolen too.
If someone assumes your identity, they may take over your bank account, try to open new credit cards, car loans, and lines of credit in your name. This can not only negatively impact your credit score and report, but the time and energy required to address the fraud can also feel like another job.
Facing Your Fear:
Criminals attempt new ways to “phish” for our data every day, so you must be proactive and try to keep your information secure.
First, you should keep your paperwork safe. Keep sensitive documents in a secure location and shred items with personal information.
When you are asked to fill out any information, ask what is required, and share only that information.
Be careful what you share on social media because criminals can learn a lot about you (or friends or family members) from what you post.
Even though it may not be 100% effective, freeze your credit to stop identity theft. Criminals shouldn’t be able to open new credit cards or loans if your credit file can’t be accessed.
Beware of companies charging monthly rates to monitor your credit and make claims that they will take care of everything if your identity is stolen. Ensure you understand what they offer, read reviews, and figure out if the service is worth the cost.
Financial Worry #14 – Never owning my home
Since the day you moved into your first apartment, you’ve dreamed of owning your own home. You want to be able to paint the walls any color you wish to, plant a garden, and not worry that a landlord won’t renew your lease.
But you also know it takes a lot of money to be a homeowner. You’ll have to save a down payment, put away money for major repairs, buy equipment to maintain your home, and more. On top of that, you’ll have to pay your mortgage, insurance, and taxes each month.
If you can buy a home, will you be able to “own it” and pay off the mortgage before retirement, as so many suggest?
Facing Your Fear:
When you’ve reached a place financially where you can save some cash, consider starting a down payment fund for a home. But make sure you’re also saving for retirement to take advantage of compounding interest too.
Whether you decide to buy a starter or forever home will determine how long it takes for you to save up a down payment.
Remember, if you don’t put 20% down – you’ll probably have to pay for private mortgage insurance. This can add hundreds of dollars to your payments each month.
It might take a few years longer than you anticipated to put yourself in the financial position to own a home and be able to pay for all of the related expenses. But having an emergency fund, saving for retirement, and creating sinking funds for other costs will hopefully keep your dream home from turning your finances into a money pit.
Financial Fear #15 – Losing all my money
You’ve worked hard to save for emergencies and the future. And now all you can think about is losing all of your money.
You know that criminals are trying to access bank and investing accounts. And you’ve read about and listened to news reports about people being scammed and losing their life savings.
You’re worried about a stock market crash like no other in history. You also keep a lot of savings in your local bank and miss out on the higher interest paid by online savings accounts because you’re afraid they aren’t safe.
Facing Your Fear:
Some fear about losing all of your money is probably a good thing because you’re likely to take essential steps to keep it safe.
Make sure you carefully manage your account numbers and passwords. Don’t leave a list of usernames and passwords in your purse or wallet or by your computer at home. You may want to consider using an app like LastPass to keep track of your usernames and passwords.
Don’t fall for phishing emails that ask you to click on links or phone calls from scammers trying to get you to reveal personal information like passwords and PINs. Two-step verification may be a hassle at times, but the security benefits outweigh the inconvenience.
When in doubt, call or go to your financial institution to ask if there is a problem rather than relying on emails and calls that may not be legitimate. And don’t forget to freeze your credit.
Some extra homework on online banks, their histories, protections, and how they work might help you make a move and open an account. Once your first interest payment posts, you’ll wonder why you didn’t do it sooner!
If you understand the history of the stock market and the fact that your money is always at some level of risk, do what you can to maximize profits while meeting your risk tolerance.
Making sure your portfolio is diversified can help you be more comfortable and successful with investing.
Financial Worry #16 – Spending the money I’ve saved
You’ve worked incredibly hard to save and invest for financial security. So when the time comes to spend money from any of your savings accounts, you freeze – even when you put money into an account for a particular purchase.
If you do let up on the “purse strings” and buy something or spend money, you second guess yourself and might be stressed out about what you’ve done.
If this sounds like you, you may lack confidence in your financial plans or have a scarcity mentality. You don’t believe in your financial decisions, and you’re worried that you don’t have enough.
Facing Your Fear:
You can pour over your spreadsheets or check your account balances every day and still doubt yourself.
Instead of wasting your time and energy doing that, it might make sense to have a trusted friend or financial professional review your plans.
You may learn your fear of spending is justified because you made errors or didn’t account for some significant expenses. More likely, you’ll find out that all of your efforts have positioned you to spend without worry – no matter how hard you’re finding that to be.
To do this,
- reduce your exposure to media
- organize all aspects of your life
- always be open to learning
- share openly with others
- give up on winning
- stop comparing to others
- reflect with a grateful attitude
- focus on what works
Financial Fear #17 – Running out of money in retirement
Even if you’ve been a diligent saver and concentrated on your future during your working years, you might still be afraid of running out of money in retirement.
And if you haven’t saved much for your golden years, you’re probably very concerned about it.
You want to be independent and take care of yourself for as long as you can. And you’d also like to enjoy yourself and spend a little extra on things like spoiling your grandchildren and donating to your favorite causes.
The last thing you want to do is be a financial burden to your loved ones.
Facing Your Fear:
The first step in facing your fear of running out of money in retirement is taking a serious look at your financial situation today.
If you don’t have much saved for the future or aren’t sure if you’ve saved enough to have a comfortable retirement, consider seeking assistance from a financial professional or counselor.
Depending on your age, you may have several options to increase the amount of money you’ll have available in retirement.
If you can keep working, you benefit from having a salary. You can also try to invest as much money as possible.
If you don’t know how much you spend each month, carefully track your expenses, and set up a budget. It’s hard to know how much money you’ll need in retirement if you have no idea how much you spend right now.
If you are approaching the age where you can apply for Social Security, consider delaying it to increase your payments. While it’s a personal decision, your payments will be higher if you wait until your full retirement age or until age 70 when you can receive your maximum benefit.
If you are eligible for any type of assistance due to having a lower income or for any other local, state, or federal support – make sure you take advantage of it. Some seniors are too proud to ask for help or don’t want to bother anyone about their needs.
Just keep in mind that these programs exist because of the taxes you paid for years. If you qualify, you should take advantage of them. They exist to help you or to help prevent you from being dependent on your kids or other family members.
Finally, talk to your kids about your finances. You can decide how much to share and when to share it. But understand that at some point – you’ll likely need help managing your money.
Overcoming Your Money Fears
We all have money stories from our youth that influence how we think about money as adults.
While some people’s money stories are positive and future-focused, others grew up in households where finances were never discussed. Plenty of people lived in homes where talking about money was always stressful.
As tough as it might be to do, facing our financial fears and making a realistic plan to deal with them is often the best solution.
If you’re honest with yourself and realize that most people have some financial fears, you’re more likely to take action to overcome them.
Once you’ve found some success, your confidence will grow – along with your bank account, net worth, and financial health.
Learn to talk to your friends and family about money. Your relationship with money will improve. And you may just help those you care about most improve their financial wellness too.
Vicki and Amy are authors of Estate Planning 101, From Avoiding Probate and Assessing Assets to Establishing Directives and Understanding Taxes, Your Essential Primer to Estate Planning, from Adams Media.