Financial fears and how to tackle them.

When you think about your personal finances, do you find them to be a source of anxiety or a cause for concern? Financial fears are common, and can manifest in various ways that can have a significant impact on your well-being, such as anxiety, headaches, digestive issues, high blood pressure, depression, feelings of being overwhelmed, etc. Financial fears can often cause feelings of worry, fear or stress and can take its toll on your daily life. The key to overcoming your financial fears is finding ways to tackle them to reduce your financial worries.

1. Fear of debt – Many people fear accumulating debt, whether it’s credit card debt, student loan debt, mortgages, etc. As interest rates increase, people are finding it harder to maintain the minimum payments while balancing their other expenses. 

To tackle your fear of debt, create a budget to manage your expenses to help avoid accumulating more debt. Develop a realistic debt repayment plan that is best for your situation, such as the snowball method, or the debt avalanche method. This will not only help you tackle your fear of debt, but the debt itself. 

2. Fear of financial emergencies – When unexpected expenses arise, it’s stressful figuring out where the money to cover the expense may come from if there is no emergency fund. Without an emergency fund, credit typically becomes the main financial source to cover the expenses, thus adding to any debt you may already carry.   

To tackle your fear of financial emergencies, you need to be prepared for an emergency. Build an emergency fund to protect you and your household from any unexpected emergencies and define what constitutes as a financial emergency to prevent spending the funds when it’s not necessary. 

3. Fear of job loss – Losing one’s job without having another job to immediately go to can have a severe impact on finances. Some may qualify for Employment Insurance, but that will still only be a portion of what was made before losing the job. Other’s may not qualify for Employment Insurance and have no income coming in. 

To tackle your fear of job loss, have an emergency fund that could protect you and your household while allowing you time to find another source of income. The amount that should be saved would depend on each individual situation, such as whether you are the only source of income in the household, or whether you share those responsibilities.

4. Fear of not saving enough for retirement – Because of today’s basic living expenses, saving for retirement is one goal that may have been put on the backburner to be able to get by. While there are a few government-funded programs, such as Canada Pension Plan, and Old Age Security, it most likely will not enough to sustain one’s way of living.   

To tackle your fear of not saving enough for retirement, understand that it is never too late to start contributing to retirement plans. Many workplaces offer Group RRSPs and match after so many years of employment that should be taken advantage of. Meeting with a financial advisor can also help you determine how much you would need to have saved to retire comfortably and how come up with a plan to best accomplish that. 

5. Fear of identify theft and fraud – With the advancements of technology comes the increase of online scams which can lead to identity theft and fraud. Being a victim of online scams can compromise financial security by having passwords, credit card info, personal information all fall into the wrong hands, as well as spending savings to appease scammers (purchasing gift cards to have scammers “unlock” your Facebook account, e-mail account, etc.).       

To tackle your fear of identity theft and fraud, being well informed is key. Do not share personal information within messages to friends or family, only send money if you can verify who you are speaking with (if a family member messages online, ask them to call instead), remember, if the price of something seems too good to be true it is, use protected payment methods when possible (PayPal, Google Pay, etc.)., and many other ways to stay safe.

 
These are just a few of the most common fears people have when they think of their personal finances. By arming yourself with accurate financial knowledge, a financial plan, and commitment, it is possible to gain control over your finances. To ensure you are on the right path to facing your fears, don’t hesitate to reach out to a trusted finance professional. 

If debt holding you back from tackling your fears, and you are unsure how to move past it, there are options. 

If you are looking for advice, or a second opinion about your debt, it does not cost anything to talk about your options. Every financial situation is unique and viable options can differ from person to person. A conversation free of judgment and cost, is the first step to determine options for debt that make sense for you. For a free consultation, please call or text (506) 645-1814 or email jaime@tackledebt.ca; or visit www.tackledebt.ca.