“The only thing that we have to fear is fear itself,” said FDR is his first inaugural address. He went on to explain that fear paralyzes you and makes you unable to move forward. Does that sound like something that’s happened with your finances? Check out a list of unreasonable financial fears and learn how you can get over them.
The Fear of Cutting Expenses
Once you’re comfortable in your lifestyle, scaling back can be painful. You may fear that you’ll be bored if you cut your cable or enjoy food less if you start cooking more and eating out less. You may worry that you’ll miss out on new music if you cancel your streaming subscription. If you’ve reviewed your finances and decided that you need to cut back all your unnecessary spending is fair game for being cut. Make the sacrifice and get rid of the extras so you can accomplish your financial goals. You can always add the expenses back again if you later realize it’s killing you to adjust.
The Fear of a Financial Emergency
You should have some level of concern about the possibility that an expensive emergency could pop up and this concern should inspire you to create an emergency fund. Having funds set aside to cover you in case of a major unexpected expenses will give you peace of mind.
The Fear of Using Credit Cards
You may have heard horror stories from people who’ve ruined their credit and gotten head over heels into debt just from using credit cards. These stories may completely turn you off to credit cards, but it shouldn’t. Simply having credit cards doesn’t hurt your credit score. What does hurt your credit score is how you use the credit cards. If you’re irresponsible – running up balances and not making your payment son time – your credit score will suffer. Using your credit card wisely will actually help, not hurt, your credit score.
The Fear of Checking Your Credit
Your credit report is a list of all the things your creditors have been saying about you. If you’ve paid some accounts late, you may be afraid to check your credit report because of what you might find. There may be bad information on your credit report, but knowing is better than not knowing. It’s better than being blindsided by having an application turned down because of something on your credit. Plus, checking your credit puts you in a position to take are of negative accounts and reverse some of the damage.
The Fear of Investing
Investing gives you the ability to earn a profit without having to work for the money, at least not as hard as you’d have to work to earn the money through labor. Investing seems intimidating because there’s a perceived risk of losing money, of being taken advantage of, or making the wrong decisions. The fear of investing often stems from a lack of knowledge and the best way to combat this is to learn more about investing.
Making financial choices out of fear, as with any other emotion, isn’t wise. You can achieve so much more if you let go of your fears and start making informed financial decisions.