Do you catch the ‘creeps’ on Friday the 13th? Even if superstition isn’t your thing, it’s tough to avoid the sense of fear that lingers. This Friday is the first occurrence of the dreaded day this year and I’m sure I’ll be looking over my shoulder a little more than usual.
While many of us are looking out for black cats, ladders and things that go bump in the night, there is an even bigger fear present in a lot of American homes – not just today, but almost every day. Has Financial Fear gotten its grip on you yet?
There’s a reason that there are more than 179 million Google hits for ’financial fear’ and only 61 million for ‘financial happiness.’ Worries about money occupy our thoughts, impact our relationships and influence how well we sleep at night. Facing any fear requires a battle plan, so let’s look at some top money concerns and how you can combat that creepy feeling and find a financial safe haven.
Fear: Not enough savings
Fact: You can’t predict the future. But you can prepare for it. It’s tough to get a grip on how much savings you need if you haven’t thought through a plan. Experts recommend having at least 6 months of your salary in savings for emergencies. Instead of focusing on the end lump sum goal, break it down into smaller pieces. What if you put together a plan to save a set amount each month for the next three years? Divide your savings goal by 36 and I guarantee you’ll have a much more palatable monthly savings goal. If it still feels scary, give yourself a little more time. It doesn’t matter how long it takes you to get to your goal. Every step is a step closer to fighting that fear.
Fear: Job loss
Fact: Sometimes you can see the writing on the wall. And sometimes it can come as a huge shock. Whatever the circumstances, facing unemployment brings many questions, including how to remain financially intact between jobs. Even though you may never have to face these circumstances, you owe it to yourself to think in advance about what you would do if it happened. A plan now will help you avoid the panic later. Having the savings buffer we discussed adds a layer of security and is a great start. Go a step further and think about what you could forgo with less income. For me, I’d start by cutting my cell phone and cable TV costs. Put together a budget, including all your anticipated bills, to see exactly what your finances would look like when faced with unemployment. You’ll easily see where you can make cuts to make the numbers work. But best of all, you’ll have a written plan to get you through.
Fear: Facing your credit score
Fact: Whether you’re watching the latest horror flick or checking your credit report, it might seem best to just not look. I’m with you on the movie, but when it comes to your credit, knowledge is the power to overcome your fear. So it’s low (or lower than you’d like)? While it might take time and effort, those are two things you’ve probably got! MyFICO.com has great advice on the steps you can take to improve your score. Your credit outlook has never looked less scary!
Fear: Being a burden on others
Fact: The unknown future is tricky business. At a minimum, we’d all like to know that we’ll be safe and cared for, no matter where we find ourselves in life. Talking with family/adult children about money can be a challenging and humbling endeavor, but an honest and open dialogue in advance of need allows everyone the opportunity to weigh in with a level head. Revealing expectations is the primary goal. Knowing that someone will be there for you will most likely result in a sense of security and ease. You can also play the numbers game by understanding how to maximize the impact of your retirement savings to ensure long-term accessibility. Establishing a plan with your financial advisor and understanding tax implications with your accountant/tax advisor can also help assuage your fears.
Fear: Losing your home
Fact: Owning a home is a big part of the American Dream. But losing a home can be a nightmare. No one wants to think about losing their home, but none of us are immune to unforeseen circumstances either. Luckily, there is help. The U.S. Department of Housing and Urban Development offers advice on ways to avoid foreclosure. Your mortgage lender may also have tips and programs in place to help avoid this situation. Your best measure of defense – make sure you do your homework before a home purchase. A thorough understanding of what you can afford, your loan terms and your options is the best set up for success.
Now that we’ve faced our fears together and have a game plan to ease our mind, I hope to sleep a little sounder on this Friday the 13th. In fact, I’d like to put my financial fears behind me and focus on financial happiness instead. December brings us one more Friday the 13th this year. Stay tuned for my findings on the less-scary side of finances, just in time for the season of good cheer!