Everyone has their fears, especially when it comes to money. Even though you might not like it, money makes the world go around. Without it, it's pretty difficult to survive. So it's not surprising that money worries can cause so much anxiety, particularly in relation to not having enough of it. Many people's financial fears are similar to the next person's. People are scared of things like facing an unexpected crisis or losing their job. While a lot of these things might seem out of your control, you can prepare for them or find ways to ease your fears. Have a look at some of the most common financial fears and how you can address them in practical ways.
Having something unexpected happen that will cost money you don't have has to be one of the biggest fears people have. All sorts of things can happen unexpectedly, from a hole in your roof to getting in an accident. The computer you rely on could break down, or a fire could start in your home. If you can't pay to correct these disasters or support yourself while they pass, it can be pretty devastating. Although saving can be difficult, it really is the best way to prepare for these things. An emergency fund will help you out when you have an unexpected expense to cover, no matter what it is. You can start by saving just a small amount, however much that might be.
Losing Your Job/Income
A lack of income is the greatest financial fear many people have. Unlike people in many other countries, most employees in the US don't really have any job security. The majority of states have at-will employment, meaning that your employer can fire you for pretty much anything, as long as it's not related to a protected class, such as gender or ethnicity. You never know when you could lose your job and even if you can see it coming, you often don't have a lot of time to prepare. However, it is possible to prepare at least a little in case you one day have no employment. Having savings is one useful thing, but you might also consider insurance policies that can help to protect your income. Additionally, knowing your rights when it comes to claiming unemployment benefit is helpful too.
Drowning in Medical Costs
Medical costs in the US are higher than in any other similarly industrialized, developed country. And despite that, life expectancy in the US falls short of any other country in the top ten most expensive. While the Affordable Care Act helped to change things and made medical insurance available to more people, it certainly isn't perfect and resulted in higher insurance costs for many. Having to cover unexpected medical costs is not something anyone wants to face. Making sure you have adequate coverage is essential if you want to avoid being stung. It's a good idea to check if you're eligible for Medicaid or Medicare, as well as find out information about Medicare plans that are offered by private companies. Even with medical insurance, there are often still costs you need to cover. An emergency fund can help you take care of the costs your insurance won't pay for.
Being Unprepared for Retirement
While life expectancy creeps ever higher in some countries, it is stalling somewhat in the US. But even though people aren't living longer, they're still retiring later. In 2027, people won't be able to claim their social security benefits until they reach the age of 67. According to Bloomberg, almost one in five people in their early 70s is still working. Being unable to retire is a huge fear for many, but there are plenty of people who have accepted it as an inevitability. If you want to stop worrying about retirement, you need to work out how you can best prepare for it. Creating a solid savings and investment plan is one of the best things you can do. To do this, you might need to reassess your current lifestyle and budgeting or even think about how to raise your income.
Not Being Prepared for a Family
Some people are able to plan out their families perfectly so that they have children exactly when it's right for them. However, the reality for many is that life simply isn't that neat and tidy. Your family can grow unexpectedly, and you quickly need to work out how things are going to change. If you're scared that you'll be unprepared for growing your family, whether it's planned or not, it could be time to take a look at how having children could change your finances. It's difficult to ever be truly prepared to grow your family, but savings will help you with the initial expenses. If you can live below your means, you can save more, and you'll be more prepared when things get a little more expensive.
Struggling with Debt
Having debt is a bit of a curious conundrum. You don't want to be drowning in debt, but you also need to show that you can handle it to do a number of things. If you never take on any debt of any kind, you'll struggle to build your credit score. You won't be able to do things like buy a home with a mortgage or go to college. So debt is necessary for many things, but you also need to be sensible about it. If you want to avoid getting in trouble with debt, you need to ensure you only take on debt that you can pay off.
However, you can't predict the future, so you never know when you might end up finding it difficult to make your payments. As with many things, building your savings helps with this. It can also be useful to take out insurance for some larger debts, such as your mortgage or student loans. It can also be a good idea to have life insurance to take care of debts that might come out of your estate or be passed to someone else when you die.
Becoming homeless is more than just an issue of lacking money. It's also a lack of security and safety, and it makes it even more difficult to get back on your feet. Being homeless doesn't necessarily mean you're sleeping on the streets or in shelters. It can mean having a lack of a permanent and stable home, perhaps staying with friends and family or in hotels and other accommodation. If you have some savings, it can help you to avoid becoming homeless. There are also some other smart moves you can make. If you rent your home, make sure you know your rights as a tenant. If you own your home, you might be able to access help to keep paying your mortgage payments. Selling your home could be an option too so that you can downsize or begin renting instead.
Identity theft has been a big topic for years now. While it's always been a problem, the internet suddenly made it a lot easier for people to steal financial information and other sensitive data. If someone steals your identity, they can take your money and trash your credit history too. It's important to know what to do if your identity is stolen, but prevention is often the best thing you can do. You should be careful with your personal information and financial details. For example, don't carry your social security card in your wallet. Make sure you use different passwords for different things online and use security software to protect your computer. It's also useful to be aware of common online scams so you can avoid them more easily.
Losing Savings Through Investments
Investing your money helps you to grow your funds so that you can have more savings for retirement and other needs. However, there is always an element of risk when you invest your money, and it's easy to be scared that you're going to lose it all. Fortunately, there are ways to prevent this happening. Firstly, you need to make sure you have a diverse investment portfolio. Don't invest all your money in one place, even if you choose a variety of stock market investments. It's important to weigh up the risks of any investment you make so that you can be confident you're making a good decision.
You don't need to take high risks if you don't want to. While a high-risk investment could give you a chance of a higher reward, it's also difficult to guarantee that you'll benefit in the end. Spread your money across different investments and stay at a risk level where you're comfortable. It's also important to make sure you know what you're doing, so don't forget to do plenty of research. You might also get advice from a professional if you're not sure where to put your money.
Money has a huge influence on your life, so it makes sense that many of your worries relate to it. But you can deal with a lot of the stresses that your finances create.