Facing Financial Fears: Empowering Your Path to Goals
By: Jeff Bernier, CFP®, ChFC, CFS
Money worries make a lot of people nervous, especially when going through major life changes. But if you're working with a financial advisor and have a solid plan, many of those fears are just illusions - like a bowl of peeled grapes made to look like eyeballs.
According to a 2021 study by the Financial Industry Regulatory Authority (FINRA), financial anxiety is widespread, with 56% of Americans feeling anxious when thinking about their personal finances1.
Let's look at two common money fears up close:
Fear of Investing
When you invest, you're taking some risks with your money. That's why some people see the stock market as a casino where you're just gambling. Because they're afraid of losing money, they prefer to play it "safe" by keeping most of their cash in the bank or low-risk bonds and CDs. They might take this cautious approach in other areas too - like not joining a gym because they're afraid they'll quit, or not starting a business because the odds seem too tough.
But here's the thing: you can't grow your money or achieve big goals without taking some calculated risks. The back-and-forth trading that causes swings in the market is also what creates opportunities for disciplined, long-term investors to build wealth over time. A good financial plan accounts for and manages those risks.
You can use a similar approach for personal goals too. Instead of making resolutions you'll probably break, set specific, realistic targets with timelines. That can help you face your fears and start making progress.
Fear of Spending
Being frugal and avoiding debt are usually wise money habits. But for some people, the fear of spending gets out of control. They work extreme hours chasing an imaginary "magic number" for retirement. Some delay retiring when they could, missing out on enjoying life while relatively young and healthy. Even in retirement, they're terrified to spend the money they saved, constantly putting off bucket list dreams.
The key is following a plan that lets you spend guilt-free on the things that truly make you happy - without going overboard. Your money is there to enhance your life, not just accumulate in the bank.
Get Professional Advice
Don't let unfounded money fears hold you back from reaching your goals and enjoying life. Work with a financial advisor to create a personalized plan that addresses your concerns and helps put your mind at ease. Schedule a review meeting to go over your plan and start feeling more confident about your money for the year ahead.
1 https://www.finrafoundation.org/sites/finrafoundation/files/NFCS-Report-Fifth-Edition-July-2022.pdf
