Don’t Be Spooked! Tips For Tackling Your Scariest Financial Fears

October 6, 2015

Debt, retrirement, mortgages, babies- how to save up and face your biggest financial fears

Fall is an awesome time of year, isn’t it?  Cooler temperatures, falling leaves, cozy fall fashion and of course, everyone loves Halloween!  It’s a time to play dress up- whether you want to be glam or scary, it’s a fun time to explore beyond the norm.

While most of us think about our finances around the new year or tax season, fall is a great time of year to assess your financial situation before the busy holiday season hits.  Chances are, if you’re like most of us- you’re still procrastinating on those financial goals you had back in January because simply put- it can be scary to tackle something new with your money!

This week, we’ve partnered with Allstate to tackle some of the biggest fears that folks have about their money and how to fix them. You can take action today to ensure you’re on the right path and you’re on track. Here’s five of the biggest financial fears we all face in our 20’s and 30’s, and how to face them:

Scary Fear #1- Drowning In Endless Debt That Never Ends

Being in debt for the rest of your life is scary indeed- and if you don’t know how to tackle your debts, you can be stuck longer than you’d like, and it truly can feel like a second level of hell!

Tackle this fear by simply sitting down this month and assessing what you owe, who you owe it to, the interest rate and calculate how much you need to pay off your debt by whatever goal you’ve set to be debt free.  What if you don’t know how much you owe and to whom?  Terrifying right?  Simply pull your credit report, which is free every year at AnnualCreditReport.com.

Yes, it can be scary to face the fact it will take you 5 more years to pay of your student loans, but if you let your imagination run wild, you’ll never make progress and the fear can overrun your life.

Start today by figuring out where you’re at, and putting figures and timeframes to all of your debts.

Scary Fear #2- Being Totally Broke When You Get Old

If you’re not financially thriving now, it can be terrifying to think of what it will be like when you’re in your 70’s and no longer have steady income.  Even greater still is the fear that we are totally out of control with our retirement savings because we simply cannot save enough now to retire later.  How much will you need to survive?  Not knowing can make this feel even scarier!

Start today and first, calculate how much you will need to save to retire with using a retirement calculator. To begin saving towards retirement, check to see if your employer has a 401(k) matching program and be sure you contribute the max towards that match, and also consider a Roth IRA.  If you feel clueless on retirement, Allstate is full of retirement resources to help you get ready and face those fears!

Scary Fear #3- The Market Will Crash And You’ll Be Penniless

Whether or not you’ve invested in the stock market, a crash can wreak havoc on your entire life- including your job security.  Speaking as someone who has been laid off, my emergency fund has saved me.  When you are empowered to save up for financial disaster, whether it’s in the stock market or your car breaks down, you will be less scared.  When we’re scared and powerless, we make poor choices.  Start today by saving 10-20% of every single paycheck towards an emergency fund.  If you need to do a 30 day No Spend Challenge, having freedom from your fear of being jobless and broke will be worth the short term sacrifice.

Here’s another fun fact- the market always rebounds. You will find another job.  The worst may indeed happen, but with even a few precautions, you’ll be able to ride out the rough days and not be living out of a shopping cart.

Scary Fear #4 – Something Will Happen & You Won’t Be Ready

If something were to happen right now- a car accident, a burst pipe in your apartment, would you be ready?  Sometimes, even the most realistic fears can be blown out of proportion because we aren’t sure we have the cash in hand, or the right insurance to cover them.  Simply not knowing can be far scarier than the worst possible outcome.

When was the last time you really looked into what your auto insurance actually covers, and the money you’ll need on hand to cover your deductible? If you have a $500 deductible, do you at least have that set aside where you could cover your bases even for a minor repair?  An easy starting point is to go over last year’s transactions and add up all of your categorized expenses for home, auto and health related costs you encountered regularly to try and factor that into your emergency fund as well- including any anticipated costs (like if you can predict your tires are due for replacement) and maintenance as well (such as gasoline, oil changes and tune ups).

Scary Fear #5- You Won’t Be Able To Afford A Wedding/House/Baby

The future feels so far away (not as far as retirement!) but also, way too close when it comes to paying for it. A 20% down payment on a home seems like an impossible dream.  In terms of having a family, the Bump estimates the cost of having a baby (including medical costs, clothing, nursery and loss of work) can cost a family up to $30,000. Frightening!   For those of us who are still trying to tie the knot, I was told by several vendors that my $20,000 budget (back when I was planning a wedding) was “small,” and just about died- it took me two jobs and years to save up for it.

How can we afford it all?  It’s truly terrifying to think that “adulting” will be so astronomically expensive.  Start today by starting small.  Yes, no matter how you slice it, I cannot tell you that saving up $10,000 or more will be easy- but you can take the fear out of the process by starting small and starting now.  Even if you can only afford $10 a week, set up an automatic withdrawal from your regular bank account to a savings account.  As of this writing, I know I’m going to want to buy a house in the next few years, so I started putting $20 a week into my CaptialOne360 Savings Account.  The Allstate blog also has some tips on how to save on baby-related costs.

When I get my tax returns or a bonus, I put that towards the house to make progress faster, but no matter what- I never feel like I’m going backwards!  Slow progress is better than no progress, and even if a house, kids or a wedding isn’t on the horizon for you now, if it will be someday, start saving today!  

This post was written as part of the Allstate Influencer Program and sponsored by Allstate. All opinions are mine. As the nation’s largest publicly held personal lines insurer, Allstate is dedicated not only to protecting what matters most–but to guiding people to live the Good Life, every day.

8 comments so far.

8 responses to “Don’t Be Spooked! Tips For Tackling Your Scariest Financial Fears”

  1. Great job identifying the big fears. As your post says, the most important thing is to keep on keepin’ on. Even if it seems hard or scary or next to impossible, keep saving, planning, and setting goals.

  2. Fear #2 is definitely something that I’ve noticed my parent’s generation starting to deal with lately – and it can be very stressful and scary. I do think our generation will have a slightly different mindset though. We’re the generation of “make our own way” workers – I wouldn’t be surprised if I keep working (though hopefully less) at some type of side adventure when I’m older 🙂

  3. Scary Fear #2 is a big one for me. I’m approximately 15 years away from official retirement age and my retirement savings took a huge hit when I divorced and spent the next 13 as a single parent. So, I have a LOT of catching up to do.

    • Shannyn says:

      Divorce is so difficult to deal with financially, and emotionally! But it sounds like you’re determined to catch up, and that motivation will get you far!

  4. The last one has been on my mind lately. What if I can’t give our child(ren) everything that they need because of an unexpected event? How will that impact their lives and their perception of family? It’s scary to think that the effects of today can lead to either success or disaster but that there is a lot that also can’t be done and to leave worry by the wayside.

    • Shannyn says:

      It can be daunting, but that’s why it’s so important to start preparing today – as much as possible. I think it’s good to be worried before something happens because it shows you’re aware. There are so many people who don’t even think twice about the financial repercussions not having savings will have!

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