What do we need money for?
The most common answer to this will be about money as being the primary source of comfort in our lives. At the same time, money is also the primary reason behind most of our fears and worries. If we emulate our financial fears to our mortal fears such as death or loneliness, even that shouldn’t come as a surprise to us.
Never let these concerns make you weak. Rather than letting these fears hamper our emotional and mental state; we should instead be wise enough to be aware of the likelihood of our financial situation transforming.
Let us here learn about the biggest financial fears of people and how can we overcome their effects in our life with a little planning and your financial acumen. This tally is a result of a public survey conducted recently.
1. Living a monthly salary mentality:
This trend can be observed more often among young adults, or people who are at the outset of their career. This kind of mindset can result into minimal savings. This can also land you in a cyclic trap of waiting for the salary day, to clear your chunk of bill payments. However, this attitude can be very well overcome in case you have enough savings.
How do you build ample savings?
There could be several ways you can accomplish this goals of yours. You can begin with putting a fixed amount out of your monthly income into a savings account. Once you are able to successfully accomplish this for a few months, you can try increasing the amount gradually.
Always ensure that you are doing it systematically, and if not increase; you are at least not cutting it short. Step by step as your savings start boosting, you can thereafter go on isolating some money for your emergency fund.
2. Losing employment:
If you are into a job, then it is apparent that your organization’s performance will have a direct impact upon your job, and even whether you will be able to maintain it. Here, an emergency fund can be a valued resource that can help you survive your unemployment fear.
The Thumb Rule: A wise act here would be to save up to 6-8 months of your salary for a satisfying emergency fund.This emergency stock can ensure to keep you sheltered, in an unfortunate time including the loss of job.
3. Excessive Debt and Homelessness:
Arising out of the fear of joblessness, causes this fear to penetrate our minds. No job means pending bills, rapidly accumulating debts, and sometimes may even land you into losing your home.
How to ensure that this fear doesn’t become true? You should be consistently growing your savings and investments, along with maintaining liquidity. You can consider downsizing to a smaller and an economical housing option. This will ensure that you have a shelter, along with managing other life expenses.
4. Severe Indebtedness:
If you have piled up cumbersome debt on your credit cards, student loans, car loans, etc. it may seem really difficult to clear up all. It is truly likely to occur. Debts can result into strapping your cash reserves and consequently, make everything else mount up. This situation becomes more difficult for people with a meager debt-to-income ratio. For those, it can be struggling to qualify for the loans and other financial products they need, or even get a loan with a decent interest rate.
How to defeat this? Again here, developing a good savings will alleviate your debt fear. Such a person will be able to cover upon his/her unexpected expenses, and also be in a position to place more money up in advance while applying for loans.
5. Stolen Identity:
Pertaining to the increase in security breaches, identity concerns are much quite predictable. Any mishandling of our banking and security info, may lead to draining of our hard-earned savings and credit history.
How do we protect our identity? There are certain precautionary measures that can be taken to keep our identity info secure. Let’s have a look at a few.
Always use secure passwords for all of your online transactions that include the input of any kind of banking information. Be cautious of suspicious calls or emails, especially when they are asking for any of your personal security information. Most importantly, being proactive will always help you defeat this fear.
6. Fear of Working Immortally:
With people now starting to work at quite an early age, this has become a much avertible fear. Pondering how?
Because they have the strongest means, Time, on their side. Therefore, they are able to opt for the pension and retirement plans within their company as early as possible. With this, they can ensure having a sufficient amount at the time of their retirement.
Dealing with this fear: How do we empower ourselves to save enough for our retirement? The answer to this may not be very difficult to accomplish. Always put your future wants on a high priority compared to your present needs. If you start saving early and be consistent with your savings habit, then gradually its worth will increase with time and the growth rate.
Consequently, your wealth will accumulate enough for your future sustenance.
Fear of loss in the Stock Market:
Never ever risk all your life savings in the Stock Trading. Rather, disperse your money between multiple assets. Be aware of your abilities and comfort zone, in order to invest accordingly. Always attempt for a healthy long term portfolio to become wealthy.
Fix: It may be true that with higher risks comes higher returns. However, you should only opt for an investment option, which you are comfortable with. Try gambling only if you are ok with the possible option of losing and also ready to bear its repercussion.
With these 7 points, we have learnt about our biggest financial fears and possible ways to beat them. Rather than being unaware, facing the fear to find possible and viable ways to overcome the same will near you to conquer. It is evident that a coherent insight of the situation, will surely take you closer towards finding a strong financial solution.
(The author is Ramalingam.K an MBA (Finance) and certified financial planner. He is the Director & Chief Financial Planner of holistic investment planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He Can be reached at firstname.lastname@example.org)