“It’s like getting up the nerve to go into the haunted house,” says Justin Sinnott, a financial consultant for Charles Schwab in Seattle. “Once you’ve gone through it and come out the other side, it’s like, ‘Hey, now that I’ve been through that, I guess it wasn’t so bad.’ “
Here are six tips to help you exorcise some common financial fears:
1. Climbing a mountain of bills. Fear can be paralyzing, causing some people to put off looking at their bank statements or bills for weeks or months.
Soon the overdue bills, late fees and perhaps unnoticed, erroneous charges follow.
What to do? Open the mail or check your financial accounts online and make a list of how much money you have and how much you owe.
A great way to squelch anxiety over debt is to begin paying it down. Try the credit card payoff calculator on Schwabmoneywise.com: http://apne.ws/19QPsI2.
2. Surviving a financial shock. At the heart of many financial frights are unforeseen crises, such as losing your job or receiving a mammoth medical bill. How best to deal with that? Save up. That means putting away three- to six-months’ worth of living expenses as an emergency fund.
Even if you have credit card debt, it pays to funnel some of your paycheck every month toward building an emergency fund.
3. Sticking to a budget. At the heart of financial stability is keeping up with how much you spend, save and owe. That’s also integral to carrying out a long-term financial plan, such as saving for college, retirement or to buy a home. How to get there? Make and stick to a budget.
Many apps can make monitoring your finances easier, among them Mint.com and Check.me.
4. Outliving your savings. Concerned you may not have enough money for a comfortable retirement?
Start by using an online retirement income calculator to estimate how much you’ll need.
AARP offers one at: http://apne.ws/198bSoR.
5. Planning your estate. If there’s anything that people tend to fear wading into it’s thinking about the financial implications of their death.
“It involves stuff, again, that they just don’t want to think about,” Blayney says.
Once you draw up a will, make sure to review it annually. Consider hiring a financial planner to assist. The Certified Financial Board of Standards offers some questions to ask when you’re ready to hire a planner: www.Letsmakeaplan.org/working-with-a-financial-planner/what-to-ask.
6. Coping with financial stress. A good way to potentially eliminate a fear of finances is to break any of your financial tasks into periodic, small moves, say making a point of reviewing your accounts every Sunday night, for example.
“Make it a routine,” Blayney says. “And then it becomes kind of a task, rather than a monster.”