How to Conquer Your Financial Fears

Time to face it head-on.

Unless you’re rolling in cash, opening your bank or credit card statements can feel like an exercise in humiliation. Every line item is a reminder of what you owe or how little you have. For most people, dealing with their finances is like uncluttering their garage. It’s complicated, frustrating, and full of things you’ve forgotten about, but don’t want to deal with.

But if you want to live well, retire comfortably, and feel content with your finances, then you have to face them head-on. Hiding and hoping for the best won’t work out in your favor. Here are some basic strategies to face your money woes.

Hire Help

If you’re having trouble figuring out a budget or deciding how to best invest your 401(k), it’s OK to ask for help. There are countless financial advisors, planners, and coaches available to get you on track.

A financial advisor or planner can help you create a budget, explain your weak points, and create an investment plan. Look for a fee-only financial planner with a fiduciary responsibility, which means they have to do what’s best for you, not what will earn them a bigger fee since they charge a flat rate instead of working for commission. You can find a licensed advisor through the National Association of Personal Financial Advisors.

Before your appointment, make a list of the issues you’re facing and any questions you have. These can include how to get your student loans out of collections or how to tackle that $5,000 hospital bill.

If you can’t afford a professional, find an accountability partner, like a friend or family member. Pick someone who’s also dealing with some financial issues and who has a lifestyle similar to yours. You can create weekly or monthly check-ins and discuss your progress over email, in person, or even via text, Slack, or G-chat. Having an accountability partner will make it harder to avoid your finances since you’ll be reporting to someone.

Forgive Yourself Easily

When you’ve spent years or months hiding from your finances, facing them can feel like an impossible ordeal, especially if you set unrealistic expectations for yourself.

Emily Guy Birken, author of End Financial Stress Now, looks at financial management like cooking: Just because you forget to add a crucial ingredient or overcook the chicken doesn’t mean you’re doomed to be a bad cook the rest of your life.

“Any individual financial mistake might ruin your day (or week or longer), but it is not an overall indication that you are bad with money or that you are not learning how to improve,” she says. “The only way to truly entrench a problem with money… is to give up on learning because you are afraid.”

Utilize Technology

Trying to make a budget, but stuck on how to do so? Interested in starting an IRA for retirement, but not sure which funds to choose?

Thankfully, fintech apps can help you answer those questions in just a few clicks. Budgeting apps like Level Money analyze your bank account to determine how much you can spend per day. No more worrying about categorizing expenses.

Digit and Qapital are apps that automate saving based on your bank balance and your needs. They can make saving for various goals possible and easy to stick to.

Finally, robo-advisors are the perfect solution for beginning investors who don’t want to hire anyone to manage their portfolio. Robo-advisors ask a series of questions to determine users’ risk tolerance and retirement timeline before coming up with a semi-customized plan. Try WorthFM, Acorns, or Betterment.

Most robo-advisors have low minimum deposits and fees. But make sure to do your research to choose the right tool for your needs.

Ultimately, when it comes to personal finance, you’re almost always better off doing something — no matter how small — than doing nothing. Hiding in fear in the hopes that your financial situation will change itself is not a plan. Begin taking action, and small gains will help keep you motivated for the long term.

Join the Discussion

5 Responses to “How to Conquer Your Financial Fears”

  1. Rob Drury

    “If you can’t afford a professional, find an accountability partner…”

    Baloney! ANYONE can afford a professional, because there are so many highly qualified ones who charge little or nothing at all. It is a bold-face lie perpetrated by the fee-only lobby that an advisor is suspect if he works on commission. First of all, ALL advisors, including commission-based ones, must operate within ethical and suitability standards that are at least as effective as the DOL’s bogus “fiduciary standard.” Then, in order to make a living, the commission-based advisor has to accomplish something. The fee-only “fiduciary” need only bark out a recommendation and issue an invoice to get paid. Both must produce results benefiting their clients in order to keep them. If an advisor is capable of providing a full range of alternatives from many providers, the objectivity standard is met. He has no need to base his recommendations on compensation.

    Rob Drury
    Executive Director,
    Association of Christian Financial Advisors

    • LindaR

      Baloney back atcha…
      I have yet to come across a financial advisor that effectively deals with taxation issues, let alone budgeting. I’ve only come across Investment Advisors, and even those don’t seem to have my best interests at heart. Last December, we got paperwork that would have moved our now-expired DSC mutual funds over to the same funds in a Front-end-loaded format. All that accomplishes is to extend the commission stream the advisor receives, it does absolutely nothing for me (if not eventually negatively affecting my returns). We didn’t return the paperwork, and have started to look at more of a do-it-yourself format, via a low-fee-manged form of the Couch Potato portfolio. Despite great S& P 500 returns last year, our mutual funds did exactly 1.03% (a 60/40 stock/bond split). The advisor had the audacity to point out that our investments did 3%, but that included a fund that he and his company had nothing to do with. His company’s fund did 1.03%. Now that I’m looking at ETF funds, he has some suggestions, but even those suggestions have high fees. This is value for my money?!

    • Rob Drury

      Linda: “I have yet to come across a financial advisor that effectively deals with taxation issues, let alone budgeting.”

      Then you probably haven’t come across what I would call a financial advisor. I oversee more than 3,000 of them; most maintain a good awareness of tax issues and have adequate resources to overcome deficits in their own knowledge. Virtually all are spectacular at budgeting. I’m guessing that you’ve been dealing with investment advisors, who all too often narrowly focused and uninterested in handling true financial planning. Unfortunately, the term “financial advisor” can refer to any one of a number of practitioners.

  2. LindaR

    Rob, you’re exactly correct in that (as my second sentence says), the financial planners we’ve come across have been thinly disguised investment advisors. We’re actually doing OK, as I’m a numbers nut, and kind of like doing the budgetting, planning and researching for our family. I do the taxes, and the vast majority of the banking for our household, with my husband kept in the loop. I just get annoyed when even the “investment advisor” doesn’t keep my best interests at heart, hence the wish for something much closer to the fiduciary standard for financial planners or investment advisors. I know you may think that investors don’t need this standard, but your average smaller budget investor isn’t well looked after by the current mess of practitioners. To boot, we’re Canadian and pay some of the highest mutual fund fees in the world. The Canadian regulatory system is also inching towards the fiduciary system, as it is realized that the smaller investor is really not currently well served.

    How to conquer your financial fears? Educate yourself, read widely and check out everything you’re told by someone trying to sell you something.

    • Rob Drury

      This has been my biggest criticism of the CFP community. Those holding this designation are alleged to be the epitome of financial professionalism, yet I consider them (and I admit I’m unfairly generalizing) typically too investment-centric; ignoring what I consider to be the far more important details of insurance and cash flow.