3 Common Financial Fears (and How to Confront Them)

How would you cope if something catastrophic happened to your home or car? Would you be able to financially manage the diagnosis of a severe illness? If a family member called needing financial support, would you be able to answer? 

Although most of us would rather pull the blankets over our heads than confront these financial fears, the truth is that the unexpected could happen. And if realized, these fears could take a significant toll on you and your family’s financial well-being. 

Emergency Savings is First Line of Defense

The root of any financial fear is not having enough money to manage and recover from the situation. For many people, that’s a valid concern. A recent CNN Money article showed that 50 percent of Americans would have a hard time putting together $2,000 should an unplanned emergency expense arise. 

Do the following to bolster your savings:

• Start by making cuts in your monthly budget by deciphering wants vs. needs. 
• Pay yourself first by setting up an automatic withdrawal from each paycheck into your savings. 
• Strive toward saving three to six months’ worth of living expenses. Use this calculator to determine how much you need, and if that number seems too overwhelming, having just $500 in savings has been shown to relieve anxiety. 

Charge Wisely

Emergencies don’t wait until you have adequate savings; they often come when you least expect them. If you must use a credit card to pay for expenses: 

• Use the card with the lowest interest rate, such as a home equity line, and the one with the lowest balance.
• Make a plan to pay off the debt as quickly as possible. 

Prepare for Specific Challenges 

Visit the articles below for tips on setting yourself up financially in case you:

• Fear #1: become injured or contract a serious illness
• Fear #2: have something happen to your home or car
• Fear #3: receive the call to financially support a family member