When I started looking through the personal finance blogosphere a year ago I was frightened of all the information I was gathering. There was so much out there and I didn’t necessarily understand what I was reading. I didn’t want to make a misstep with my hard earned cash, so I didn’t do anything at first.
Fear is prevalent for all of us when we are dealing with money. However, we can mitigate some of that fear by taking specific steps depending on the situation. Below I’ll outline a bunch of fearful financial situations and at least one step you can take to reduce your fear and help you get through each.
- Asking For a Raise – Before you ask for a raise, you should create a portfolio of things you have accomplished in your position. Additionally, you should look on websites such as Salary.com so you can be armed with more information before sitting down with your boss. If you come into a negotiating session well prepared, you will be ahead of the game and more likely to get the raise you seek.
- Starting Your Own Business – Jettisoning the 9-5 workforce to embark on your own is an ambitious and fearful undertaking. Before making the leap, you should consider trying to spend your free time working on your business as a “side-project” to see if it’s sustainable.
- Finding a Financial Advisor/Accountant – Finding a trusted advisor or accountant is a big challenge. Searching through the yellow pages is probably not the best bet, and it’s possible your parents’ financial advisor might be getting up there in years. Your best bet is to talk to your close friends and have them refer you to someone they trust. Then go through a process of selecting an advisor that is the best fit for you and your goals.
- Putting Money in a Bank – It’s surprising that some people fear banks. I remember co-workers pulling money out of their standard checking and savings accounts after banks started to fail as if they would never see it again. For those that are scared of putting money in banks, I remind you that your money is insured (FDIC) up to $250,000, so feel free to deposit that $1000 in the bank and let it earn some interest.
- In Too Much Debt – It’s understandable to be scared when bill collectors are knocking down your door. My suggestion is to take a seriously look into Dave Ramsey’s debt snowball and see if his method of paying off debt will work for you.
- Asset Allocation – Allocating your investments (after you have decided to make them) is a decision I was scared to make. Without being armed with a bevy of information, it all seems like guesswork. If you are like me and just want someone to do this for you, you should take a look at how Harvard and Yale invest. If you aren’t a fan of their portfolios, look into lazy portfolios.
- Not Knowing Your Inheritance – I know not everyone will have money to look forward to in their future, but I know several peers that expect to have money coming their way eventually. If you are one of these people that have been told by your family that “you will be taken care of,” I suggest having a conversation and finding out what “taken care of” really means. For the best case scenario, you should completely ignore that money is waiting for you, and set yourself up financially as if you had to be independent.
- Investing Your Money – With the market being as volatile as it has been, I understand that fear exists about putting money into stocks. In order to get over this fear is to look at over 80 years of history and know that the market will rebound and that this country will get back on track. Furthermore, you have to look at where you want to be financially in the future. If a slow rate of return from CDs and interest bearing accounts will get you to your goals, then do what works for you.
- Preparing for Children – Finding out you are going to be a parent can be the happiest and scariest day of your life. There are significant costs associated with having a baby. Luckily, you have 9 months to prepare. Preparing yourself with an emergency fund as soon as possible can be beneficial if you and your significant other were not planning on a child (or any life changing event).
- Big Purchases – Big purchases are always scary. Houses and cars represent the largest amounts of money we are likely to spend. Making a bad decision here can impact your finances for years. The best way to mitigate making a mistake is to take your time with the purchase. Do not act on impulse and do as much research as possible until you feel comfortable. Don’t let your emotions of wanting a new car or being a homeowner influence your decision to buy quickly.
What other financial situations have caused you great fear? What are the steps you took to overcome that fear and deal with the situation?
To view a recap of the event, check out the Spectrum Roundup at My Next Buck
How to Kick 11 Fearful Financial Situations in the Face from personal finance blog Bargaineering.com.
New Stocks Live provides the latest stock news.
