Dollars and Sense – The Fear Factor

We are not born with fears or attitudes about money, yet we all seem to develop them. No doubt, your upbringing is a major contributing factor. Past experiences—successes and failures—create an umbrella. Then society comes into play—always ready to jump in with its two bits worth via the media, your family, even the government.
Let’s face it. As a dental hygienist, you make good money. You can often set your own hours, work with one or several offices, and your skills are highly portable. You will decide if you consume money, grow it, or give it away.

No one should start on the road to financial planning without looking in the mirror and asking: What are my money fears? The top 10 fears I identify in my book 10 Smart Money Moves for Women are as follows.

1. Fear of Being Poor

Is poverty really a concern for today’s woman? You bet. According to the US Department of Labor, for every 100 women and men who reach 65, only two are financially independent. How do the other 98 get by? They must rely on relatives, the government, or working until they die.

Women live longer than men, which means we are more likely to spend far more years just barely getting by. The reality is that whether you are rich, poor, or in-between, you have to rely on yourself to keep out of the poorhouse. Forget about the white knight rescuing you.

2. Fear of Losing Money

At some point, everyone loses money. Working with and investing money does not have to start in giant steps. In fact, beginning with small steps is a much smarter strategy. Whether it is putting money in a mutual fund (many will allow you to start with as little as $100 if you commit to putting in a minimal amount on a monthly basis), a money fund, or a fund for the kids (or yourself), small amounts can build into fortunes. Starting small allows you to learn along the way; a little here, a little there. If some of the “little” does not work out—the investment fails or never grows in value (also a failure), you and your net worth will not be destroyed.

3. Fear of Looking Stupid

No one wants to appear or feel foolish. Yet, when it comes to money decisions, many women fear that the wrong move will announce to the world that they blew it and really don’t know what they are doing.

Once the money crisis has passed, there is good news. It is called a learning opportunity. The more confident you become in your decisions and the more you accept that you will stumble once in awhile, the better prepared you are to assess your financial situation fairly quickly and begin to brainstorm remedies and cures.

4. Fear of Talking About Money

Most women wish they had training and guidance about money and investing as children or young adults. Most women grew up in homes that avoided discussions about money. By talking about it, you will find that many others are in the same boat. Most of your friends probably came from families where money chats were not on the daily menu.

5. Fear of Making Mistakes

Everyone makes mistakes. Few enjoy talking about their failures, yet there are lots of smart people who fail big time. What you need to guard against is the reaction that the fear of failure generates—paralysis. Making money mistakes and experiencing failures will not destroy you. Your keys to resurrecting yourself is determining: What happened?; What factors could you control, influence, or alter?; What factors were beyond your control?; and What did you learn? Understand both the pros and cons of the situation.

6. Fear of Creating and Sticking to a Plan

How many incredibly lucky people do you know who have won money? I bet very few, if any.

Creating a plan means making a commitment—to yourself—and that is where the fear factor enters. If it is in writing, it means you are supposed to do it versus just talking about doing it.

Financial plans are guide tools that start you on a path that will lead you to your stated money goals, if followed. They are not set in granite, they should be flexible. Times and circumstances change as do investments and investment opportunities. Any plan created should be reviewed and revised when needed and at least once a year.

7. Fear of Borrowing Money

Ideally, you should pay cash for everything. Ideally and what is practical are not always on the same track. Sometimes, it makes sense to borrow money. Unless you have a big savings account, borrowing money to buy a home is a necessity. However, over-borrowing and too much credit are common problems.

You most likely receive new credit offerings on a weekly basis. Should you sign on?—it depends. Ask:

• Do you need the credit? (It makes sense to have at least one credit card.)
• If you carry a balance, is the interest rate lower than the ones you presently have?
• If you do not carry a balance, what is the incentive for you to switch?

In determining whether you should borrow or not, ask yourself if you need the item versus wanting it. Most people get in trouble when they let their wants dictate how money is used.

8. Fear of Investing

One of the most frightening aspects about investing is that there are no guarantees. Many people have seen their retirement accounts diminish. Invested money can only do three things: increase in value, maintain its original value, or decline in value.

So, do you throw in the towel and give up? Absolutely not. Investing takes time and patience. Avoid focusing on what your investment is worth this week or this month. Concentrate on the long haul—what are the prospects for 5, 10 years from now?

9. Fear of Not Trusting Yourself

For many, maintaining loyalty to money advisors takes precedence over their loyalty to their own money. It is also more common for women to defer action and recommendations of what to do with their money to others. The world of investments, insurance, and credit use is not incredibly complicated. Advisors can help and so can you. Trust yourself.

10. Fear of Being Too Successful

Being fearful of too much success blocks some women. This is a gender problem—men do not get stuck here. Many believe that “the man is supposed to make the money decisions.” The fear of jeopardizing a relationship by being financially successful is not unusual for many women. Stop this nonsense. If you are good at working with money—good at identifying investment possibilities and strategies, go to the head of the class. You want to be successful.

It is time to confront your deepest financial fears and get them out in the open. Start identifying your fears. Write them down. Just the mere fact that you put them on paper opens the door for you to commit and confront your fears head-on.

By increasing your awareness of your fears and identifying which ones influence your money decisions, you will achieve the first level of smart money management.