13 Common Money Fears and How to Overcome Them

If you’re a fan of scary movies, Halloween, or roller coasters, you know that sometimes being just a little scared can be exhilarating. Feeling your blood rushing in your veins, your heartbeat pounding in your ears- it’s exciting! But only in the right circumstances.

Money is a huge part of our lives, and it’s only natural that we’re going to worry about it from time to time. However, these common money fears are considerably less fun than watching a spooky movie with your friends, or sitting embarking on a haunted hayride. When they stick around for longer than they should, these money fears will start to have a profound impact on your life!

How to Overcome Your Money Fears

We all have a few money fears, but if you’re constantly worried about mishandling money, it could be seriously holding you back. These anxieties can get in the way of us taking action, and instead have us turning to unhealthy coping habits like watching hours of television, drinking, or plain old just avoidance.

However, we believe that with some mindset shifting, planning, and a few small actionable steps, you can overcome most of your greatest financial fears. So, here are a few common money fears that people face and how to work towards overcoming them.

Money Fear 1: Not being able to make ends meet

One of the biggest causes of financial stress is not being able to make ends meet each month. Spending more than you’re bringing in on the regular is a surefire way to experience more anxiety on the money front. Luckily, there are a few things that you can do to create more margin in your life and alleviate some of that worry.

If you’re in the red every month, the truth is that you’re going to have to make some drastic changes to get back into the green as quickly as possible. Taking a multi-faceted approach to this problem will likely help you to kick this money worry to the curb ASAP.

Tips to Overcome:

One side of the problem could be your income. While increasing your income can take time and dedication, it is totally doable if you put your mind to it.

Is it possible to make more money at your current job now by asking for a raise, or by acquiring new skills or certifications?

Or, if a raise just isn’t on the table at your current job, consider switching jobs for what will likely be even higher returns. According to stats, people who switch jobs will see an average pay bump of almost 12%! If you’ve been with your employer for a few years, chances are you could be making more money if you decided to work elsewhere.

If one of your more abundant resources is time, why not consider embarking on a side hustle that can earn you some extra money each month to help make ends meet?

While making more money can be a great way to overcome this money fear, it might not solve all of your money issues, especially if you struggle to keep your spending in check.

Sometimes, your income really isn’t the issue. You might be shocked to find out that a lot of high earners are still struggling to meet their needs. In fact, around 49% of people making over $100,000 a year still report living paycheck to paycheck.

If you fall into that camp, or just feel like you’re spending more than you should be, it’s time to look through your card statements and cut some expenses. Work on slashing every bill that you can, and cancel any subscriptions that you don’t get enough value from.

The best part about saving money and cutting your expenses, is that you get to feel relief instantly. That’s why this can be one of the most effective ways to feel better about your current financial situation.

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Money Fear 2: Never Getting Out of Debt

We get it- if you have a large amount of debt that doesn’t seem to get any smaller even when you’re making payments, it’s easy to feel like you’re drowning in it.

Unfortunately, there just isn’t a quick fix to getting out of debt if you’re saddled with something like a car loan or a student loan payment. However, with sustained efforts over time, you will be able to pay off your debt.

Tips to Overcome:

One way to alleviate some stress is to create a debt payoff plan. And two helpful methods to execute that plan that you can consider are the debt snowball and the debt avalanche methods.

Once you’ve crunched the numbers, you’ll be able to see exactly how long it will take you to pay off this debt. Be patient, stick to the plan, and you will be able to live debt free.

If you are financially unable to make debt payments, it’s okay to seek help. Call up your loan provider and tell them about your situation. They may be able to help put you on a more affordable plan.

You can also turn to the free services offered by the NFCC and Money Management International if you need some extra support. These non-profit organizations are perfectly poised to help folks who are in debt up to their eyeballs and riddled with the same common money fears.

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Money Fear 3: Actually Having to Use Your Emergency Fund

Having an emergency fund is a great way to enjoy more financial peace of mind because you know that if disaster strikes, you’ll be covered. However, some people are afraid of having to use their emergency fund! They want to keep it untouched and intact.

We totally get it. If you’ve worked really hard to build up a rainy day fund, you don’t want to see that account emptied. It can feel like you’re starting from scratch, and can even knock you back down to Money Gear 1!

Of course, no one wants to use their emergency fund, but if the thought of tapping into it is causing you anxiety, try flipping the script and looking at it from a different perspective.

Tips to Overcome:

Instead of focusing on the negatives of having to use your emergency fund, think instead about all of the wonderful things that using that E-fund will prevent you from doing. Like taking out credit card debt, or having to borrow money from friends and family. In the case of job loss, it can allow you to be pickier when finding a new employer, instead of having to take the first position offered to you.

We can’t plan for everything. That’s why it’s totally okay to use your emergency fund. That’s what it’s there for!

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Money Fear 4: Not Having Enough Money to Retire

With figures like 1-2 million dollars being thrown around, it can be a totally rational fear to worry that you won’t have enough money to retire…

The good news is that retiring doesn’t have to be that expensive. In fact, the more you’re able to lower your living expenses, the less money you’ll need to have saved up to retire comfortably.

But if you’re still worried about having enough money to retire, the best thing that you can do right now is to just get started investing. Even if you can only find a few extra dollars to invest each month, it will make a sizable difference in the long run thanks to the magic of compound returns.

Tips to Overcome:

Start investing ASAP. One way to start investing without really even noticing it is to use the Acorns app. It rounds up your purchases to the next even dollar amount and invests that change. While this won’t be enough to retire to your own private island, it can help you to get started, and help you to feel more like an investor!

Another great way to alleviate common money fears around retirement is by investing a little bit more. Find one line item in your budget that you can cut and invest that money in a retirement account instead. Again, small differences in how much you’re able to contribute can amount to huge amounts of money over 10, 20, or 30 years.

And lastly, one more tip to invest more money is by paying yourself first. Place money into your retirement accounts and savings at the beginning of the month, before you spend on other things. You’ll find a way to spend less on things if you only have a certain amount of money in your bank account!

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Money Fear 5: Not Being Good at Investing

With tons of financial services marketing their products to you and “investing bros” shouting out which stocks you should be buying this week all over social media, it’s no wonder that a lot of people find investing to be an intimidating and daunting task. However, intelligent investing can actually be quite simple when you tune out that noise.

The truth is, a lot of the finance industry wants you to feel like you can’t do it on your own because they want a piece of the action, they want your business. But, I’m here to tell you that you can do it on your own!

Tips to Overcome:

If you’re worried that you won’t pick the right stocks, why not just buy them all? For example, if you invest in an S&P 500 fund, you’re essentially buying stock in 500 of the top publicly traded companies. That’s a great start!

You can get really far on your own just by purchasing low cost diversified funds, like a total stock market or target date retirement fund that reflects your likely retirement date.

Create a written investing plan and stick to it to safeguard yourself from investing emotionally based on what’s happening with the market at that moment in time, and watch as your wealth grows slowly but surely over the years!

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Money Fear 6: Losing Money in a Market Downturn

Another reason why some people put off investing is because they are afraid of losing all of their money if the market has a rough year. 2022, for instance, wasn’t a fun year for investors! However, if you’re investing for the long term, there’s really no need to worry about down years all that much!

If you see the stock market dip, remind yourself that this is totally normal. In fact, 10-20% declines in the S&P 500 have occurred about once every 2 ½ years since 1946. Plus, corrections of 5-10% tend to recover in about a month.

Even severe drops of 20-40% which are associated with recessions don’t seem to take very long to recover. Typically, it’ll be back to business as usual within the span of just 14 months.

Tips to Overcome:

The longer you keep your money invested in the market, the less likely you are to lose money. For example, if you keep your money invested for a year, your chances of taking a loss are around 25%. Leave that money in the S&P 500 for 10 years, and your chance of losing money drop to just 4%.

This is why, as long as you aren’t using investing to make a quick buck, you really don’t have to pay close attention to the day to day fluctuations in the market. They’re erroneous to you. So to mitigate common money fears around stock market losses, check your balance less frequently, and continue to invest no matter what is happening in the market. Your future self will thank you!

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Money Fear 7: Running Out of Money in Retirement

Another one of the most common money fears about retirement is running out of funds and needing to return to work in older years. We get it, life is uncertain, and this is a totally rational fear.

The good news is that there are plenty of steps you can take to mitigate this risk.

Tips to Overcome:

As we mentioned with Money Fear 4, retirement can cost less than you actually think. Lowering your expenses now can have a significant impact on how far your money will stretch in those golden years.

Plus, it can be helpful to remember that one of the biggest line items in your budget (saving for retirement) will no longer be necessary. You won’t need to save for retirement anymore, because you’ll be in it!

It can also be helpful to reframe the way we view work. If you’re able to find work that you enjoy that compensates you fairly, would working a little bit in retirement be the worst thing ever?

Retirement doesn’t have to be a black and white all-or-nothing proposition. If you’re really worried about not having enough, you can create an in-between phase by working just a few hours each week to garner some additional income. Plenty of retirees still continue to work part time at jobs they enjoy. They can be an enriching and fulfilling experience.

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Money Fear 8: Getting Priced Out of the Housing Market

With housing costs rising 30% in the US Between 2020 and 2022, it’s no wonder that one of the common money fears is getting priced out of the housing market.

Tips to Overcome:

If you’ve got this money fear on your mind, it can be helpful to remind yourself that just because rapidly rising prices have become normal over the past few years, that doesn’t necessarily mean that it’ll be like that forever. 2020-2023 doesn’t tell the whole story. It’s just one piece of the puzzle.

The good news is that the housing market is hyper-local. Remember, you’re not buying the entire housing market, you’re buying a specific home in a particular area. Even different streets can have vastly different prices. You can still find a good deal if you are patient, flexible, and willing to do a little hunting!

The best way to tackle this money fear is by getting together a home buying strategy and sticking to it. If you’re looking to buy a home but not for a few years, make sure to put your down payment into a High Yield Savings Account. That can help to hedge against some of the inflation and rising costs while you continue to save.

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Money Fear 9: Not Being Able to Afford Your Kid’s College

Sometimes, it can feel like you have to open up a 529 plan the minute your kid is born (or even before!). However, that’s just not true. Tou don’t have to save for your kid’s college at all! Your love for your offspring is in no way related to how fully you stock their 529 account.

Don’t get me wrong- helping your kids to get through college is a really nice thing to do if you’re able to, but it’s crucial to make sure that your own retirement is already being funded before you start socking away tuition money for them.

Tips to Overcome:

There are plenty of ways to lower the cost of college, like scholarships, becoming an RA, or going to a more affordable state school. However, there aren’t scholarships for retirement! That’s why we’ve placed saving for your kids’ college in Money Gear 7. It should be far down your list of financial priorities.

Plus, there’s no guarantee that your kid will even want to go to college! More and more young people these days are opting to go to trade school, start businesses, or even just start working in a field they enjoy right after graduating from high school. If your kid decides they want to pursue a higher education, get creative and scrappy. You’ll be able to make it work.

Just like if the oxygen masks drop down on a plane, you have to put on your own mask first before you can help others. Don’t put the cart before the horse. Focus on saving for your own retirement first. If not, your kids might graduate without student loans, but they’ll feel the pain later on when they have to financially support you in those retirement years.

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Money Fear 10: Not Having Enough Life Insurance

Another of the most common money fears many folks deal with is worrying that in the unfortunate event that they slip on a banana peel and fall off a cliff, their families won’t be able to get by without their income.

Of course, if you have a family or spouse that depends on your income, you want to make sure they are covered in the chance that you meet an untimely end. However, you might need less coverage than you think!

Tips to Overcome:

The great thing about term life insurance is that it can cover you for a certain number of years, and getting a large amount of coverage is much cheaper than opting for a whole life insurance policy. Hopefully, by the time your coverage expires, your children will be adults and they won’t need that money to survive. And you will have saved up enough money that your spouse will be able to use that to get by.

Plus, you might not even need a multi-million dollar policy if you’re able to self insure through savings, investments, and passive income. Having life insurance is a smart money move. But getting the right coverage from a term policy is likely cheaper than you think.

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Money Fear 11: Not Being Generous Enough

A lot of frugal folks worry that they aren’t being generous enough with their money! And some people think they have to be multi-millionaires to make a real impact. That’s just not true. Giving any amount (even $1) can be enough to help someone else in need or a cause you care about.

There are a ton of ways that giving away money can totally enrich your life. It can help you to develop a healthier relationship with money, deepen ties with your community, and help you to be a part of something bigger than yourself. Plus, giving away some of your money can help to prevent you from becoming too cheap!

Tips to Overcome:

Luckily, this is one of those common money fears that comes with an easy fix. Just make a giving plan!

Commit to giving a certain percentage of your income, or volunteering a certain number of hours each week. You can work this into your budget by creating a giving category. Come up with a goal to work up to. If you’d like to eventually give away 15% of your money, you can work your way up to it by starting small and ramping up over time.

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Money Fear 12: Having to Support Your Aging Parents

If you have parents who are getting into their 60s and 70s, you might start to wonder whether or not they’ve got enough in the bank to retire. This is one of the most common money fears among adults!

I won’t sugar coat it. Having to financially support your finances can definitely cause some financial stress, especially if no one is prepared for it. That’s why it’s important to create a plan! The earlier the better.

Tips to Overcome:

Get your siblings together and talk together with your parents about their retirement plans. Ask the hard questions about how much they’ve saved. At best, you’ll be surprised to find that they have more set aside than you thought. At worst, you’ll know exactly what you’re up against.

The good news is that there are some government programs that can help if your parents really don’t have enough savings to retire. For example, Medicare can cover medical costs for those over 65, and some local programs can even help with housing and food. Be sure to do your own research and see what programs your parents may be eligible for.

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Money Fear 13: Rising Healthcare Costs

Last but not least of the most common money fears that HTM listeners expressed… is that increasing healthcare costs are going to cut even more into their budgets. With the average health insurance premiums clocking in at a whopping $7,911 for a single person and $22,463 for a family, it’s no wonder that this money fear is at the forefront of the minds of many.

If these figures keep you up at night, you’re not alone. That is a huge chunk of change. However, there are a few things that you can do to keep your healthcare costs down.

Tips to Overcome:

The first option is to see if you qualify for subsidized health insurance through Healthcare.Gov. A lot of folks with low and moderate incomes will find that their premiums are pretty reasonable!

If you aren’t able to get insurance through Healthcare.gov, one thing you can do to lower your healthcare costs is to self insure to a certain point, and choose a plan with a higher deductible. This will make reduce your monthly premiums, which is great! However, you need to be prepared to pay more out of pocket until you reach that higher deductible. The good news is that you’ll still be protected from going into massive medical debt should you have an unexpected medical emergency.

Another option is to look for an employer that covers those costs, which would protect you from steep increases in healthcare costs. If the plan at through your current employer is meager and expensive, consider looking for work at a company that offers better benefits.

Lastly, it could be worth investigating if a Health Sharing plan could work for you instead. Health Sharing functions similarly to insurance, but it is not insurance. These health sharing plans are typically faith based or community based organizations where people pool money to help cover each others medical expenses, and your annual contribution can be much less than your health insurance premiums and deductibles. However, this may not work for everyone so be sure to do your own research on what is covered, and check out Matt’s Medishare Review!

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The Bottom Line:

Life is unpredictable, and we can’t always plan for everything. If these common money fears are taking up space in your life, the best thing that you can do is to make a plan, and focus on the things that you can control, like your spending, how hard you work, and your relationships.

If you’re reading this, I’d wager that you’re pretty smart and motivated, so should any of these fears become a reality, we know you’ve got what it takes to face them head on.

While discussing common money fears we both enjoyed a Hopfenweisse by Schneider Weisse. Massive thanks to Zach for sharing these with us! And please help us to spread the word by letting friends and family know about How to Money! Hit the share button, subscribe, and give us a quick review in Apple Podcasts. Help us to change the conversation around personal finance and get more people doing smart things with their money!

Best friends out!

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