A Plan of Attack for Fighting Fear and Money
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I think about the situation now and my palms still get sweaty. We were somewhere in the mid 20th floor of the Bellagio. We had just spent the past few months churning credit cards so we could go to Vegas for free and I couldn’t even enjoy the room.
Why you ask? It’s because I’m deathly afraid of heights. For some reason, and as long as I can remember, I always get irrationally fearful when I’m any more than three feet off the ground. Our kick butt room in the Bellagio had three massive floor to ceiling windows and instead of enjoying the view of The Strip and the Bellagio fountains I was wondering how on earth I was going to enjoy our four night stay for my 40th birthday.
My fear was once again staring me in the face and I had a decision to make. I could either face my fear and enjoy the room or I could allow my fear to hold me back and not enjoy the fruit of our planning. You might be asking yourself what this has to do with finances, but I believe that fear and money are linked together much more than we realize.
When Fighting Fear, Knowledge is Power
Whenever I’m confronted with heights I always go through the same process. I irrationally think I’m going to hurl head long into falling off of wherever I’m at. Saying it even now I know it sounds crazy.
Take my experience at the Bellagio for example. God only knows how thick the glass is in the windows and I still wanted to get into the fetal position and suck my thumb. It never fails I know it’s going to happen.
What talks me down from that fear is knowledge. The knowledge that short of me opening the window and jumping out, absolutely nothing is going to happen. I had to arm myself with that knowledge each time I entered the room so I could effectively combat that fear and enjoy my vacation.
Money can very much be the same way. Out of fear, we trick ourselves into thinking that we can’t pay off our debt, that we don’t know how to start saving for our futures, etc. This can cause us to do crazy things like avoiding beginning down whatever path it is because we fear what might happen as a result. What this can unfortunately lead to is a self-fulfilling prophecy that will hold us back in the long run. However, by arming ourselves with knowledge we can turn fear on its head and attack it as opposed to being crippled by it.
Money and Fear: Turn That Power Into Action
Knowledge is power, but it must be turned into action to make an impact. With my Bellagio experience that meant facing my fear and actively choosing not to let it hold me back from my enjoyment of our trip, or the room.
The same thing needs to happen with managing money. We’ve all likely seen some who are making wise financial decisions and living by some sort of budget yet are holding themselves back thanks to one reason or another. They may be living overly frugal lives or hoarding every last cent because they fear they will run out of money if they spend on anything they enjoy.
What I have found many times though is that this often leads to a self-fulfilling prophecy. They fear spending money so they live lives where they spend nothing and turn into what they fear most…having nothing! Instead, we can choose to put our mental focus and activity into developing three financial habits that help us when we’re dealing with fear and money.
Three Fear-Eradicating Financial Habits
These three fear-eliminating financial habits aren’t rocket science. In fact, they’re really basic.
- Know what you have.
- Live on a budget.
- Make wise decisions.
Setting an accurate goal begins with a baseline. That’s true when it comes to living free of fear and money. Knowing what you have coming in each month, as well as what you have saved for the present and the future in terms of savings and investing is the critical foundation you need for financial independence and freedom.
With your foundation in place, you can build upon it with a budget that accurately reflects your income and expenses. A budget eliminates fear by helping you live within your means, not above or below them.
Finally, and this is perhaps the hardest because it never ends – we have to learn to make wise financial decisions, day in and day out. Some days that will mean saying ‘yes’ to dinner with friends; other times it will mean saying ‘no’ to the new coffee maker you want. But at the end of the day, it’s about balance, and knowledge because as I’ve said before, knowledge (not fear) is true power.
That’s it. Simple right? While these principles are easy to understand, I realize that doesn’t make them easy to implement. Discipline, self-control, diligence and perseverance are all required as we strive to think rightly about fear and money.
It may sound like I’m saying to go out and spend, spend, spend but I’m not. What I’m saying is that it’s ok to make value based spending decisions, as long as they’re within your long-term goals and plans. Don’t allow that fear of not being confident in what you’re doing or of running out hold you back, but let it drive you to gain knowledge that can be turned into action. That action can help you appreciate the balance of enjoying what you want in life while also hustling like crazy to get to where you want.
What is one thing you fear financially that holds you back? Do you choose not to enjoy things in life out of fear you may not have money in the future? How do you combat irrational fear?
John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.
Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.
Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.