A Plan of Attack for Fighting Fear and Money

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Fear and money are easily mixed. However, that often leads us to a self-fulfilling prophecy. I share how to turn fear on its head and live free of fear.

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.

  1. Know what you have.
  2. Live on a budget.
  3. 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.

Fear and money are easily mixed. However, that often leads us to a self-fulfilling prophecy. I share how to turn fear on its head and live free of fear.

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?


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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.

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  • Mark@BareBudgetGuy says:

    So I take it you didn’t to the Big Shot at the Stratosphere? Best ride ever. I could definitely learn to live with less financial fear.

  • Natalie @ Financegirl says:

    This is a big one for me, and for people I see with student loan debt. Most are in denial and haven’t created a get out of debt plan, leaving them feeling hopeless and like they’ll never build wealth. Reading a lot of personal finance books helped me.

    • John Schmoll says:

      I dealt with a lot of that when I was paying off debt Natalie. PF books are a great resource. That knowledge can definitely help move people in the right direction.

    • Mrs Lewis says:

      There are people at my spouses law school who have a 10 year pay off plan which terrifies me! I can’t be 40 years old with the last $75,000 looming over my head. I agree with you, making a plan, ANY plan is a place to start.

  • Holly@ClubThrifty says:

    I have a natural tendency to save more than I need and be overly cautious. I have to say, I have done pretty well conquering this the past few years. I still save a lot, but I’m willing to live a little!

    • John Schmoll says:

      I am as well Holly. I think it goes, in part, with working for yourself. But, what’s the point of doing all that saving and not living a little? At least that’s what I try to tell myself.

  • Tonya@Budget and the Beach says:

    Well I’m facing my own fear of letting go of being busy and hustling, because it’s like I’m afraid I’m going to get lazy again like I did with my last full time job. I think people want to avoid fear all together. It’s not about avoiding things in life that make you scared, it’s facing them head on. Or doing things in spite of fear. I used to be afraid to fly, but I just said, “well if I don’t then I’ll never travel, and that’s not an option. So if the plane goes down, well at least I tried.” Or some variation of that. 🙂

    • John Schmoll says:

      “It’s not about avoiding things in life that make you scared, it’s facing them head on.” I could not agree more Tonya! I think when it’s done in a smart way it can be a great avenue for personal growth.

  • Kim@Eyesonthedollar says:

    We spend quite a bit of money toward the end of the year replacing or upgrading household items that we’ve been putting off for years. I’m always afraid of falling back into old patterns if we start spending money, but at the same time, why on earth should we have a 14 year old couch that sags to the floor? I think having a large emergency fund helps alleviate my fears. It’s maybe more than recommended but I’m pretty confident we’d be able to weather just about anything if we had to.

    • John Schmoll says:

      I’ve dealt with that same fear as well – thankfully my wife tends to talk some sense to me.

    • Mrs Lewis says:

      I feel this way about buying clothes and getting a great deal on them. I’m also afraid of falling back into old habits, so I just don’t go to the mall and don’t put myself in a position to spend. Sometimes, I’ll just leave my wallet at home.

  • Laurie @thefrugalfarmer says:

    Awesome post, John. I know for us that for years we were afraid of having wealth. It was completely foreign to us (and to most of those we know) the thought of not struggling with money. We feared, subconsciously I think, having so much money that we didn’t have to worry each month. Again, irrational, but it was very real to us.

    • John Schmoll says:

      Thanks Laurie. I see that a lot with some close to our family. It’s frustrating to see on one level, but a feeling I dealt with when I was paying off debt so can empathize.

  • Kathy says:

    Other than fear of poor health, my only other fear is of losing our wealth. Well, that and heights like you. And then there is my fear of flying…. I actually seem to have quite a few fears, don’t I? But financially speaking, I do have a fear of losing our wealth. The stock market is crazy right now, which is where our money is since I hated being a landlord when we had rental properties. Does my fear of losing money make me shallow? Perhaps, but it also makes me pretty cautious regarding spending it. My hubby is forcing me to ease up on it just a bit.

    • John Schmoll says:

      Ha ha, I’m the same way Kathy so you’re in good company. 🙂 I don’t think that it makes you shallow – just cognizant of the current climate. It’s healthy to have a certain level of concern, you just need to not act rashly as a result.

    • Mrs Lewis says:

      What did you hate about being a landlord? It’s something I’m looking into in the future.

  • Tanya @ A Mindful Migration says:

    I’m afraid of heights and always worry about falling too. I tell everyone that’s why God made me short! 🙂 I had a set of grandparents who were very well off but no one knew because they lived like paupers. And this wasn’t the millionaire next door type of scenario. They never allowed themselves to enjoy their money because they deeply feared losing it. When I was a kid, I used to feel bad about the $10 they gave from Christmas because they acted like now they couldn’t buy groceries. It wasn’t until I got older that I realize how well off they really were and it made me mad. Not that they didn’t give more than $10 but that they made me feel bad for taking it. The flip side is that I have had family members spend recklessly and get themselves into deep financial trouble too. There is definitely a happy medium and it really does boil down to knowledge and facing fears.

  • Lindsey @ Cents & Sensibility says:

    Omg, I can so relate to this. I almost had a panic attack in an elevator going up the Eiffel Tower. :-/

    Like you mention, I had to make a conscious decision to not loose my bloody mind. And it’s the same thing with money – just a lot more frequent.

  • DC @ Young Adult Money says:

    Fear leads to stress and anxiety, and I’ve seen this happen many times to many people (myself included) over a financial situation. Knowledge is so key! It’s why my blog is so focused on making more money. People realize they can only cut their budget so much (and with those cuts potentially hate their lifestyle), but making money – or I should say, knowing how to make more money – can help ease fear.

  • Pauline says:

    Many people react to fear by being paralyzed and doing nothing. You have to make one small step to see it’s not that terrifying, then a second one, and by the time you know it you’re running.

    • Mrs Lewis says:

      Yes! Thank you! Adding up our debt was so scary, my husband didn’t even want to do until i pressed him. looking at the six figure number set me on the path to debt repayment and making my first payment this last December. Since then I can’t wait for my next paycheck, so I can make an extra payment.

  • Micharl Belk says:

    John, I hate heights too. I went up in the stratosphere and I came right down. Scary cat.

    Fear keeps me from doing many things. I guess I like the familiar.

    I am getting better though. Sometimes there is no choice.

  • Mrs Lewis says:

    Cheeseburgers, they’re something I love enormously but deny myself because they fall under the no eating out rule. Even though a tiny in-n-out burger can only set me back $2.50 in California it is a small indulgence I sacrifice so as not to fall down the rabbit hole of spending. I’ve also talked myself out of hanging out with friends for fear I would over spend. Being with friends makes me truly happy, especially since I live alone for the most part. So this year I’m going to be more conscious about seeing friends even if it costs a few bucks. I’m just going to suggest more $2 pints and potlucks. Maybe even a cheeseburger.

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