Week 2 of a new Monday Money series of blog posts I’m hosting with Emma at EmmaDrew.info and Lynn from Mrs Mummypenny. It’s a great way to share content about money, so do check the links at the end for other brilliant money posts! Plus, find out how to join in if you’re a blogger. We’d love you to add your posts.
Are you afraid of money?
In theory, money is simple. Earn some cash, spend it on stuff we need, job done.
In practice, many of us are scared of money. I’ve been thinking about attitudes to money, after writing an article on financial FOFO, the financial Fear of Finding Out. It’s for the June issue of Woman & Home, on sale later this week. (Find the best offers on a Woman & Home subscription here*).
Fear of debt, dislike of maths, complicated jargon and lack of time can all make us ignore money issues. Bill switching is boring. Planning for tomorrow could mean deprivation today. Maybe there’s an element of Cinderella syndrome, waiting for Prince Charming to sweep us off our feet, and sweep away irritants like an overdraft.
Money is also tangled up with our emotions. I spoke with Simonne Gnessen, founder of Wise Monkey Financial Coaching and author of Sheconomics, who pointed out that spending can be used to celebrate, console ourselves, show off, shower people with love or even control others. That’s an awful lot of pressure on our bank balance.
Reasons to tackle financial FOFO
Trouble is, Financial FOFO can seriously damage your wealth. Ignoring money issues will only make matters worse. But by facing our fears, we can take control, shed stress and be able to sleep at night.
Simonne said: “Taking control of your spending isn’t about sacrifice and deprivation, it’s about creating freedom and options for your future.
“If you are drowning in debt and don’t have anything saved, you can’t quit your job and do something more creative, fulfilling and life enhancing.”
Relying on your other half may not work long term either. Shifting responsibility could leave you with a whole heap of trouble if you are widowed, or Mr Right becomes Mr Very Wrong.
I also talked to Maria Nedeva, a business school professor in Manchester, who preferred letting her husband look after money matters. Unfortunately, they both suffered from Financial FOFO.
Maria said: “I didn’t look at our bank statements for 10 years. Finally, I had a very bad feeling, and told my husband I wanted him to check.
For Maria, discovering they had run up £100,000 in unsecured debt was “the crisis that made me snap out of ‘I don’t want to know’ and start finding solutions to the problem”.
From turning a blind eye to family finances and her husband’s business issues, Maria swung into action. She threw herself into slashing unnecessary spending and earning extra cash. The couple paid off their debt in three years, and now, 5 years on, have built more than £300,000 in investments. Even better, Maria now writes a brilliant blog over at The Money Principle, all about growing income, eliminating debt and building wealth.
Tips on facing your fears
Time to feel the fear and do it anyway! Find your fear below, plus some tips on how to tackle it:
Fear of shame
There’s a lot of stigma around debt, which can make us feel ashamed. But debt has the power to destroy lives. Ignoring threatening letters, worrying statements and pestering phone calls won’t make the problem go away.
The good news is that no debt is ever too big to tackle, and the sooner you face up to your debts, the sooner you can start improving your situation. Set aside time to check your balances and add it all up. If you can plan how to cut the interest paid and increase your repayments, great. If it’s more of struggle, don’t be afraid to seek help. Step Change has a free debt remedy tool. It only takes about 20 minutes, and you could even try it in the middle of the night. Otherwise, contact one of the free debt advice services like Citizens Advice or National Debtline.
Fear of boredom
True, financial admin like bill switching and pension planning aren’t the most exciting occupations. I try to tackle one big task every month, to make it manageable, and celebrate the money saved.
Fear of maths
Sometimes, financial FOFO has deep roots in our childhood. If you never liked maths at school, you may carry a fear of figures into adult life. But if you sit down with a calculator or spreadsheet, most money issues are just about adding up, taking away and percentages. You can also find help online, for example by finding a budget planner where you just plug the numbers in, and the calculations are all done for you.
Fear of deprivation
Avoiding money matters could be a way to avoid decisions we don’t want to make. Opening that credit card bill or pension statement could mean deciding not to buy something or go somewhere. Rather than focusing on any sacrifices today, Simonne suggested thinking of it as a gift to your future self.
Fear of seeming mean
We’re not just afraid of depriving ourselves, but also of depriving other people. Frugality is often associated with being mean or penny pinching. Spending, meanwhile, is associated with being generous, treating friends and family to drinks, food and gifts.
But a thoughtful present can be valued far more than an expensive but impersonal gift set. Welcoming people round for a meal, spending time with your nearest and dearest, playing with your children, can cost less but mean much more. Plus, sticking your hand up and saying “Could we do something that costs less?” could be a relief to other people who are also worried how they’ll afford it.
Fear of losing status
We are surrounded by pressures to consume, whether it’s the latest clothes, shoes, cushions, cars, gadgets, holidays, homes or whatever else. Saying ‘no’ when everyone around you is splashing the cash can be hard, but unless you’re a squillionaire, we all have to make choices. If you wonder how someone else seems to have it all, remember it could actually be propped up by overdrafts, credit cards and a whole heap of stress.
My best advice is to work out what really matters to you, and plough your money into that. Buying something might bring a short burst of happiness, but it doesn’t actually make us more successful or nicer people. I work on being grateful for what I already have, and value peace of mind rather than extra stuff. But if your friends are hung up on possessions and spending for the sake of it – might be worth finding new friends.
Fear of becoming an adult
Taking control of your own money matters can feel scary if someone else has always done it for you. Maybe your parents or partner always took those tricky decisions, leaving you footloose and fancy free. Break down big money matters into smaller steps, and feel proud when you flex your financial muscles and tick things off your ‘to do’ list.
Fear of jargon
The financial services industry doesn’t do itself any favours with the complicated jargon used to describe many products. I try to find articles and blog posts that explain matters in language that’s easier to understand. Often, the easiest way is to ask questions, so I’ll ask experts or ring customer services to find out more.
Fear of perfection
Sometimes, we put off money matters because they seem too complicated, and it feels like it will take too long to digest all the information and make the right decision. For me, switching broadband was a nightmare, with all the technical terms, and I still procrastinate about the right investment decisions.
But progress is better than perfection. Better to start soon and start small. So for example, I called my broadband company and asked about cheaper options, rather than trying to work them all out for myself. With investing, I finally realised I didn’t have to know everything about investing to start. I could pick a sensible option and learn more later.
Now – over to you. Which fears sounded familiar? Any extra fears or tips for tackling financial FOFO? Do say in the comments, I’d love to hear.