I was thinking about how I should celebrate Halloween this year and I couldn’t think of anything scarier than writing my first (non-introductory) blog post. It is so scary to me that I have been putting it off for almost a year. But it’s the perfect way to celebrate the 2nd spookiest day of the year (second only to Tax Day, April 15th).
Since it is the season for scares, let’s talk about fear in finance. A famous Jedi Master once said, “Named must your fear be before banish it you can.” If you can identify the fear and really understand what it is you are afraid of, it will be a lot easier to manage. It should be the first step, just like Yoda says. So I’m taking his advice and naming some of my biggest fears.
- Working my body to the skeleton and not being able to retire. My Dad has always worked physically demanding jobs like food delivery to our local ski resort. Every day during the winter he would haul kegs and boxes of food upstairs by himself and has really used up his back and body in the process. Running out of money in retirement and being physically unable to work is probably one of the most common fin fears.
- The certainty of death and taxes. I was going to try to relate taxes to zombies since they come back to life once per year to try to eat you alive, but I think taxes are scary enough on their own. Our property taxes in particular give me a fright. Since we are newer homeowners I worry about forgetting the large, annual $2300 expense. This could wreck my financial planning and the budget. Did you know that you can lose your house if you fail to pay Property Taxes? If it could happen to Happy Gilmore’s grandmother, then it could happen to me. And I’ve tried golfing…I’m horrible at it.
- Lifestyle creep. I’ve experienced it. It is even creepier than you would expect. Our food spending has gradually increased the past few years without me noticing. I was very surprised last year when I compared our spending to national averages. The $1000 that we spent one month for just the two of us was eye-popping and gave me the creepy crawlies.
- Losing money in the stock market. When navigating the haunted maze that is the market, you are lucky if you make it out alive. I’ve been struggling for all of 2017 trying to get my IRA contribution invested since the market has passed many all-time-high records. The experts say that trying to time the market is ineffective since most people end up sitting on the sidelines and missing out on market growth, but I just can’t help it. It would be grim if I invested my whole annual contribution and then had a serious market correction the next day.
- Being haunted by past purchases. The Ghosts of Purchases Past may not be turning your lights on and off in the middle of the night but they certainly can hang over your head until there is a spiritual intervention. The worst thing about debt is that making small minimum payments can take forever to pay off the principal, preventing your debt from crossing over to the other side.
Identifying fears is less pleasant than a candy corn hangover, but it can be very rewarding. Unnamed fears tend to sneak into our decision-making processes. Knowing our fears can help us make better decisions for our life and wallet.
Do you share some of these financial fears?
What financial fears haunt you?