If Frankenstein and Freddy Krueger haven’t frightened you enough during Halloween last weekend, try confronting something more tangible — those financial fears keeping you up at night.
Money concerns don’t have to be a nightmare. Here are five common financial fears and ways you can overcome them.
1. Unexpected medical costs
We have all been there. Even with a solid health insurance plan, pricey out-of-network visits and increasing deductibles can be frightening. It’s important to not only have a solid health insurance plan that will cover you in your worst-case scenario but also to familiarize yourself with the terms.
If you know exactly what you’ll be expected to pay in the case of a medical emergency and where to expect coverage, you can better prepare, both financially and mentally.
2. Money-draining emergencies
Medical emergencies aren’t the only surprises that can put a strain on finances. These can include unexpected global pandemics and job layoffs, but also smaller costs like car maintenance or a broken hard drive.
For unplanned financial emergencies, it’s important to have an emergency fund in place. Ideally, your emergency fund will cover at least six months’ worth of expenses, including everything from insurance premiums and mortgage payments to groceries and utility bills.
If unexpected financial burdens are still giving you nightmares, direct more savings toward your emergency account as an added safeguard even after you’ve reached the six-month threshold.
The fear of something happening, if it’s not planned for, will keep you up at night. Contact us if you need further help.
3. Losing a job
Like other financial fears that stem from an inability to anticipate the unknown, some of the uncertainty can be mitigated by establishing an emergency fund. It’s also helpful to have a backup plan.
Think about what you could do with your knowledge and experience. What’s the backup plan if that were to happen? “Could you teach, could you start something of your own? What would be a side hustle if you lost your job?
If you work in tech or industrial sectors that are susceptible to layoffs. Ask yourself exactly how you would meet your financial obligations and establish a game plan.
4. Lack of retirement savings
It’s never too late to begin saving for retirement, though, even if your contributions start small.
Evaluate your financial plan and make room in your budget for retirement savings.
Take advantage of employer plans and catch-up contributions if you’re eligible, and set up direct deposits so you don’t even have the chance to miss the money before it goes into your retirement account.
5. Becoming overwhelmed by debt
If you’ve managed to get yourself into debt through loans, credit cards or a sizeable mortgage, working your way to being debt-free again can feel like an impossible task.
But there are always actions you can take to help yourself cope with debt. Speak to your lenders to see if you can negotiate more manageable payments. Work out how much you’d need to pay each month to clear your debt in an achievable amount of time, such as five years.
Finally, make sure you don’t take on further debt, otherwise you’ll simply be undermining all of your efforts.
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Ancojada Limited trading as Prosperitas Consult is not authorised or regulated to provide financial advice.
All financial advice is provided by other regulated businesses.