A Guide to Managing Your Fear of Money
[Editor's Note: Kristin Wong penned this article on money management tips even through your fears a couple years ago, but it's as relevant today as it was then.]
My first year of high school, I was looking for an easy, goof-off elective — a class that would allow me to take a break in between Geometry and English, and maybe catch up on some magazines or take a quick nap. “Debate” sounded right up my half-assed alley.
On the first day of class, I was told we'd have to attend tournaments, in which we'd debate on topical issues. Politics. In front of people. I was a quiet student, and the most I knew about politics was that President Clinton had a cat named Socks. The thought of a debate tournament terrified me. But, because I was also lazy, I chose not to drop the class. I'll just deal with this fear later, I thought. A few months of classroom training and research went by, and I found myself fairly knowledgeable about current events. Which meant I'd have to participate in a tournament. Which meant I'd have to speak. Publicly. And this was one of my greatest fears, second only to cockroaches.
I vaguely remember that day, standing in front of a panel of judges. The lights dimmed, and I'd just drawn a question on U.S. foreign policy. Even now, writing this, I tremble a little, remembering how small I felt. I couldn't tell you exactly what I said, or how the judges reacted; I only remember opening my mouth and allowing words to come out. I dealt with it. I did what I needed to do.
Since then, I've had to let go of many, many fears. Sometimes, letting go is gradual. I was afraid of money for a long time. It kept me from budgeting, but I got over it. Then, it kept me from investing, and I just recently got over that. Even more recently, I've had to deal with one of my greatest money fears — not having a job. It was scary. I wanted to bury my head in the sand. But I dealt with it and did what I needed to do.
Related >> Money and Security: Fear of the Future
For some people, a fear of money can be overwhelming. Here's what I think you can learn from your fear — and how I think you can learn to manage it.
Why you might fear money
We've all got roots, and those roots shape our interests, personalities, and, yep, our fears. If you associate money with problems, it's probably because money has been a key player in the problems in your life. In college, I hated money. At one point, I worked two jobs and went to school full time, and it was because I didn't have enough money to pay for my crap. So money = my being exhausted and miserable.
Or, maybe money has been an uncomfortable topic in your life. Maybe you heard your parents shouting a lot about money when you were growing up. Maybe money was a big issue in a divorce. When you associate money with stuff like that, no wonder it's a taboo topic.
Or, hell, maybe you're just a natural worrier, like me. Even when things are good, I worry. Actually, especially when things are good, I worry. We could spend all day analyzing why I'm like this, but that's TMI and, suffice it to say: there's always a reason for money being scary. And, by its very nature, there's a lot of potential for money to be associated with scary stuff. Money has a large role in some unsavory things: extortion, Ponzi schemes, child support battles, etc.
Why this fear might hold you back
We've talked about this quite a bit, so I won't dig into it too much deeper. But a fear of money can hold you back in many ways:
- It makes you afraid to manage your money, and then your budget gets all crazy and you go into debt.
- It makes you afraid to look for a better job or ask for a raise. You tell yourself money doesn't matter to you, and then you become underpaid.
- If you're terrified of losing your money (like me), it can hold you back from enjoying life. Or it can just make your life less convenient. Like when I was too cheap to buy a new computer for work and wasted hours rebooting and dealing with freezes. I could have been much more efficient, and much less annoyed if I bit the bullet and bought the new computer — which I had even saved up for!
- Fear is a strong, emotional reaction, and strong emotions can hurt your ability to make a rational, reasonable decision.
How you can get over it
Here's what worked for me, along with other input.
Pinpoint your fear
It helps a lot to understand the root of your fear. Recognizing the source of your issue can help you better manage it. Let's say you're reluctant to look at your budget. Then, when you think about it, you realize you're avoiding it because you're afraid of what money has represented to you in the past. Maybe that budget will be busted. Maybe you'll see some numbers you don't like — because that's happened before. Knowing where your fear stems from can help you cope better. It makes the action digestible too. Knowing the source of something gives you a starting point for progress.
In Taking the Leap: Freeing Ourselves from Old Habits and Fears, author Pema Chödrön uses a Buddhist principle to discuss fear. This is a practical money site, so I won't get into the spiritual aspect of it too much. But her overall point is that there are triggers to our fear. And these triggers hook us to a downward spiral of greater and greater fear, until whatever we're afraid of becomes insurmountable.
“If we catch it when it first arises, when it's just a tightening, a slight pulling back, a feeling of beginning to get hot under the collar, it's very workable. Then we have the possibility of becoming curious about this urge to do the habitual thing, this urge to strengthen a repetitive pattern.”
Instead of “strengthening” that downward spiral into greater fear, Chödrön says we should learn to understand the “familiar taste” of a negative pattern.
For example, I learned to do this with my public speaking. In class, when we'd practice for the tournaments, I'd feel a knot in my throat. I'd feel my stomach tightening. I knew what was coming next — thoughts like, What if I say something stupid? What if I trip up? From there, I'd get the shakes, and my face would turn red and I'd stutter a lot.
With money, I have a very familiar pattern when it comes to asking for a raise. First, I realize that I deserve a raise. I put it off. I rationalize it. Well, the company is going through tough times, I'll tell myself. Then, I get disgruntled.
These are all patterns of fear. Learning to recognize them is important.
But then what?
Face your fear
Once you know why you're afraid, and you know what happens when you're afraid, you're better equipped to face your fear. Chödrön says you should embrace it, even.
“Instead of seeing [your fear trigger] as an obstacle to be overcome, it is more helpful to consider it an opportunity for transformation, an open doorway to awakening. When I realize I'm triggered, I think of it as a neutral moment, a moment in time, a moment of truth that can go either way. What I'm advocating is that in that precious moment, we start to make choices that lead to happiness and freedom rather than choices that lead to unnecessary suffering…”
In more practical terms, you'll have to be “exposed to the stimulus,” says psychiatrist Ash Nadkarni in an interview with U.S. News:
“She adds that if you're continually exposed to the stimulus, you will hopefully start questioning and rejecting the thought patterns and behaviors fueling your fear.”
This is what I did when I forced myself to budget, every day. When I didn't have it together financially, the very thought of looking at my bank account made me want to gag. I'd developed a three-step pattern: 1) think about budgeting, 2) gag, 3) do something else instead.
When I committed to managing my fear, I forced myself to look at my budget each morning. The gag trigger was still there, sure. But I changed the pattern.
Related >> Budgeting Dilemma: How Do You Decide What You Can Afford?
Probably the most helpful tool in your arsenal of overcoming fear is knowledge. After all, it's power, right? And power gives you control, and control helps you to stop letting your fears take over.
Had I not spent months brushing up on current events, I probably wouldn't have been confident enough to open my mouth in that moment. What would I have said in my debate? President Clinton is a great sax player? Socks Clinton rules?
In learning to get over my fear of investing, I read pretty much every Get Rich Slowly article on the topic (plus, some other places, ha). I'm certainly not a pro, but investing is a lot less scary to me now. And not only is not scary, it's actually something I'm excited about, because of my returns.
Focus on the positive
Not being afraid doesn't mean you'll never make mistakes. I got over my fear of public speaking (kinda), but I still say really dumb stuff all the time. It's embarrassing, but I learn from my mistakes, make a note of them, and then move on. For the most part, I try not to dwell too much.
Sometimes, I still make money mistakes too. I overspend, for example. But I learn to deal with it, read up on how to avoid it, and then focus on the positive ways money influences my life: It gives me security. It helped me get rid of debt.
This is just what I've found to be helpful. Like most things, you have to do what works for you. But fear seems to be an ongoing theme in my life lately, and I think it's because I'm learning just how much fear holds me back. I think it's totally okay to be afraid too. What matters, I think, is how you deal with it. Maybe “letting go” isn't the best way to put it. Maybe it's more about embracing and managing your fear. And then, ideally, if you deal with it productively, your fear transforms into something productive.
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