Money and security: Fear of the future

This is a guest post from Plonkee Money. Plonkee lives in England, where she writes about personal finance.

A friend of mine has a tendency to be swayed by conspiracy theories, his favorites being The Da Vinci Code and the fictionalization of the Apollo Moon Landings. I was talking to him the other day, and he asked if I knew that money held in savings accounts was loaned out to other people and that banks didn't have any money of their own. I was unfazed by these revelations.

There is no secret to the way banks work. I actually visited a fascinating museum exhibition on the history of money that explained all these details and more. I told him that, in my honest opinion, it was nothing to worry about.

I am comfortable with the realization that in some sense, modern money isn't real and it doesn't exist. Money has no intrinsic value, and isn't sought for its own sake. Instead money represents other things.

For some people, money represents freedom — money gives them the freedom to do as they please, and not having money (or worse, being in debt) constrains them. For me, money represents security. Having money means being secure; not having money means that at any given moment my whole life could come crashing down.

The extent to which I feel that money represents security isn't particularly healthy or rational, but it does have some beneficial effects. I have no consumer debt, and I prefer to have a reasonably healthy savings cushion. I pursue these goals not because they are sensible, but because they enable me to sleep at night.

On the other hand, I waste time worrying about money. Worse, spending large sums of money — even on things that I need — makes me extremely uncomfortable.

On the surface, my attitude toward money might seem reasonable, but in reality it isn't. My weirdness is masked by its very sensible effects. After all, the best personal finance advice usually involves maintaining a certain level of savings, and avoiding excessive debt or risk that makes you uncomfortable. But I always feel like I'm on the edge of a slippery slope, where the sign is pointing to rack, ruin and the end of my happy little world.

I don't want to surrender to my money-security fear because deep down, I know it's irrational. For many people, chronic overspending can be a symptom of an underlying unhappiness unrelated to money. I'm concerned that my own fear of not having enough money is actually a symptom of something else, and that I could be happier than I am. I don't want to restrict my dreams because I am frightened that the sky will fall in.

J.D. says: If I'd read this five years ago, it wouldn't have made sense to me. I didn't share these fears. But with my upcoming transition to full-time writer, I know exactly what Plonkee means. Suddenly I'm worried about the future, too. Is this normal? To what extent are your money habits motivated by fear?

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Minimum Wage
Minimum Wage
12 years ago

Hopefully people now have ast least a small sense of minimum wage angst.

Can you imagine yourself living in a bedsit?

Minimum Wage
Minimum Wage
12 years ago

Hopefully people now have at least a small sense of minimum wage angst.

Can you imagine yourself living in a bedsit?

Jon Morrow
Jon Morrow
12 years ago

It took a lot of courage to write this post. Thanks for posting it. I think this will resonate with a lot of people. There’s a very close relationship between psychology and money. The way you think about money, feel about money, and behave toward money is one of the primary determinants to how wealthy you become. Now that you’ve recognized it, there are two responses that I know of. First, you can channel that fear into motivation to keep you moving toward your financial goals. It works, but the downside is, you’ll probably feel afraid for the rest of… Read more »

Kevin
Kevin
12 years ago

This definitely sounds like me. I’m single and don’t have any burning desire to spend money to aquire ‘things’ that I don’t really need. Over the last year, my mom has been bugging me to redo my kitchen and to get a new car, but both are functional and in good condition and don’t really have anything wrong with them, so why spend the money. There are primarily two ‘fears’ that keep me on the path of saving a large portion of my income rather than spending. I’m single, and when I do meet that right woman and want to… Read more »

Plan Your Escape
Plan Your Escape
12 years ago

When you are dealing with investing – especially when you are new to investing – you are always balancing risk. Fear is what makes risk what it is … if you were never a bit scared about losing your money then you’d never worry about risking your money either.

Minimum Wage
Minimum Wage
12 years ago

I am very cheap and hate (resent, actually) spending money, wouldn’t that behavior tend to promote wealth?

The Financial Philosopher
The Financial Philosopher
12 years ago

You came into this world with nothing — and you will leave this world with nothing… It sounds cliche, but you only live once. You should really think about that. I would not wish this upon anyone but, people who have “near death experiences,” or those who discover they only have a few months to live, are those who learn how little money and material things really mean. They seem to live life more fully than the rest of us. They see the value in family, friends, fresh air, and a blade of grass… I challenge you to create a… Read more »

HollyP
HollyP
12 years ago

I have felt this fear from birth until about 6 months ago, when Money magazine ran an article with graphs that showed where people rank in terms of savings based upon age & income. According to Money, I am in the top 10-20% of savers for both age and income. I take this honor with a grain of salt, as these comparisons are only as good as the people you are being compared against. I think my peers have a long way to go in losing the love of things. This unbiased data helped me lose my fear that I… Read more »

drhands
drhands
12 years ago

Even those of us who know better sometimes fall into the trap of thinking “enough” money will keep us secure.

I respect Plonkee for admitting it.

The truth, of course, is it could all come crashing down – money or no money. So we had better place our faith somewhere besides our bank accounts.

Alya
Alya
12 years ago

Fear. It is nothing but pure fear. I wake up in the middle of the night worried what if…what if….

I keep looking at my account daily and spend at least 30 mins a day checking my daily expenses to make sure I do not go over my budget. I am very concious at every expense and feel a twist in my heart worried what if I loose my job? It is nothing but pure fear!

Kerstin Doe
Kerstin Doe
12 years ago

This was an interesting article, and brings up a lot of issues. When it comes to personal finance most people will no doubt conclude their behaviour is motivated by fear. Fear of getting into debt, fear of losing control of your finances. And it probably wasn’t always that way. For me it was the constant realisation that every month I had no money left over after all my outgoings that motivated me to change. But now I am micro-managing my finances. I think about it daily. I am obsessed with how much I’m spending and where I am in my… Read more »

Heidi
Heidi
12 years ago

I think it’s this fear that seperates spenders from savers. I have had customers who distrust banks and FDIC to such an extent that they literally stuff their cash in their freezers and mattresses. I saw a lot of this when I was a teller in December 1999. We actually had a customer withdraw more than $80k in cash – and there was nothing we could do to protect her once she walked out the bank doors. It’s not crazy to worry about the future, and small amounts of fear are healthy and normal. When you notice that your relationships… Read more »

Dennis
Dennis
12 years ago

This is a very good post. I have a similar situation only it’s with work. I have a fear of losing my job and what that would do to my financial life. I try to use this fear as motivation to make sure I do everything correctly at work, but sometiime I feel like it actually makes me mess up more.

Money Blue Book
Money Blue Book
12 years ago

Well it all requires a sense of faith that money is a means to an end and that financially, things will be alright. There were times when I first started working that I didn’t think I’d have enough to make ends meet but I plugged through loyally and things worked out well ultimately.
-Raymond

Patrick
Patrick
12 years ago

I think a small amount of fear and caution are normal and healthy. But if you find yourself obsessing about spending small amounts of money, or whether or not the Fed will cut interest rates another quarter of a point and how that will affect your holdings… Then it might be going a little too far.

In your final statement, you wrote you don’t want to restrict your dreams beause of fear. Have you defined your dreams? Perhaps your willingness to save and live a frugal life may make it easier for you to reach your dreams?

Peachy
Peachy
12 years ago

I identified with this post except that I am happy. I don’t mind saving money, and if I want to buy something I do, I just don’t really have the desire to amass STUFF. I am planning a trip to Alaska in 2009, and I will pay for it all as soon as the bill comes in. There is no way that I could live today as if I had five years to live, because after that 5 years, I’m still alive and then have no money. I do have a fear of being poor, and it is completely irrational… Read more »

TosaJen
TosaJen
12 years ago

When DH and I were living paycheck-to-paycheck, I was anxious and feared for the future, because we both worked in industries that tended to have layoffs regularly. We didn’t take many financial or career risks, even when they were opportunities, because we didn’t have anything to fall back on. And DH got laid off, and my worst fears were temporarily realized. We saw the light, and decided to set up our lives so that we reduced our vulnerability to income and expense changes — saving money, reducing expenses, and investing. Interestingly, once we got beyond the point of living paycheck-to-paycheck,… Read more »

MoneyChangesThings
MoneyChangesThings
12 years ago

Plonkee, you have named things lots of people feel, and naming them helps to tame them. As my age and financial security have increased, I have worked hard at not escalating my life style, already perfectly comfortable. What has gone up is my sense of security. I tend to be anxious and beat myself up if I make an error. I also get very wound up traveling, and worrying if I have the departure time right and if I might miss a plane. One of the great luxuries of financial security is, in my opinion, knowing if you make a… Read more »

Aaron Pinkston
Aaron Pinkston
12 years ago

Nice post Plonkee. I thought the part about modern money was interesting because even when we were on the gold standard, or silver depending on your country, money wasn’t “real”. These precious metals trade in their own secondary market where the value is arbitrary. I think the readers of GRS would be the first ones to point out that gold and silver have little intrinsic value, especially in an economic crisis. In the end, our value has always been a socially constructed value, and that value will constantly change. We have to get used to it. My desire for increased… Read more »

Rick Francis
Rick Francis
12 years ago

Plonkee Drhands is right- no matter how much we have saved there is still the possibility of ruin. I would suggest hedging against it with an appropriate amount of insurance and then remind yourself that your prudent actions are protecting yourself! If you constantly live in fear of ruin you are guarantying yourself less happiness! Also, I think ruin seems an unlikely possibility given you already have good money habits! Ideally we should all act from positive motivations. For example setting sensible goals and taking pride in achieving them knowing you are taking wise actions for your future. I would… Read more »

escapee
escapee
12 years ago

I am almost 100% driven by fear as well when it comes to money. It certainly has its benefits. I have been so scared of not having a home and not having any money that I save compulsively and even paid off my mortgage. It also has drawbacks- it makes me extremely fearful about cutting off my supply of money even when it’s clearly in my own best interests.

Justin
Justin
12 years ago

I’m not quite THIS bad. I do worry about money, but not incessantly. I am always comforted by the fact that I can “make” up to an extra (20% – taxes) of my paycheck by reducing my 401k. But I do share the problem with spending large sums. When I decided on my new phone ($250), after a couple months of research, it still took me 2 months to actually go BUY it. I knew I wanted it; I knew I could afford it. I just had issues with spending the money. Now I’m looking at buying a house. Talk… Read more »

Cheryl
Cheryl
12 years ago

I have always had a healthy fear of poverty. I grew up surrounded by it, living on social security with my mentally ill mother after my father died when I was 12. We were unusual in that we did own a home, but I remember how difficult it was for her to come up with the money for property tax payments. When I was 16, I left for college and paid for it myself with loans, scholarships, and part-time jobs. Later in life, when I found I was able to earn a good living, I never forgot what it was… Read more »

plonkee
plonkee
12 years ago

I think there are good sides and bad sides to realising I’m really not the only person that feels like this. In my case, I think it’s not helped by my fiercely guarded independence. @3. Jon Morrow: I agree completely that it would be better to try and get rid of the fear rather than pander to it. @14. Money Blue Book: I think you’re right that perseverance will help. I do try to keep plugging away with savings and investments, and having fun. @21. Justin: One of issues I have is not being able to afford to retire, so… Read more »

Fecundity
Fecundity
12 years ago

[…]Plonkee of Plonkee Money wrote a guest post on Get Rich Slowly about her money fears. She wonders how healthy […]

JenK
JenK
12 years ago

“I am comfortable with the realization that in some sense, modern money isn’t real and it doesn’t exist. Money has no intrinsic value, and isn’t sought for its own sake.” I don’t think it’s ever been “real”. 🙂 What makes money useful is as something enough people agree on for exchanges to be useful. Instead of having to find someone with hamburger who wants web design, I can get money from someone who wants web design and give money to the person with hamburger. And yes, money can represent security. So can having canned or frozen food on hand, or… Read more »

Mrs. Micah
Mrs. Micah
12 years ago

Good post, plonkee–not rubbish at all.

I feel some of the same things, especially with our job situation the way it is. Not the healthiest attitude, but not immediately paralyzing to either of us, I hope.

P.S. It amuses me that people might have a different idea about how banks (should) work–that they think the banks keep all that money holed up in their vault. I suppose it’s sad that they don’t know, but it’s also an interesting picture of the world. One wonders where they think interest comes from, for example.

The Financial Philosopher
The Financial Philosopher
12 years ago

Cheryl: I would like to clarify my “live as if you have five years to live” statement since you perceived it precisely opposite of its intention: If we truly understand the value of life, then the value of money is greatly diminished — as it should be… Personally, I do not know where I “rank” in terms of savings at my age. It does not matter. But, since I understand the value of life and the value of money, I know that I am already “rich” because my idea of “rich” has very little to do with money. If it… Read more »

drhands
drhands
12 years ago

“And yes, money can represent security…When I [go] out to catch the bus, my backpack contains the following “security” items: bus schedules (forgetfulness) inhaler (exercise-induced asthma) cellphone (can call for help, call to say I?m late, etc) umbrella (rain) hat & gloves (cold) sunblock (sunburn) a small first aid kit (headache, blisters, accidental nicks from blackberry vines, etc) full water bottle (thirst) luna bar (hunger) book (boredom) ipod (boredom) comb (wind)” _____________ But none of those things in the backpack are going to keep you secure if the bus runs over you. 🙂 My point is money can be useful… Read more »

Dave Farquhar
Dave Farquhar
12 years ago

I think “fear” is a strong word for it. Call it fear, or call it preparation for the unexpected, but whatever you want to call it, it’s the driving force behind the way I use money. I can’t control what I make next year. I can’t control what things will cost next year. I can’t control what will break next and cost me money to fix. What I CAN control is what I spend today and how much I have left over at the end of every month, and I can predict with reasonable accuracy how quickly the money I… Read more »

John Forman
John Forman
12 years ago

One could actually make the argument that saving “money” is a dangerous thing. What we know as money, be it paper or digital, is nothing more than a construct which represents something else – as noted. What happens if at some point in the future that changes? The whole system is based on faith in the ability to convert money into something else. If that goes away, what are we left with? Nothing. I could thus be argued that investing in things of value is better than just having money.

Ms.RipeMango
Ms.RipeMango
12 years ago

A lot has been said already, but I often feel like most of my life is based on fear. Earlier this year, I started a new job and was constantly in fear that they’d let me go even though I am working my butt off to prove myself. After a couple of reviews I feel more confident but that nagging feeling isn’t completely gone. I’m in constant fear that my husband will die, or I will die and then the other will be left in a world of hurt in many ways. I know it’s irrational, and life is meant… Read more »

guinness416
guinness416
12 years ago

Hey plonkee, I think is the best post I’ve read by you, mostly because like some others I recognize some of myself in the subject. Good comments too by Patrick & The Financial Philosopher et al. Great discussion all!

plonkee
plonkee
12 years ago

Thank you very much guinness416.

I’ve really appreciated everyone’s comments, it seems as if I’ve struck a chord with a few people.

jack
jack
12 years ago

Wow good post. When I was younger I dont think that I had much fear at all. I could live in a bus and each canned food every night and I did. But man the moment I had my first kid, who is now two, things changed. Steady job, life insurance, 401k and yes Anxiety. Funny thing is that I didnt worry when I was younger but I got myself in a lot of debt. I worry now when I am older and I am getting myself out of debt and more financially secure. So fear has been a motivator… Read more »

JenK
JenK
12 years ago

drhands noted that the “security” items in the backpack won’t help if the bus runs over me. (Of course, in that case, nothing short of a trauma medic with full kit would help – and if I’d had one with me she’d probably ALSO be under the bus!) I did put “security” in quotes because, really, a lot of that stuff is similar to a security blanket. It makes you feel ready even if has little practical use. OTOH, Linus’ blanket did keep him warm. And the moleskin did keep my blister from getting worse. No, there is no security… Read more »

vh
vh
12 years ago

True, there’s no security in life. My parents scrimped and saved and lived like misers all their married life, so they could retire relatively young. And they did that. My mother died before she was old enough for Medicare. Sometimes I wonder if all that tight living and hard physical work was worth it. My mother had to do without a lot of things–we lived in an American camp overseas, where most people bought beautiful furniture in Scandinavia and Western Europe and had it shipped in on the company’s dime. Our house was furnished with green-painted metal company furniture, second-hand… Read more »

Lazy Man
Lazy Man
12 years ago

I’m very much motivated by the fear. I’ve seen how a lack of money has impacted other people in my life. The results haven’t been good.

Ryan S.
Ryan S.
12 years ago

I’m considering a job move myself right now, and almost unquestionably any move I make will result in my taking a pay cut. It’s clear my behavior is evidence of my worry, because I haven’t even finished my holiday shopping yet, and it’s typically over by American Thanksgiving!

Minimum Wage
Minimum Wage
12 years ago

In this country, many states have programs to defer property tax for poor homeowners. The taxes are paid after the homeowner dies and the property is inherited or sold.

So a homeowner living on Social Security usuallt gets to stay in the home without worrying about property taxes.

Not only does a poor renter on Social Security get NO such protection, in most states, prop taxes are higher on rental property than on owner-occ homes of equal value.

Is this a great country or what?

Claire
Claire
12 years ago

There are several ways to look at this. When you are self-employed it does trigger some of your fears about the future, but once you start DOING and less thinking, then you won’t feel that as strongly. It’s a matter of building confidence and trust in yourself. Secondly, when you are self-employed and you are actually earning money (proof is in the pudding!), it becomes a psychological shift that probably 90% of people on this planet haven’t made yet. It proves to you that you really do create your own reality and that you had a bigger influence in your… Read more »

Peter
Peter
12 years ago

Plonkee, You are not alone in feeling this way. I’ve never been sure if it’s the feeling of loss of options, fear of assumption of debt, or knowing how much effort it took to earn/save the money, but putting out a downpayment for a house or car, or even a large purchase like a refrigerator just depresses the hell out of me. It doesn’t matter how good the deal is, I think I could have done better and somehow feel ripped off and vulnerable without that extra money to cover the “what ifs” that life might, and has, offered up.… Read more »

RJ
RJ
12 years ago

Many emotions and ideas underlie my money habits, but I strongly identify with the concerns of your article nonetheless. I have a distaste for clutter, and I have philosophical issues with those who see shopping as a hobby or as “retail therapy.” I also seek happiness in spending money on activities that mean something to me, or that help me grow: travel, cooking, etc. However, fear does play a large role in my overall handling of money. My income isn’t exorbitant, but it’s comfortably middle-class. I have pretty good benefits from my job, including good health coverage and a pension… Read more »

Gloria
Gloria
12 years ago

I agree with Financial Philosopher here. Sure, fear is what makes some of us horde money. It’s rational. Anything can happen to you, and the things that happens to you might not kill you so you will still need money while you’re alive and kicking. It’s worse to be living and living in poverty. Fear is healthy to a degree. However, aversion to spending even on something you need is a worrying sign. It’s a sign that perhaps the fear and the money is ruling your life too much. What is the use of having that money if you just… Read more »

rstlne
rstlne
12 years ago

Personally, I don’t feel secure without at least some gold and silver because precious metals have a longer history of preserving wealth than any fiat currency and aren’t under the control of a central bank that is institutionally biased towards inflationary policies, but that’s an entirely different topic.

It’s healthy to have a bit of worry about your finances. It keeps you from going wild and splurging it all. The important thing is finding a balance between saving for the future and living in the now. It’s a very difficult problem and I haven’t found that balance myself.

David
David
12 years ago

It’s important to note that there is a bit of an inaccuracy in saying that banks loan out the money you deposit. In reality, they are allowed to create, in the form of loans, 10 times the money that is on deposit. That’s right, they collect interest on money they create. Furthermore, all money that exists is actually created by a loan. It starts from the top at the Federal Reserve. The Federal Reserve Act grants all banks the power to print money. This is a subtle detail that the “how money works” article you linked to doesn’t mention clearly.… Read more »

thesetruths
thesetruths
10 years ago

This is like going deeper down the rabbit hole. Plonkee wrote an excellent portrayal of her irrational fears around money, and how it undermines her confidence. Others have stated that they wake in the night even after having saved and created what they thought was financial security. Others have advised actually insuring their savings??!!?? Thus spending in order to save? How about it being healthy to worry and have fears about what “might” happen one day…why get up at all? Money does not need to be saved and there is no security that it can create. I have never “saved”… Read more »

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