The Fear of Debt & Ways to Curb It

40% of Americans are more afraid of credit card debt than the coronavirus –Wallethub, Halloween Spending & Financial Fears Survey 

Halloween has officially ended but Americans fear of debt is still in full effect (and I’m still watching reruns of Hocus Pocus so let’s be honest, it’s still the season).  I’ve always been so aware of how emotional money is for us. We often think of it as something analytical, focused on the numbers. However, the way we manage money is much more emotional. Debt has been shown to be a trigger for stress, anxiety, fear and depression. While fear of debt can be a natural reaction to our financial circumstances, it can also be one that hampers our ability to achieve our financial goals. Fear often paralyzes us, keeping us embroiled in negative thought patterns and discouraging us from taking action. That’s why I want to share a few common debt fears and some helpful tips for facing the fear and building financial health.  

Nearly a third of Americans cite fear of losing their job as a key source of financial anxiety. In our current economy, with rampant unemployment due to the coronavirus, this fear is present for many of us. 3 ways to curb the anxiety:  

1. Recession-proof your career-this blog has great tips to make sure you are prepared if you do lose your job. 
2. Diversify your income-find some COVID friendly side hustles here.  
3. Tap into local resources- there are so many resources out there if you do lose your job. Don’t be afraid/ashamed to utilize the resources that exist for you.  

Credit card debt continues to top the list of debt fears for individuals. We’ve heard the horror stories and it’s easy to see how quickly interest rates and fees can add up to something that feels insurmountable. 3 ways to alleviate the concern:  

1. Stay engaged with your debt (review those statements every month) and be proactive when you are facing a hardship.  
2. Say goodbye to the shame. When it comes to actually solving our financial problems, shame is right there alongside fear—keeping us stuck. Be open, ask for advice, ask for help. This blog has some great tips on how to prepare your family for a credit crisis.  
3. Take action now. Interest and fees can add up quick. If you are feeling the pinch, don’t wait to explore your debt management options.  

25% of Americans fear they aren’t saving enough for retirement. We all envision a future where we can travel, relax and savor moments with our families. The fear that we aren’t saving enough to make that happen can be powerful and pervasive.  3 Ways to calm the worry:  

1. Know how much you need. 61% of people don’t know how much they’ll need to retire, that lack of knowledge breeds fear. Check out these benchmarks now to get an idea.  
2. Start small but start today. If your employer offers a 401K, find out how to enroll and start with a small contribution. If not, look into an IRA with your financial institution (the initial deposit may be high but you can save in a regular savings account until you get to that mark). Compound interest is your friend!  
3. Automate your savings. My teammate Jim will tell you why in this article.  

 “Thinking will not overcome fear but action will.” -Clement Stone 

 It’s so easy for our thoughts to spiral into negativity and fear (especially in a year like 2020) and it’s certainly a natural inclination to avoid the things (like debt) that create that spiral. BUT, what do you know, the only way to really stop the spiral is to do something. Today, make a commitment to doing one thing to face your debt fear. It doesn’t have to be something monumental. Open that credit card statement you’ve been avoiding, pay off a low balance collection account, make a debt management plan. Do one thing. Don’t know what to do? No worries, you don’t have to face your debt fear alone. If you want some support—connect with Apprisen to review your debt and get a free financial action plan.