Today is Face Your Fears Day, and while the things we fear may vary greatly from one person to the next, in this time of global uncertainty it is little wonder that financial fears are in the minds of many Australians.
Fear is a natural response to a threat and has the ability to invoke one of two responses. The fight response triggers a drive to act, to solve the problem, tackling it head on. The flight response causes us to retreat, in a desire to escape. When dealing with finances, flight is often a luxury we can’t afford so it becomes vital to learn how to face up to and deal with the financial fears that consume us.
Identifying your fears
Financial worries can become not only consuming but generalised, leading us to adopt a fearful attitude in other areas. The first step is identifying exactly what is concerning us. This in itself can be a daunting task, however when we understand that this tendency to avoid is part of the fear itself then we can become more driven to make a change. The 2012 RaboDirect National Savings and Debt Barometer has highlighted a variety of areas concerning Australians, which include:
1. Managing mortgage repayments
A roof over our heads is perhaps the most basic of our needs. And while a large number of people are struggling to even break into the market, it seems for those who have secured a home, mortgage repayments are an ongoing worry. 30 per cent of boomers expect to retire with a mortgage, so clearly it is an enduring concern for many.
2. Credit cards, bills and necessities
There is no doubt that credit cards offer financial convenience. However, when used as a go-to in times of hardship, it is easy for repayments to become overwhelming. Add to this rising utility bills and the findings that 46 per cent of working Australians report having only four weeks’ worth of wages accumulated, it is not surprising that fear associated with daily expenses is on the increase.
3. Caring for dependants
In the past, it was not uncommon for parents to aid their children in financial ventures, and while the sentiment remains with 53 per cent wanting to assist their Gen Y kids, only 20 per cent could foresee themselves being able to do so. In addition to our growing ageing population, the sense of dependence among Australians is no doubt contributing to financial woes.
4. Retirement and superannuation
While retirement should be a time of leisure and reflection, it seems financial worries continue to be felt, with 41 per cent of those retiring with a mortgage expecting to pay it off by selling their property.
5. Overall fear of economic hardship
Perhaps one of the worst factors of financial fear is the lack of control that is felt. In addition to the specific fears, an overall worry that the economy is bound to worsen in the next 12 months has been felt by 62 per cent of boomers.
The next step is to set realistic goals, specific to your situation. Making rational, not emotional, decisions and enlisting the help of qualified people will get you closer to your goal. Aim to use the fear as a driving force and, rather than seeing yourself moving away from the fear, think of yourself as moving towards a concrete goal.
We also have a tendency to hide our financial fears, but in reality most of us have them so don’t be afraid to ask for help and endeavour to educate yourself on your situation.