Huge Financial Fears and How to Cope, Part 1

It runs through your mind at night like a scary movie. It’s those frightening financial fears that so many of us worry about daily. Some of these fears are caused by a thing as simple as student loan debt or it may be as complicated as dealing with a health issue and how that can affect your work, income, and spending. I don’t want to paint a picture of doom and gloom here but being a realist I have been in the position of worrying about money, so I understand what it is like. So what can we do about that? The worries and fears we have are in some ways a self-fulfilling prophecy.

Financial fears can fill your life with worry and misery. But rather than worrying about what might happen, here's how to do something about it.

Worries and fears about money and financial problems can have a terrible impact on you. It is debilitating to spend hours of time thinking and ruminating. It can affect the way you function and perform at your job and it can cause you to lose sleep at night. Even personal relationships are disrupted.  All of those things can actually make your situation worse and possibly expedite the very fears you have into happening.  While there are things that can and will happen to us in life, the time and energy we spend on this subject is much better when it is spent on a plan of what we can actually do to prevent our fears from ever happening or what we can do to prepare and fix them if and when they actually occur.

Do you worry about these events occurring in your life?

Financial Fear#1
What will happen to me and my family in a financial disaster?

Financial disasters occur. You see them on TV every day when you watch the news. It might be a fire in some neighborhood near you that destroys a home or a flood someplace in the south where people lose literally everything they own. They can even lose a loved one who may in fact be the daily breadwinner. These occurrences, both natural and manmade events, wreak total havoc in people’s lives.

What can you do even if you are physically unharmed, but lose everything you own in a disaster? While the sun is shining brightly in your sky and everything is fine at your house, that’s the time when you should be preparing in your mind to deal with the “What if’s”. The things you can’t control, like the weather, you cannot do anything about. What you can do is prepare for the “what if” just in case. Things like:

Do you have an emergency kit?

In case of disasters, you should have at least some basic emergency supplies on hand and a plan for your family to contact each other if you are separated. You should also consider an emergency financial first aid kit including important documents and documentation of your home and possessions for insurance purposes.

Do you have an emergency fund?

We are always talking about having a fund set up to deal with the unexpected, but so many people fail to actually do it. You should have 3-6 months of funds (enough for absolute needs) safely stashed away to deal with an immediate emergency in your life. That may be finding a place to live, renting a car, or even paying for food and clothes. Making a payment to yourself every week is the best way to accumulate emergency funds in order to have some time to get back on your feet from a disaster.

Do you have insurance?

Some might say that having an insurance policy on your home, your health, your possessions, and/or your life is a losing bet. If you collect on it you must have had a serious disaster in your life and if you never do collect, it’s money you have just wasted. Try telling that to the flood survivor or the widow after something terrible happens.

Insurance can mean the difference between coping with a financial disaster and having no future at all financially. That’s why even if you live in a small apartment, you need renter’s insurance. If you have a car, you need auto insurance. The amounts of the coverage you need relate to many specifics that only you know the answers to. That’s why pre-planning is so very important. Giving the thought to how you might deal with a difficult financial loss is always best done when you aren’t in that situation. You cannot control what will happen to you, but you can control your plan of what to do in case it does.

Financial Fear#2
What will happen if I lose my job?

Things roll right along in life when you are in a job and you actually like what you do every day. For many, that’s not reality. First of all, finding a good job for the last 10 years or so wasn’t that easy as unemployment from the recession was quite high and is only now dropping to levels that are considered normal. Secondly, many good jobs have been lost to technology, and what used to require actual people to do now may mean that just one or two do it or in the worst case scenario it may be totally automated. That may be the future of entire industries in the next 10-20 years. So what to do?

Where do you stand at work?

It’s always good to know where you stand at your job. Are you reviewed regularly and are you getting good feedback on your performance? If the answer is no to either question, you should make the effort to find out. Then, you know where you stand and what, if any, actions you need to take (like looking elsewhere or taking some courses if you need to).

How is the company itself doing?

Is it solid and secure, or is it having real difficulties that could spell the end for you and others? You should know if cutbacks are on the horizon and if you could face a pink slip through no fault of your own. Knowing that ahead of time means you can “prepare and replace” to coin a phrase.

Have you improved your skills and made yourself invaluable?

This is a surefire way to earn more and have job security. First, read and learn and immerse yourself in education to update your skillset. It will be noticed and rewarded. Second, seek out new responsibilities at work and make yourself a problem solver and not part of any problems. No matter what actually happens, the new skills will go with you wherever you may be.

Have you diversified your income?

Your primary job may not be the only way to earn money. Whether you develop a side hustle, invest in rental properties, or freelance on the side, diversifying your income can help protect you against job loss. If it’s successful enough, it may even replace that job altogether.

Financial Fear #3
Will I lose all my money in the stock market?

The markets will go up, and they will go down. That’s a fact. Having invested for many years myself, I understand the excitement and the worries attached to investing. Do you need to invest? The answer to that is probably yes.

In many cases, your investments may be limited to your retirement plan and that’s an area you have to think about and prepare for from the very beginnings of your adult life. If you aren’t doing that, you are at risk of being unprepared for what may be a 15-30+ year chunk of your life when you can’t earn your peak salary. Things you can do:

Do you invest only what you think is an affordable risk?

Whether you want to believe me or not, investing in the markets is just like gambling, so only risk what you can afford to lose. You will probably never lose all of your money, that’s why diversifying is so very important. Allocating your money to different sectors of the markets means that if one area is declining there are probably others doing well. By diversifying, you are a bit conservative but limiting the volatility and that is a form of protecting your assets.

The markets have shown increases in every decade over the previous ones (just recently breaking the all-time records) and that is something you have to keep in mind. While we all enjoy immediate returns on our money, the market is really an investment that pays over time. Despite recessions, investors have still made lots of money.

You may need some professional help in making the best decisions. Many do it on their own, but as someone retired with low risk tolerance as I am, I seek help. Your age is a big factor on what and how and why you invest.

Financial Fear #4
What if someone steals my identity?

In the 21st century, identity theft is a real worry for almost everyone. If you use an online device, and really, who doesn’t, you are putting yourself out there on a limb that can expose you and your personal data to some bad people who would love to steal your identity, your wealth, and cause you a world of problems when they do. I have had mine stolen twice in the past two years and it was a complete hassle as someone tried to steal my savings account at an online bank. It tied up my funds for weeks and weeks but fortunately I recovered it all.

Do you protect your password information?

Do I really need to say this? Don’t use the same passwords for all of your information. Don’t make them easily predictable like your child’s name or your home address or phone number. Hackers are very sophisticated and have complicated hacking software that can figure out literally hundreds of thousands of password combinations. If you make it just too easy or you’re lazy, they will find you.

How often do you change your passwords?

Changing your info regularly will help a lot. If you need help, there are password management programs out there designed to keep your passwords secure.

Have you ever shared your passwords, account information, or personal information with others?

If you keep confidentiality, you are way ahead of the game. No one else needs your protected information so if they ask you for it, be suspicious and keep it on a need-to-know basis.

There are identify theft protection services that can help protect your information. Most have a monthly fee, but you can try some free for an introductory period. Perhaps the most frugal and safe protection is checking your own credit report on a regular basis.

On Friday in Part 2, I will detail four other financial worries that can affect you, your family, and your life. If you have fear and worries like most of us do, consider what you can do now to prepare and prevent a financial disaster in your life!

Do you have huge financial fears like many people do? What keeps you up at night?


  1. I used to have many of these fears. The ones that would often stress me out was when the unexpected happened, like a breakdown of a car or home. Today I don’t have much fear/stress of these things because we have a plan and organize our money. We communicate as a family about our finances, so when the unexpected happens we can just cover it with no stress added.

  2. Identity theft is something that I think about from time to time. I had a roommate that got his identity stolen and he had a heck of time getting things cleared up. I want to say it took years and even affected his job clearances. So it’s definitely that worries me from time to time.

    1. MSM, I never thought that anything like that would happen to me, but it did. I feel fortunate that the online bank was able to resolve it in a relatively short period of time, and noticed the hack into my account in the first place. As I said in the post, there are companies that can help prevent identity theft. It might be worthwhile to investigate it if you’re fearful of it happening.

  3. Fruclassity (Ruth)

    I know what that soul-sucking worry is like too. Every single worry listed above is alleviated by debt-repayment and savings – not solved, but lightened. My husband said to me last night, “Financial disaster!” When I asked what is was, he said he had miscalculated his income tax (he’s self-employed – lots of complicated accounting) and was short $3,500. “That’s not a disaster,” I was able to say. A few years ago, it would have been. But now, we’ve got that kind of mistake covered. No loss of sleep for us last night.

  4. Daniel Palmer

    I think Tim Ferris said that once you stop and think about a worst case scenario all the way through, you realize how it isn’t that bad. While I don’t completely agree with the statement, we do tend to blow our fears out of proportion.

    1. There’s also a phrase that says fear of the unknown is worse than fear of the known. I’m not sure who said it, but he may have been talking about wondering what might happen to us in a bad financial situation, whatever it may be. The more you examine your options, it seems the more you can deal with those issues. Thanks, Dan.

  5. These are all such real fears. We don’t have control over many things but at least we can take steps to mitigate disaster, as you point out.

    Many co-workers at my former job felt stuck. Some also felt, perhaps rightfully so, that they couldn’t find another job if they were to lose their current one. But they did nothing to improve their skills. I don’t understand that. Free courses alone, like the ones on Udemy can lead to jobs and/or side hustles.

    Looking forward to Friday’s post!

    1. It makes perfect sense to me (and obviously to you) that if you’re facing difficulty in your job, or in your finances in general, you should try to do something about it. Sitting around moaning and groaning or just being depressed will only make matters worse. Hopefully people don’t have to experience the damage before they take action. Thanks, Mrs. Groovy, for your comments.

  6. Great post, for the most part. 🙂

    I do disagree with this statement: “Whether you want to believe me or not, investing in the markets is just like gambling, so only risk what you can afford to lose.”

    While I agree that the way many people invest is more like gambling, the way investing should be done really isn’t. A diversified portfolio, like the S&P500 index, held over at least 15 years has never lost money. This is very different than gambling with your money.

    1. No doubt, Brad, that investing in mutual funds can be safer than picking particular stocks. I also would say that making knowledgeable decisions about your investments, like using an asset allocation strategy, is also a safer way to do it. But here’s my big but…nothing in the market is guaranteed or insured, so for some people like me (whose risk factor is zero these days), it’s still like gambling. It truly matters where you are in your life that determines the risk you’re willing to take. Thanks so much for your comment.

  7. Love this, Gary. So much of avoiding financial fears is doing something to protect yourself against them. I finally started to figure this out when we started saving in an emergency fund. It’s amazing how much your peace level rises when you put measures in place that will help avoid financial (and other) disasters.

  8. Ann

    Excellent list of fears and how to constructively address them, Gary! The diversification of income is something that I would like to do, but honestly am not sure where to even begin. Have tried some side ventures – nothing too big – yet nothing has been terribly profitable. It usually ends up costing me more than I earn. Guess I still need to keep looking for other options that are worthwhile and profitable.

    1. I know it’s not always easy to find a secondary source of income. I myself have tried a number of things over the years. Back in the 70’s, my wife and I sold wedding invitations from catalogs at a huge discount by advertising in the newspaper. It was moderately successful. My biggest side hustle was my career for several years at flea marketing. If you have the time to spend at least one day a week out in the sun and you have the right thing to sell, it can be very lucrative. My suggestion is to check some of the other bloggers and what they’re doing to earn extra income…you may find something that’s perfect for you, Ann. Good luck.

  9. Jax

    I know that when I have stress and anxiety over finances and debt, it lessons once I make a plan. We should all have plans to the situations you’ve listed, Gary. I haven’t thought much about identity theft, but I am going to start now.

  10. Ugh, I am definitely feeling financial fear #4 this week. I lost my wallet like 12 years ago in college and barely batted an eye – this time, I was like, dang, they could really do some damage if they put in the effort to use everything in there to actually steal my identity.

    1. It’s pretty frightening, Mel, these days with so many people out there trying to hack our identities and steal our assets. If only they would spend their time trying to do something like cure cancer, we’d all be better off! I guess one of the best defenses is to know what you need to do and how quickly you have to do it to stop any damage that can occur. Reviewing that before it happens is the best way to go. Good luck with your situation.

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