Money is a powerful force in our lives. It gives us the means to achieve our goals, fulfill our dreams, and provide for ourselves and our loved ones.
Yet, for many of us, the fear of running out of money is a constant source of anxiety and stress. We worry about not having enough to cover our bills, save for the future, or cope with unexpected expenses. This fear can be paralyzing, preventing us from making sound financial decisions, taking risks, or pursuing our passions.
In this blog post, Why Do I Fear Running Out of Money, we’ll explore the underlying causes of the fear of running out of money and offer practical tips and strategies to help you overcome it. Whether you’re a seasoned investor or just starting your financial journey, this guide will provide valuable insights to help you live with confidence and financial freedom.
Understanding Your Fear of money
The fear of running out of money is a fear that many of us share. It can be a paralyzing fear that keeps us from taking the steps necessary to achieve financial security. But it’s important to understand why this fear exists and what it is that we’re afraid of.
The fear of running out of money can stem from a variety of sources, including a lack of control over our finances, the fear of not being able to make ends meet, or even the fear of not having enough to retire comfortably. It’s important to recognize and understand the source of your fear in order to begin to address it.
To conquer your fear of running out of money, it’s essential to understand its root causes.
For many people, the fear is linked to a sense of insecurity, a lack of control, or a belief that they are not good enough.
These feelings may stem from past experiences of financial hardship, a sense of scarcity in childhood, or societal pressures to succeed and accumulate wealth. Identifying these underlying emotions and beliefs and challenging them with positive affirmations, self-compassion, and a growth mindset is important.
By acknowledging and working through your fears, you can develop a healthier relationship with money and take proactive steps to secure your financial future.
What Causes Financial Anxiety?
Many factors can contribute to financial anxiety.
These can include a lack of financial knowledge, a lack of financial planning, a lack of financial literacy, or even a fear of the unknown. All of these can contribute to a fear of running out of money.
Some of the most common causes of financial fear include
- Insecurity: Many people fear running out of money because they feel insecure about their financial situation. They worry about not having enough to cover their basic needs, pay bills, or save for the future.
- Lack of Control: Others fear money because they feel like they have no control over their financial situation. They may have experienced financial setbacks in the past, such as job loss or unexpected expenses, and feel helpless to prevent them from happening again.
- Scarcity Mindset: Some people have a scarcity mindset, which means they believe a limited amount of money and resources are available. They worry that there won’t be enough to go around, which can lead to feelings of anxiety and stress.
- Social Pressures: Many people feel pressure from society to succeed and accumulate wealth. They may worry that they won’t meet others’ expectations or feel they need to keep up with the Joneses.
- Personal Beliefs: Finally, some people fear money because of their personal beliefs about it. They may believe that money is evil or that it’s not important, which can create a mental block that prevents them from taking proactive steps to improve their financial situation.
In addition, the current economic climate can also contribute to financial anxiety.
With the stock market in flux, the cost of living increasing, and the job market changing, it can be difficult to have a sense of financial security.
This can make the fear of running out of money even more daunting.
Setting Financial Goals
Setting financial goals is the first step in overcoming the fear of running out of money.
A clear understanding of your financial goals can help you stay on track and make informed decisions.
Start by determining your short-term and long-term financial goals or at least your best guesses.
What do you want to achieve in the next five years?
What do you want to achieve in the next ten years?
Setting goals can help you focus on the bigger picture and stay motivated.
The important thing to remember with financial goals is what do you want to do with the money. Travel, learn new skills, support friends, family or good causes? Your money needs to have a purpose more than just growing.
Once you have your goals in place, you can begin to create a plan to achieve them. This plan should include budgeting, saving, and investing.
How to Create a Budget
Creating a budget is the key to achieving financial security. A budget will help you track your income and expenses and ensure you live within your means.
When creating a budget, it’s important to be realistic. This means looking honestly at your income and expenses and ensuring you are not spending more than you can afford. You should also make sure to include any unexpected or variable expenses that may come up.
You could try the Japanese budgeting system called kakeibo
Kakeibo is a Japanese budgeting system that emphasizes mindfulness, simplicity, and frugality.
It’s designed to help people become more aware of their spending habits, prioritize their values, and save money.
To use kakeibo, start by setting a monthly budget and tracking all your expenses in a notebook or journal.
At the end of each day, record all your purchases and categorize them into four categories: needs, wants, savings, and miscellaneous.
Then, reflect on your spending and identify areas where you can cut back or make changes.
Finally, set goals for the next month based on your values and priorities.
The goal of kakeibo is to be more intentional and mindful about your spending, so you can live within your means, save money, and achieve your financial goals.
Once you’ve created your budget, stick to it. Track your spending and make sure that you are not overspending. This will help you remain financially secure and on track to achieving your goals.
Building a Healthy Relationship with Money
It’s important to remember that money is just a tool. It can be used to do great things but can also be a source of stress and anxiety if not managed properly.
In order to have a healthy relationship with money, it’s essential to understand your values and priorities.
Ask yourself what is important to you and how you want to use your money.
This will help you make informed decisions about how to use your money and ensure that you spend it in ways that align with your values.
It’s also important to take a long-term view of money. Don’t forget to save for the future and invest for retirement.
Building a healthy relationship with money can help you achieve financial security and peace of mind now and for the future.
The Benefits of Saving
Saving is an important part of achieving financial security. Having a savings account can provide a cushion in case of unexpected expenses or a sudden loss of income.
Having an emergency fund is especially important. This fund should be used for unexpected expenses or emergencies, not everyday expenses. This fund can provide peace of mind that an unforeseen expense won’t catch you off guard.
In addition to an emergency fund, saving for retirement is also important. A retirement account can provide financial security in your later years and ensure you have enough money to enjoy life after work.
Many of us have access to a work-based pension which is a form of forced savings for our later life and it often includes FREE money offered by your employer as a bonus.
The Power of Investing
Investing is another important part of achieving financial security. Investing can help you grow your wealth and provide financial security in the long term.
When investing, it’s important to understand the risks associated with different investments.
Investing in the stock market can be risky, so it’s important to do your research and understand the risks before investing. And also remember that NOT investing is risky and almost guaranteed to turn out bad in the long term.
Investing in low cost globally diversified index funds which include thousands of companies is a great way to start. It will give you exposure to the world’s great companies, great diversification across companies, sectors and countries.
Investing is a long-term process. Keep an eye on your investments and make sure that they are performing as expected. Investing can help you achieve financial security, but it’s important to be patient and understand the risks involved, especially understanding the difference between short-term volatility and permanent loss.
The stock market goes up and down, down and up in the short term but in the long term has always made money.
Automating Your Finances
Automating your finances is another great way to stay on top of your finances and achieve financial security.
Automation can help you save time and effort and ensure that you are always on track to achieving your financial goals.
Automation can be used to pay bills, transfer money, and even invest.
By automating these processes, you can ensure that you are always on track to achieving your financial goals.
How to Deal with Unforeseen Expenses
No matter how much you plan and budget, unforeseen expenses always come up. It’s important to have a plan in place to deal with these expenses and not let them derail your financial goals.
The best way to deal with unforeseen expenses is to have an emergency fund.
This fund should be used only for unexpected expenses and should not be used to pay for everyday expenses. Having an emergency fund can help you stay on track to achieving your financial goals and provide peace of mind in case of an unforeseen expense.
FAQ: fear of running out of money
How do I stop worrying about running out of money?
Worrying about money is a normal part of life, but it’s important to remember that taking steps to manage your financial situation is possible.
One way to do this is to create a budget and track your spending. This will help you identify areas where you can save, and make sure that you prioritise your spending in the areas that are most important to you.
Another helpful strategy is to have an emergency fund. This can provide you with a cushion to fall back on in case of an unexpected expense.
Finally, it’s important to focus on the positive aspects of your financial situation rather than fixating on the negative. Having a realistic appreciation for what you have and what you can achieve can be a great way to manage your worries about money.
What is the fear of running out of money called?
The fear of running out of money is commonly known as “economic anxiety”.
It is a form of anxiety disorder that can significantly affect a person’s mental and physical wellbeing.
People who suffer from economic anxiety often worry about their financial security and how they will be able to keep up with their payment obligations.
Symptoms can include difficulty sleeping, irritability, and feeling overwhelmed.
It is important to address this issue in order to find ways to manage the anxiety and reduce the risk of running out of money
What is the fear of overspending?
The fear of overspending is known as “compulsive buying disorder”. It is a psychological disorder that involves an urge to purchase items beyond one’s needs or financial means.
People with this disorder often buy items they don’t need, even when they can’t afford them.
Symptoms can include a persistent urge to shop, preoccupation with shopping, and a reliance on shopping to boost mood.
People with compulsive buying disorders may feel guilt or shame after shopping.
Treatment usually involves cognitive-behavioural therapy and medication, as well as self-help strategies such as budgeting and limiting access to credit cards
Conclusion: Why do I fear running out of money
The fear of running out of money is common, but it doesn’t have to be. With a few simple steps, you can take control of your finances and become financially secure.
Setting financial goals, creating a budget, building a healthy relationship with money, saving, and investing are all important steps to achieving financial security.
Automating your finances can also help you stay on track to achieving your goals.
Finally, having an emergency fund in place can help you deal with unforeseen expenses and ensure that you remain on track to achieving financial security.
No matter your financial goals, the fear of running out of money doesn’t have to stand in your way. With the right tools and strategies, you can take control of your finances and become financially secure.
Your financial ally
If you’re struggling with the fear of running out of money, don’t let it control your life.
Working with a financial coach and planning can help you gain clarity, confidence, and control over your finances.
A financial coach can work with you to develop a personalized plan to achieve your financial goals, overcome limiting beliefs, and create a sustainable financial future.
Take the first step today by setting up a call with us today.
Remember, with the right tools and support; you can conquer your fears and live the life you deserve