Unlocking Financial Wellbeing: Face Your Fears and Boost Your Savings

July 21, 2023

In the world of personal finance, fear often plays a significant role, hindering progress and oftentimes causing stress among consumers. A recent study by Bankrate ¹ found 82% of adults in the U.S. who say money negatively impacts their mental health said it was caused by factors in the economy. In this current economic environment, consumers are dealing with inflation, high-interest rates, and the potential for a recession which all can cause an increased sense of fear and stress..

Some of the common fears’ consumers experience include worrying about living paycheck to paycheck, falling into debt, or outliving their savings. However, you can turn fear into action and uncertainty into assurance. Here are some common financial fears and actionable tips for maintaining financial wellbeing and building savings. 

Living Paycheck to Paycheck

This fear often arises when income barely covers expenses, which can leave you with no room for savings. You can combat this issue by designing a detailed budget to understand where your money is going and mapping out a plan to better allocate your income. If you are worried about living paycheck to paycheck, consider picking up a side hustle if you have the time. A side hustle could help you bring in some additional income and allow for the possibility of creating your own schedule and doing something you are passionate about. Obviously no two financial situations are the same, so be sure to do your research, better understand your financial situation and come up with a plan catered to your goals.

Financial Emergencies

Unexpected events such as a medical emergency or sudden job loss are common financial fears for all consumers. An emergency fund, ideally storing 3-6 months' worth of living expenses, can be your safety net to help combat this fear. Regular contributions, even small ones, to this fund can give you confidence and security in the face of unforeseen circumstances. A great way to jumpstart your emergency fund could be with the award winning SmartStart savings account ² from Affinity. You can earn 4.00% Annual Percentage Yield on your first $10,000 in savings, with no minimum balance requirement or minimum opening deposit.

Outliving Savings

This fear is prevalent, especially as the cost-of-living increases and inflation remains high. The prospect of having insufficient funds during your retirement years can be daunting, and it may impact your wellbeing in many different ways. Start planning early and consider investing a portion of your savings in high-yield accounts or other investment vehicles that could potentially offer higher returns. Affinity offers a free consultation with a member of our investment services team, where you can meet with a professional and plan for a worry-free retirement while meeting your goals. Additionally, whenever you receive a raise, instead of upgrading your lifestyle, channel a part of it into your savings. This practice can significantly grow your savings over time.

Falling into Debt

The prospect of falling into a financial black hole of debt can be terrifying. To keep this fear at bay, ensure you are making timely payments to avoid late fees and higher interest charges. Leverage automated payments and transfers, so you're less likely to miss a payment. Automating your savings can be beneficial, as well. A predefined amount transferred from your checking to your savings account each week or month can accumulate into a substantial amount over time.

It's important to remember that knowledge is power. Understanding these fears, facing them, and turning them into actionable saving strategies is a form of self-empowerment that leads to greater financial security and wellbeing. At Affinity, we're dedicated to helping you conquer these fears. With a wide array of resources and experienced team members, we offer guidance and tools to help navigate your financial journey.

This information is for informational purposes only, is intended to provide general guidance, and does not constitute legal, tax, or financial advice. Each person’s circumstances are different and may not apply to the specific information provided. You should seek the advice of a financial professional, tax consultant, and/or legal counsel to discuss your specific needs before making any financial or other commitments regarding the matters related to your condition.