How to Banish Your Personal Finance Fears

By Kevin Brauer, Chief Financial Officer

Halloween has traditionally been known as a “scary” time of year meant for tricks and ghouls, but it’s morphed into a fun celebration with costumes and candy. Want to know what’s really scary for men and women of all ages? Talking about personal finance.

Fun image of a piggy bank in a witch costume

Learning the ropes of saving money, understanding your credit score, and battling identity theft can be intimidating, but it doesn’t have to be. There are some simple first steps you can take to banish your personal finance fears once and for all (and maybe save some extra cash for candy). 

Fear #1: I’ll never understand things like APR, FICO® Scores, * dividends, and other financial terms.

It’s normal to fear the unknown, but you must have a basic knowledge of financial terms to stay financially fit. Although there are plenty of resources available for self-education, you don’t have to navigate new territories alone. Find a financial institution that offers classes and training, like Affinity’s financial wellness events, and plan these classes in your day-to-day schedule so you make the necessary time for them. Before you know it, you’ll recognize personal finance terms like the back of your hand!

Fear #2: Someone dressed up as me!

Identity theft has never been a bigger threat, but the first line of defense is you. Secure banking goes a long way (and you should make sure your financial institution has proper cybersecurity services in place), but you’d be surprised how often consumers are their own worst enemies. Are you guilty of sharing your passwords with friends and family? Do you ever share sensitive information via text or email? Do you use the same password for every log-in? If you answered yes for one or more of those questions, you must be more vigilant with your personal information.

Fear #3: An unexpected expense has me drowning in debt.

None of us are fortune tellers, but it’s better to plan for home or car repairs, healthcare bills, or even losing your job. However, emergency funds should be treated separately from other checking and savings accounts. Emergencies shouldn’t completely drain your finances, so having multiple cash reserves will help you comfortably manage surprise expenses while still saving for longer-term goals like a vacation or retirement.

Fear #4: I’ll always live paycheck to paycheck.

If you’re tired of this lifestyle, you need to make time for financial planning. Just like financial education, scheduling time for financial planning will help you prioritize it. Cutting even one hour per week from internet surfing and Netflix binging to dedicate to financial planning can make all the difference. Ask yourself: What are your goals? What are your recurring expenses? Where can you cut back? Then, commit to regularly setting aside even a small amount of money per month. You can easily turn $10 per month into $120 for the year (or more if you’re using a deposit account that collects interest). If you’re unsure where to start, schedule a planning session with your financial institution to get the ball rolling.

Fear #5: My credit card statement has snowballed out of control.

Stop swiping – and therefore spending – blindly! Creating a budget (and more importantly, sticking to it) will help avoid impulse purchases and set a limit for what you can spend per day, month, and week. Also, larger purchases shouldn’t be financed by debt – they should be financed by advanced saving. For example, if you’re eager for a new flat screen TV before basketball season begins, start saving for it instead of throwing it on your credit card and paying it back later. The latter is the easiest way to lose control of your spending and credit. When you cannot save in advance (for larger purchases like a car or home, for example), understand your loan options for a payment plan suitable for your income and lifestyle.

The road to financial wellness doesn’t have to be long and scary – you have the power and control to build prosperity. The key is overcoming your fears and taking the initial steps to improve your education and build healthy financial habits.

    • FICO is a registered trademark of Fair Isaac Corporation in the United States and other countries.

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