The extreme volatility of the stock market has many people concerned about the state of their current and future finances. While it’s normal to worry about your livelihood, we often get ourselves worked up about things. Here are some of the most common fears we face about money and some practical tips on what you can do.
#1: MY DEBT IS OVERWHELMING AND I SEE NO WAY OUT
We are constantly bombarded with news articles about the national debt, student loans, refinancing, rising tuition costs, credit card fraud… the list seems endless. Studies show that the emerging generation is faced with higher risks and factors for debt than those in the past (West & Friedline, 2016). Depending on the kinds of debts you have, there are different ways to start making a dent in paying them back.
For example, if you struggle with credit card debts, choose one card to start paying off first (if you’re not already). Look at personal debt consolidation. Different methods offer different benefits, so research your options (Consolidated Credit, 2018). If you have crippling student loans, learn about loan forgiveness programs. If you find that you need help in making the best choice for you, there are financial advisors who can help.
#2: MY RELATIONSHIPS WILL SUFFER BECAUSE OF MY FINANCIAL SITUATION
You may think that financial trouble leads to separation or divorce, but that’s not necessarily true. The truth is, various factors come into play when a couple decides to separate. While finances are one of them, a study showed “that all forms of heterogamy (being different) led to higher divorce rates and… heterogamy [of] age, educational attainment, and religion had the largest impact” (Lowenstein, 2005). In other words, you should be more concerned with ensuring that your beliefs and values – rather than your pocketbooks – are aligned. Finances are stressful, but a key part in navigating the financial strain involved in a relationship is to have open and honest communication.
#3: HOW CAN I AFFORD TO RETIRE?
It’s hard to think about a retirement fund if you’re facing substantial debt or if your employer doesn’t offer a 401K. But the reality is, there will come a time when you will need it, so the sooner you plan for retirement, the better prepared you will be. Don’t play the “if-only” game if you’re a little late to the saving-for-retirement party and understand that no matter when you start, the important thing is that you START. If you do work at a full-time job that offers benefits, ask about company contributions and matching policies and take advantage of those benefits. It may seem like a sacrifice, but it adds up. If you don’t have access to 401(k) benefits, look into special savings accounts that offer higher interest than a traditional savings account. Start by saving small amounts to get into the habit of saving and save more when you can. Even if you haven’t saved an astronomical amount, the peace of mind you’ll get from having even a little bit put away for a rainy day is priceless.
#4: HAVING KIDS WILL RUIN MY CAREER AND THUS MY FINANCIAL INDEPENDENCE
This is a concern for women who know they want to have children but are in the middle of building careers or advancing their education. It’s a hard place to be in when you feel like you have to choose between two important desires, but the truth is, you don’t have to sacrifice one for the other. There are so many options regarding childcare and remote employment. While having children will add its own set of difficulties, your financial independence doesn’t have to be at risk.
#5: I DON’T KNOW ANYTHING ABOUT INVESTMENTS
It’s easy to feel like you have to know everything about stocks and investments and hedge funds and the myriad of other economic jargon we hear from day to day. The truth is, while it’s empowering to know as much as you can about the economy you don’t have to know everything. In fact, you can know very little and still feel at ease about your finances. If you want to dip into investing, there are countless beginner apps that help the average Joe with investment options. Or, if you’re not into the rise and fall of the economy but want to feel like you have a better grasp on your money, talk to a financial advisor.
Ben-Ishai, S., & Stanley, T. (2017, July 01). Millennials in Crisis: Myth-Busting Millennial Debt Narratives. Osgoode Hall Law Journal, 54(4), 1051-1090.
Consolidated Credit. (2018). How to Reduce Credit Card Debt. Retrieved from Consolidated Credit: https://www.consolidatedcredit.org/credit-card-debt/reduce-debt/
Lowenstein, L. F. (2005, February 01). Causes and Associated Features of Divorce as Seen by Recent Research. Journal of Divorce & Remarriage, 42, 153-171.
United States Department of Labor. (2018). Women in the Labor Force. Women’s Bureau Data & Statistics. Washington, D.C.: United States Department of Labor.
West, S., & Friedline, T. (2016). Coming of Age on a Shoestring Budget: Financial Capability and Financial Behaviors of Lower-Income Millennials. Social Work, 305-312.