Getting Over Your Fear of Money

Step One for getting over your fear of money: Learn what it is.

Most of us suffer from a fear of money from time to time, and don’t even know it.

Fear of Money
If you paid fees when you bought your house that you didn’t understand, you suffer from the affliction.

If you chose the fund into which your Section 401(k) contributions are placed by asking a co-worker what he or she thought was best, you need to read this article.

If you have a feeling that you should be getting paid more than you are for the work you do, but are not really sure, you have a fear of money that it would be good for you to address.

Step Two for getting over your fear of money: Learn why just about everyone suffers from it at some time and to some extent.

Money decisions are life decisions. Directing money to a life goal makes your pursuit of it a real pursuit. If you are rational, the things you spend money on are the things you care about most.


You know what? Most of us do not make it a practice to make conscious decisions about what matters most to us. We do that when we must. Our usual practice, however, is to drift, to let things happen to us and to limit our involvement to responding in the best way possible to the things that happen that are not the result of our direction.

We say that we want the freedom to do what we want with our lives. We don’t always want the responsibility that comes with that freedom, however. We don’t want everything riding on our own efforts.

If we think through money choices, we are really thinking through life choices. This is not an easy thing to do. It is a hard thing to do.

Fear of Saving Someone once asked Willie Nelson why he took up singing other people’s songs when he was so good at writing his own. He said that writing his own songs was so emotionally draining an experience that he preferred to avoid it. Making conscious money decisions is a bit like writing your own songs. It’s a good thing to do. But it’s understandable that most of us don’t naturally seek out the experience.

Step Three for getting over your fear of money: Learn why it is important that you get over it.

Ducking money decisions can cause you a lot of pain.

There are mouth-watering opportunities available to most middle-class workers in the New Economy. Take advantage of them, and you can build a wonderful future for yourself. There are great risks too. The risks are greater than they were for your parents. If you fail to make conscious money decisions, you run the risk of losing your place in the middle-class.

The potential ups are very high. The potential downs are very low. You really must rein in your fear of money. You really must get it under control.

Step Four for getting over your fear of money: Prepare a budget.

Crafting a budget is the answer.

It’s that simple. And that complicated.

Crafting a budget goes a long way to solving the problem because crafting a budget means putting your money choices on paper. When you see your options on paper, you will be naturally led to making conscious decisions that are at least somewhat reasonable. You need to get this stuff out of your head, where it fills you with fear and undermines your confidence, and get it down on paper, where you can deal with it rationally.

Budgets are wonderful things. They cause you to think about money questions differently than most do. More effectively than most do. Writing a budget is like voting yourself a raise.

Step Five for getting over your fear of money: Make your budget a Life Plan.

Make your budget more than a list of spending categories and the amounts of your income allocated to them. Include plans for things you want to do with your future. How much do you want to save this year and next year and the following year? What percentage of your next raise will you direct to saving? If you had more money to invest, how would you invest it? What would be your ideal retirement age, if it were possible for you to retire early?

Fear of Investing

Ask yourself these sorts of questions when crafting your budget. Spend some time thinking about them. Do research if you think that will help. Talk the questions over with loved ones. Come up with answers that are at least minimally persuasive to you. Write them down.

Step Six for getting over your fear of money: Revise your budget.

The crafting of a budget is not a one-time thing. There are questions that won’t occur to you the first time you prepare a budget that will jump out at you on the second try, or the third.

The most important benefit of a budget is not the constraint it places on spending. The most important benefit is the learning process it facilitates. Learning conquers fear.

Step Seven for getting over your fear of money: Take one new money-related action every six months or so.

Much of your fear of money results from a concern that you will do things wrong. There’s all sorts of mumbo jumbo in the personal finance literature. There are show-offs who feel that it makes them look big to point out the mistakes of others. Many money decisions are one-time things, and your lack of experience may cause you to get things wrong. Since money is involved, you will feel stupid when you see that you have made mistakes.

You don’t want to be paralyzed by a desire not to make mistakes. Take actions. Don’t do things that may cause significant financial losses until you are sure of what you are doing. But take the sorts of steps that help you become better informed.

Ask a friend something, paying no care to the concern you feel that it may make you look dumb to ask the question. Ask someone who posts something on a discussion board that you don’t really understand to offer a more basic and more complete explanation. Buy a book. Do things. Actions build confidence. Even doing dumb stuff (so long as it is not stuff that is too costly) can get you moving, and that motion may in the long run take you someplace good.

Step Eight for getting over your fear of money: Engage in cautious efforts to get over the taboo about sharing details of your financial circumstances with others.

Fear of Career Change

You don’t want to share everything with just anyone, to be sure. Be cautious about this. But it can be a healthy step to share some aspects of your financial circumstances with trustworthy friends.

Many of us learn best by talking things over with friends. Learning is not just about taking in facts and arguments. Learning in part comes from the development of an attitude of receptiveness to new ideas. We are more receptive to things said by friends because our knowledge of what makes our friends tick provides us the context we need to make full sense of the things we hear.

We learn about all sorts of things from interactions with friends. We generally don’t learn much about how to manage money from them, however. Discussions of personal financial circumstances is taboo. There are reasons for the taboo, so you need to tread lightly here. But give some thought to whether there might be particular people with whom you could safely share some thoughts and questions and facts and concerns.

When you put your money fears out in the open, their power is diminished. You still need to take action on the question at issue, of course. But often getting over the fear of money is the hardest part of the job of getting to a better financial place.