Updated: Jan 31
Taking the first step towards acknowledging your financial situation is the most difficult part. Here's how to stop being afraid and take action.
Have you ever been afraid to open a credit card bill, check your bank account balances, or sit down and create a monthly budget? You are not alone. I regularly talk to friends and readers who admit they are afraid of dealing with their personal finances. Even if your finances are sound, living in fear of your personal finances could come back to really haunt you in a number of ways. Ignoring Your Finances Will Hurt You If you regularly ignore your finances (whether out of fear, laziness, or something else), you may survive for a while if you are unwittingly but regularly spending less than you earn. Of course, you may also be digging yourself into debt (or throwing money away) because you don’t have a handle on your money. When you ignore your personal finances, you don’t know how much you are spending in relation to your income. You also put yourself at risk for late fees on credit cards and other bills, and for overdraft fees because you may spend money that you don’t have in your checking account. But wait, it can get worse. If you don’t regularly check your bank and credit card balances (even more frequently than when you get your monthly bill), you may miss bank mistakes or fraudulent transactions that will really cost you. Although unlikely, there’s always the possibility you could fall victim to identity theft. Catch ID theft early and clearing up your credit shouldn’t be difficult. Give an ID thief time to open accounts in your name, however, and your credit and finances could suffer for years. The lesson? Don’t ignore your finances!
Check your account balances once a week.
Open bills as soon as you receive them, and pay them as soon as possible. (The less time a bill sits around unpaid, the less you should worry about it.)
Create a budget.
Begin to get out of debt.
Set longer term financial goals.
If you’re still overwhelmed by your financial situation as you begin to take steps to deal with your money, get help. Talk to your partner or friends about money. You don’t have to go into details if you aren’t comfortable with them, but the more you talk about money and listen to what works for others, the more your fear will begin to fade. If money still paralyzes you, get real help. Talk to a credit counselor about debt problems or a fee-only financial planner if you have already accumulated assets and want to begin setting long-term goals.