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6 Common Money Fears and How to Get Over Them

Financial anxiety leading to a sleepless night? Fear answering the phone because it could be creditors on the line? These are common to many people. The fear of money problems and the fear of not having enough money are real.

Dealing with money woes can be stressful, but here are a few common money fears and how to handle them.

1. Outliving Savings

Money is the number one source of stress for Americans. Many people—even millennials—are scared they will run out of money before they run out of time. This may seem like a grim thought, but when thinking practically about how long retirement could be, it’s not surprising to feel anxious about not having enough savings.

To help ease that anxiety, saving in as many places as possible might be a place to start. For people whose employer offers a 401(k)-match program, one idea might be to contribute the maximum match. Putting money into a savings account that earns interest, instead of leaving it in a checking account that doesn’t, could be another avenue for savings.

For those who have a high-deductible health plan that qualifies for a health savings account (HSA), opening and contributing money to an HSA may be a good vehicle for savings. Money in this account is contributed before taxes, and any interest is earned tax-free.

HSA funds can be used for healthcare-related expenses or kept it in the account to earn more interest.

The earlier a person becomes proactive about savings and retirement, the more time that money will have to grow and earn compound interest.

2. Affording Basic Necessities

Before being able to save for retirement, some people may have fears about affording daily living necessities, like water, electricity, and housing. The fear that there won’t be enough money for basic expenses is the number one fear for 35% of Americans .

To stave off this fear, taking charge of household finances by creating a budget could be a good place to start. This might help track where income goes and eliminate any unnecessary expenses, focusing on wants, not needs.

Once household finances are handled, a budget can be adjusted. Budgets aren’t a set-in-stone thing—they’re evolving, fluid documents. For example, if credit card debt or a car loan is paid off, money that was being spent on those payments could be moved into a savings or investment account.

3. Career Stall

A budget considers not just spending, but also earning. If there is not enough money coming in—or future earnings are uncertain—that could lead to fear about the financial future. Comfort and stability are nice, but not moving up may be detrimental in the long run.

Looking for ways to jump-start your career growth by talking to like-minded people in your industry may be a good place to start. Or perhaps find a mentor or coach who could help map out a plan for getting a promotion, asking for a raise, or job hunting to find the next “right” thing. Change isn’t always easy, but it could make a difference in career and earning potential.

4. Lack of Emergency Cash

Paying bills and necessities up front might not leave a lot left for anything else, including saving for unexpected costs, and that can cause anxiety.

Medical debt is the leading cause of personal bankruptcy in the United States, and nearly one in five Americans has delinquent medical debt on their credit reports, according to the FINRA Foundation’s National Financial Capability Study (NFCS) . While medical emergencies do pop up, having an emergency fund equal to three to six months of household expenses might help ward off major debt later on.

Making an emergency fund a priority—like the rest of the household bills—and putting a little each month into a savings account before spending on things that may not be as important, can be an effective way to grow an emergency fund.

It’s not necessary to stress about hitting a target goal right away. Aiming for small goals every month, with small budget adjustments, could potentially help build a healthy emergency fund over time.

5. Low Credit Score

Being financially responsible means being creditworthy. This means being responsible enough with money that lenders and credit servicers let you borrow money. With a low credit score, it can be much more difficult to get loans or lines of credit.

Having a low credit score can set a person back for so many things: being denied a credit card or an auto loan, or having a difficult time getting an apartment. Some people may fear that once they have a low credit score, they won’t be able to build it back up—but there are options.

Payment history is the biggest factor in determining a person’s credit score (but not the only one, of course). Making payments on time or ahead of schedule can help ensure an account’s payment history stays intact. Increasing debt payment amounts, rather than only paying minimums, to keep from paying more in the long run may be something to consider.

For any outstanding bills or anything in collections, making a plan to pay those off may lead to some stress relief, as well. Try contacting the lender or collector about setting up a payment plan if the budget just won’t expand enough to pay them in full.

Lowering credit utilization, which is a major factor in credit scores, can positively affect that score. Credit utilization is how much money a person is currently borrowing. For example, maxing out all credit cards means a borrower is utilizing 100% of their credit.

A common suggestion is staying well below 30% utilization—or even better, under under 10% —to help a credit score move up. Paying down as much as possible on a credit card every month and paying off the balance monthly typically means not having to worry about paying more in interest later.

6. Mounting Student Debt

Taking out student loans to pay for school is the reason many people are able to attend college. Students might even forget about them; however, once graduation is in the rear-view mirror, it’s time to start paying them off.

If those payments aren’t made, that could damage a person’s finances, debt, and overall credit history. And if the payment amounts are high, the borrower may not be able to save for other big-ticket items, like buying a house or starting a family. Those borrowers are in good company. In the U.S., 44 million borrowers have a collective $1.5 trillion in student loan debt (and it’s rising).

One way to take charge of student loan debt is by refinancing or consolidating loans, either through government programs or with a private lender.

If you do the latter, keep in mind that may mean giving up some of the benefits that come with federal loans, but it also might mean being able to get a lower monthly payment or a shorter term than the current loan offers.

Managing to Keep Fear at Bay

While it might be natural to react with fear when there is precious little money in the budget, managing what there is—wisely—is part of becoming a responsible adult. Looking at the big budget picture can be helpful when planning for the future and paying off debt, whether student loan debt or another type.

Being able to identify needs vs. wants is a key factor in building a budget that works for the long run. Think about those “wants” as a trip that needs an itinerary. Without an itinerary, that trip (i.e., getting that “want”) can be stressful. But with a plan, it’s more likely to be smooth sailing.

Tackling debt head-on, crafting a practical budget, and building savings and credit require planning. And that planning may have the delightful side effect of less stress.

Want to manage your student loan debt so you can ease some of your money fears? Consider refinancing your student loans with SoFi.

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If you are a federal student loan borrower, you should consider all of your repayment opportunities including the opportunity to refinance your student loan debt at a lower APR or to extend your term to achieve a lower monthly payment. Please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans or extended repayment plans.

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The information provided is not meant to provide investment or financial advice. Investment decisions should be based on an individual’s specific financial needs, goals and risk profile. SoFi can’t guarantee future financial performance. Advisory services offered through SoFi Wealth, LLC. SoFi Securities, LLC, member FINRA / SIPC .

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