Have you ever woken up in the middle of the night worrying about finances? You’re not alone. For some, they wonder if they will ever dig out of debt and for others, it is the fear that they will never be able to retire. Only you can answer what your deepest financial fear is. It may even be several fears. Here are 5 of the biggest fears and challenges that are facing people of all ages today.
1. Unexpected Financial Emergency
According to a recent survey by Bankrate, only around 40% of Americans would be able to cover a $1,000 emergency expense, if one came up. Unfortunately, these unplanned emergencies can happen to anyone at any time.
Imagine just for a second you are driving down the road and all of a sudden are in an accident. You have auto insurance, but you are still responsible for a deductible. You sustain a few minor injuries and have to go to the hospital. You have health insurance, but not everything is covered. How will you pay for all these expenses?
2. Never Getting Out of Debt
Debt is not going away anytime soon. According to Experian, which is one of the top 3 credit reporting agencies, consumer debt rose to $13.3 trillion in the 4th quarter of 2018. This number continues to rise steadily each year, meaning Americans are continuing to dig deeper and deeper into debt.
Everybody’s debt situation looks different. You may have a mortgage, student loans, credit card debt or even medical debt. No matter what kind of debt you have, many of you do not see light at the end of the tunnel. Your fear of never getting out of debt is one that you constantly think about no matter what you are doing.
3. Not Having Enough Money to Retire
Retirement is on the minds of most workers out there. The ultimate goal for most is to have the ability to stop working when you get older. In a study done this year, Northwestern Mutual found that more than 1 in 5 (22%) Americans have less than $5,000 in retirement savings. Around 56% of Americans do not even know how much they will need to comfortably retire.
4. Losing your Job
A huge fear for many out there is the thought of losing their job at any moment due to downsizing, under-performance, or another economic collapse. According to a Gallup Poll done in 2018, more than 1 in 10 people feared losing their jobs. The thought of having to go through the unemployment line terrifies many individuals, especially since losing an income means that everything else in a person’s finances is going to be affected, including: debt payments, retirement contributions, emergency savings, medical payments, etc.
5. Fear of Missing Out (FOMO)
We have all heard the expression “Keeping up with the Joneses.” For Millennials, they are now going more and more into debt. In a recent study done by Credit Karma, 48% of Millennials are going into debt to keep up with their friends and acquaintances. According to the study, Millennials fear missing out on a once-in-a-lifetime experience, not feeling included in future activities, feeling like an outsider, being judged and losing friends. This is why they are willing to put themselves into tremendous debt in order to fit in. Does this sound like you?
Summary
These financial fears are definitely a concern for many individuals today. Maybe your fear is something different then what is listed, but the bottom line is we all have fears – especially of the unknown. Over the next few weeks, I want to tackle some of these fears more in depth, including how to prepare for, and overcome them, starting with Unexpected Financial Emergencies.