You’re too old to go trick-or-treating. Goblins and witches don’t scare you anymore. Nowadays the things that go bump in the night are real-world worries — from your fear of going upside down in yoga class to how scared you are to check your bank account balance on Monday morning after a particularly carefree weekend.
This post originally appeared on LearnVest.
Unfortunately, we can’t do anything to help your headstand (though we hear using a wall for balance helps), but we can offer advice for some of the money issues that you’re afraid to address. So instead of pulling the covers up over your head, plugging your ears and singing “La-la-la-la!” — meet your financial fears head on. They’re only scary when you avoid ’em.
The Fear: Wading Into That Pile of Bills
How to Get Over It: First: “Go through them one by one,” says Natalie Taylor, a CFP with LearnVest Planning Services. You just have to take it one bill at a time. If you keep letting them stack up, it’s just going to get worse. Once you get started, you’ll build up momentum and want to keep going.
To keep the pile-up from happening again, advises Taylor, set up automatic bill pay to cut down on the mail you receive at home. However, automated bill pay is best used on fixed expenses (such as a gym membership, your mortgage), while variable expenses like your mobile phone bill or electricity bill should never auto-deduct, because their cost depends on usage (say, a $100 bill one month and $150 the next).
The Fear: Asking for a Raise
How to Get Over It: Pick the right time. You’re itching to pull your boss aside to have a delicate conversation about giving you a pay bump but… you’ve got cold feet. We don’t blame you. The secret? First, spend a few months going above and beyond your job description. Be the star employee who’s top-gunning it all over the company — winning new business, impressing clients and knocking important projects out of the park. The best time to negotiate is when you’re riding high from a big success, and make sure you can quantify how your contribution is fuelling the company’s bottom-line interests and values.
And remember: You must be your own advocate. You might think that your employer should take notice of how you’re hunkering down at your desk, head bowed and typing away, and that your hard work will speak for you. But that’s not always or often the case. Yes, work hard. But also: speak up.
The Fear: The Economy Tanking or Stock Market Crashing
How to Get Over It: Keep in mind that you are probably investing money for the long haul, so the trick is to not be too swayed by immediate gains or losses. Says Taylor: “I even recommend that clients write out an intention statement that they can refer to, something like, ‘I know that this is a long-term investment and that being in a well-diversified portfolio maximises my returns in the long-term, so even if I see the market drop, I’m going to stick with it.'”
In other words, with the money you invest, you “set it and forget it”. “Control your behaviour so that you’ll get market-like returns,” says Taylor. “A lot of investors lose money by getting in and out at the wrong time.” You shouldn’t invest money you’d need to pull out in the next three to five years. Historically, the market has returned at a 7-8 per cent average, but you may get that only if you’re able to wait out the ups and downs. And, really, a market downturn isn’t necessarily the worst thing in the world — which is to say, in Taylor’s words, “When the market drops, that’s the time to buy like it’s the sale rack at Banana Republic.”
The Fear: Never Getting Out of Debt
How to Get Over It: Maybe it’s your student loans. Maybe your spending went off the rails and you racked up too many credit card purchases. “The scariest part is not knowing how much you owe or what your payments look like and how they can fit into a realistic budget. So the first step is getting your arms around your debt,” says Taylor. How to do that? Pull together your details and see who and what you owe.
Then put a game plan together for tackling your number. Look the amount square in the face and do something about it. What we want you to know: You can get out of debt, although you might need help creating and sticking to a plan.
The Fear: Never Saving Enough to Buy a Home
How to Get Over It: You see all your friends who seem to be buying homes left and right… and you feel left behind because you’re still renting. “When it comes to real estate, people really get into comparing themselves to others,” says Taylor. We get it: Homeownership is an “I’ve arrived!” hallmark baked into our cultural psyche.
But it’s not an automatic rite of passage. It’s one of the biggest purchases you’ll ever make, and one you should only consider if you’re in a good financial place to make that investment. And it might be that you’re still enjoying the perks of not owning a home. “There are substantial benefits to renting,” says Taylor, who touts the flexibility of being able to upgrade, say, from a one-bedroom to a two-bedroom, without having to sell your place first, and the limited out-of-pocket expenses, because when something breaks, it’s usually not on your dime.
Still, if owning a home is your dream, and you’re saving towards making it come true, then keep in mind that it’s a stalwart purchase. “You should generally only buy a home if you’re going to stay in it for seven to 10 years,” says Taylor. “The housing market goes up and down, and you want to have time to build equity so that you’re not under water when you sell.” Another way to avoid being the proverbial under-water seller: putting a full 20 per cent down. If you’re still working towards that goal, then here are five ways to boost your down payment.
Financial Fears to Confront and Conquer [LearnVest]