Why is it important to confront what may scare us? Well, about half of adults can’t comfortably cover a $1,000 surprise, per Bankrate. That’s a signal to confront our financial fears, build financial cushions, and cut sneaky costs.
Let’s name a few common money frights, why they sneak up on us, and what to do next.
👻 The Vanishing Emergency Fund
There’s no way to know when life will throw you a curveball. Suddenly, you have a flat tire, your work shift has been cut, or you’ve had to pay a high co-pay. Without a buffer, small hits turn into interest and stress.
We can prevent going into a scary red zone on our account. Open a separate emergency savings account and set a weekly transfer (automatic transfer) that runs on its own. Twenty dollars a week becomes about one thousand forty dollars in a year.
Having an emergency fund significantly changes the game when a financial emergency hits. Avoid financial anxiety by setting safety nets.
🕸️ The Subscription Web
Imagine spiders multiplying out of control and eating into your finances. Tiny monthly charges love to pile up in the background when left unnoticed.
Take an hour at the end of every 3 months to audit your transactions and mark anything you do not actively use or derive value from. For context on those pesky bugs, if you exterminate two unused subscriptions that cost $12.99 each, you free up about $312 in a year.
Send that amount to the same emergency account we mentioned above, and pencil in a reminder to check your transactions every three months to repeat the cleanup.
🪦 Zombie Debt
Old balances have a way of coming back to haunt us. That is because interest keeps moving, like a stubborn zombie.
Many people spread extra payments around from one debt to the other and wonder why nothing changes.
Instead, list every balance with the interest rate next to it. Then pay minimums on all your outstanding debt. Next, aim every extra dollar at the highest rate until it is gone. You can then roll extra payments to the next highest rate. Once you are out of debt, immediately work on your fears of debt management so you can stay out of debt!
🕯️ Phantom Fees
Fees hide in places you often forget to check, including out-of-network ATMs, overdrafts, and paper statements.
Choose a checking setup that matches how you actually bank, route your direct deposit there, and set low balance alerts so you can move money before fees hit.
If you are traveling and need cash, plan one cash withdrawal each week from an in-network ATM. Round it off with a planned review of your account’s fee schedule once a year.
You do not have to fix everything this week. Choose one small thing and finish it. Put a note on your phone, tell a friend, and give yourself credit for the win. Next week, choose the next small thing. That is how the hallway gets brighter, and your money starts to feel like a place you can live in comfortably.
Let’s turn on the lights and dust out the cobwebs on pesky subscriptions and forgotten fees. It’s the season to confront our financial fears about debt and saving scarcity.
