What Are Your Financial Fears?

Posted by Lynnae on August 27, 2008

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The following is a guest post by Ashley of Wide Open Wallet. If you like this post, consider subscribing to her RSS feed.

One thing I fear is my husband being out of work. Yes, we have an emergency fund. But for a one-income family it’s a nerve-wracking thing. If my husband lost his job we would get though it, but it would mean major lifestyle changes around here. What are we doing about it? Well, a couple of things. Honestly, the main things we are doing is waiting. Waiting until my son goes to school. Then I can work without having to pay for day care. Another thing is that I am currently in school. That way when I do go back into the work force I’ll have a degree. Lastly, I’m trying to make a few bucks here and there and hope something turns into some actual cash flow we can count on.

Another fear is retirement. I know we haven’t saved enough for retirement. It’s something that I worry about. What are we doing about it? Well, I hate to say it but nothing. We are saving a little every month but it’s not enough. I could list a million excuses why we can’t save more. But the fact is there is only so much money to go around and I can’t meet all my goals as fully as I would like. But it’s on the list of things to do.

College is my last fear. Not my own college education, but my kid’s. The more I read about how expensive college is the more my stomach goes into knots. I know that I can give them free room and board, which is huge, and that I will help them as much as I can while they are in school, but will that be enough? What if it turns out that my kids have great passions and through hard work and determination they get into a private and expensive school they are just dying to go to? Then what? It would break my heart to have to watch them give up their dreams. What am I doing about it? Nothing. It’s in our long term plans but again, we can’t do everything we would like to do with a finite amount of money. I think we need to beef up our retirement savings before we start saving for college. It’s just some cold hard facts of life at work here.

So what are you fears? What actions are you taking against them?

A note from Lynnae: Thank you Ashley, for sharing your fears with us. It sounds like you’re taking steps to address them, even if it’s slow going right now. Kudos to you for doing that.

My biggest fear right now is adjusting the budget to accommodate a mortgage payment. I know we can handle it, but it will definitely be an adjustment.

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Comments

12 Responses to “What Are Your Financial Fears?”

Jaynee on August 27th, 2008 5:13 am

Your fears are my fears! My DH and I both work, but we have no emergency fund in place (yet). So if one of us loses our job we’ll be in a REALLY tough spot. I think we’d make it - but it would be REALLY rough.

We definitely don’t have enough for retirement. That’s completely our faults. Neither one of us put much into our 401Ks while we were single in our 20s. It was only when we got married that we wised up. So we’ve got a LOT of catching up to do if we expect to have any kind of enjoyable retirement.

Right now our two kids will have enough money for one semester each of college (presuming the costs of school in 14 years is significantly higher than it is now). My hope is to get them started towards saving when they start getting an allowance and even more when they get their first jobs. But we won’t be able to start contributing to their 529 plans again until 2012. Right now we’re concentrating on becoming debt-free.
James@capitalcouplesfinance.com on August 27th, 2008 5:57 am

My main fear is that I’ll never get out of debt! I have soooo much, but I know if I maintain a frugal lifestyle and just plug away at it, it will eventually disappear. Its hard not to be discouraged when life events slow down the process.
Kelly from Almost Frugal on August 27th, 2008 9:00 am

My biggest fear is my car dieing. I actually feel fairly confident about our ability to handle other sorts of emergencies, but the car would be just small enough and just big enough at the same time to throw a major wrench in the works.
Miranda on August 27th, 2008 9:18 am

I fear losing my a regular and lucrative freelance gig I have maintaining a company’s corporate blog. I also worry that the car will die and that my husband won’t be able to find a job when he (finally) finishes school.
Jessica on August 27th, 2008 9:49 am

My husband did lose his job last year, when our daughter was just 10 months old. I was, and still am full time employed and do earn more than my husband. We did have backup savings but didn’t need it. We also did keep our daughter in daycare because without family to babysit, he had no way to go on interviews or do the career counseling that his former employer provided him. However, I want to have more children and would like to be a SAHM. But, I am the one with more seniority in my job, I’m a union member so I have more security than he does, I do earn 60% of our income so it would be very scary for me to quit and then something happen to his job afterwards.

One of my main fears with that is health insurance, and being without it. I have had some freak incidents which would have been catastrophic without health insurance. Namely, a bone in my foot died and had to be removed. Two years later, the same bone in my other foot had to be removed as well. Had we had to pay out of pocket for the MRIs, surgery, and follow up care, we would have a huge debt.
Marci on August 27th, 2008 9:55 am

I am a single (lowere)income, single (older)person household. That is always scary to start with, but being debt free eases some of that. If I were to lose my job, my biggest fear is not about money itself, but about losing my health insurance. That’s the only reason I continue working right now anyway.

When I get scared about something, I ask myself, “What is the worst that could happen? And how will that affect me? And what could I do about it?”…. In case I were to lose my job, I have worked out a bare bones monthly essentials budget - property taxes & house insurance $73, water & sewer $53, electric $45, gas $50, car insurance $65, groceries $80 (large garden and stockpiled shelved) and prescriptions $10… Total: $376/month - I can handle that - it’s the interest income from my savings (without touching the savings). If I added a major medical policy, then I’d need to add more to that.

Having some sort of major medical emergency, expense, is also a big fear. It could wipe out my savings, even with health insurance.

My other fear is inflation - will my retirement savings, SS, PERS pension, IRA’s, and interest dividends be enough for retirement? I can’t foretell the future, so I need to believe that what I have figured I will need will be enough - time will tell.

Would I need to make major lifestyle changes if I lost my job? NO. I have already made them and been living them for years. I’m comfortable and content.
Marci on August 27th, 2008 10:01 am

Lynnae - If it helps any, it looks to me like you have your financial priorities all in line, and in a good order. You are right where you need to be at this time in your life. You’re home now when you need to be but preparing for the time your family needs will slacken a bit and allow you to work out of the home. You have your retirement before college - priority right And you are putting a little each month for retirement, which is better than nothing. You can only do what you can do, and you seem to have it all in a good financially logical order! Keep it up!

Oh yeah, and about that mortgage budget, you’ll handle it just fine And next year, get that garden in to save some grocery money And think, edible landscaping when you can so you can eat into the future off of it
Dreamer on August 27th, 2008 3:06 pm

I also posted this same post elsewhere:

I watched my parents slide farther and farther into debt, taking care of 2 kids on one LPNs income. I remember eating holiday meals at soup kitchens, cereal with water instead of milk, and christmas presents from the “giving tree” at a local church. We weren’t as poor as we could have been, but we had our hard times.

My fear is being in the same situation with me and my wife. I am terrified of not being able to provide a comfortable living. Nothing opulent or extravagant, but enough that we’re always confident in our next meal. I have literally laid awake at night, unable to sleep, focused on the mental image of not being able to provide for my family.

I’m 24 years old. I avoid almost all debt, unless I have the cash available to pay it off if necessary. I save about 25% of my monthly gross income. I try to donate the maximum to both of our Roth IRAs yearly. I’m always working on school and education to earn more money. Part of this is ambition. The other part is that fear. I always want to have a bigger cushion, more security, more peace of mind about money. I’m not joking when I say that fear drives most of my actions.
Lisa on August 28th, 2008 11:41 am

I think the college savings thing is way overrated. My parents paid for all my college and I basically threw it away because I had no vested interest in my education. One thing I have learned is that there is always a way to make something work. I have a little put away for my kids, not much, but they know they will need to have summer jobs once they are old enough and also contribute to their own college education. I am a firm believer in community college to get your basics out of the way at a very reduced price: Freshman English at the big U is going to cost a lot more than Freshman English at the community college and the credit is the same. If they are doing work-study it is going to keep them out of the bars anyway. Plus with them grown and out of the house what’s going to be stopping me from doing some extra work here and there to slip them some extra cash when they need it?
Mubongo on August 28th, 2008 11:58 am

Here is an interesting site on paying for college http://projectonstudentdebt.org/mission.vp.html. It has a list of colleges and universities that have made no-loan or low-loan pledges and their expected family contributions based on income.

More and more colleges are doing this so that students are not saddled with debt when they graduate. Keep an eye on these programs, and when the time comes, encourage your kids to look at these schools first.
Amanda on September 3rd, 2008 4:20 pm

I have many of the same fears. My husband is an aspiring writer so he earns a bit here and there doing office temping. Retirement is far off, but with just one real salary, it seems like it will be impossible.

Two things I want to add–First, it is more important to save for retirement than for your child’s education. There are many scholarship, loan, and grant programs to help your child pay for college. There is nothing similar for retirement. I know it sounds harsh, but if you save for college and not retirement, your kids may go to college for free but will end up supporting you for years when you are older.

Second, college loans are good debt. College is an investment that will last a lifetime. If someone takes out a loan each year of college that is equal to a car loan, it is still a good investment. A college degree will last much longer than four cars will. Plus, the government loans have great interest rates (I believe mine is 3-4% right now) and no penalty to pay them back earlier. And, they are always willing to work with you when you need to hold off or lessen payments due to salary changes.