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The one topic that people can’t seem to talk about enough these days is money.  Of course that is understandable after the last two years of recession, unemployment, housing and credit woes.  The fact that millions of people have literally changed their entire way of thinking when it comes to money management proves that change was in fact necessary.

While it may be easy and obvious to many consumers that what worked in the past will no longer do the trick, there are those remaining who remain stuck in the past.  This is not due to denial but rather a result of fear.  Change does not come easily to everyone and for people who have specific financial fears, it can be downright scary.  Here are a few issues which result in financial fears that prevent people from improving their financial position.

• Debt-  An all too common problem in most households is high interest debt.  There are many ways to handle debt, most of which are neither fast nor easy.  The very thought of tackling debt is sometimes enough to scare people to the point they do nothing to remedy the situation.  This can result in one of two things-  the debt going unpaid with stress and fear increasing over time or continued minimum or sporadic payments which will lead to a lifetime of debt.
• Saving-  Just as debt can hold you back, savings can move you forward.  With the recent collapse of several large banks and an uneasiness between the lending institutions and consumers, many people are concerned about entrusting their hard earned cash where they no longer have immediate access to it (such as the cookie jar).  Unfortunately keeping your money tucked safely away removes any opportunity for growth and increases the chances it will be used for other expenses.
• Investments-  For those afraid to tuck their savings in an FDIC insured bank, the thought of risking it investments is beyond consideration.  Unfortunately by eliminating the risk of loss, you also restrict the earning capacity of your money in the future.
• Credit-  It has become so ingrained in our minds that credit is necessary for our very survival that some people fail to see the danger in focusing solely on their credit history.  Afraid to risk a drop in their score or worse, the chance to obtain credit in the future, some people continue making choices with a consumer mentality versus a survival mentality.  There is no doubt having good credit is an important part of our lives and something we should all work toward. It is also important to recognize when you are fighting a losing battle and need to change strategies.  If your finances have taken a turn for the worse and you are struggling to maintain your lifestyle it is time to forget about protecting your credit and take action to preserve your long term financial security.

Overcoming financial fears is not very different than overcoming other fears in life.  In most cases with a bit of introspection or even the help of an unbiased person we can pinpoint what exactly is causing our fear.  There have been many changes in the economy recently and what was standard procedure is now new and frightening terrain for many people.  Many fears are caused by a lack of knowledge and lack of control.  Take the time to learn the lingo and what certain financial processes involve in order to feel more comfortable and informed when making decisions.  There are few things in life that remain the same, therefore we each have to learn to adapt and move forward in our changing world.

Guest post by Trisha Wagner

Trisha is a freelance writer for DepositAccounts.com, where you can compare rates of checking accounts from dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.

Tagged: business, debt, fear, finances, financial fear, money, Personal Finance, Savings account