Written by Shveta Hariharan
Friday, February 22nd, 2019
As embarrassing as it is to admit, I've always had a difficult relationship with money. It's not that it's been a challenge to make money – I've just had a hard time managing my relationship with it. This is from someone who has two accountants as parents, so it's particularly disconcerting.
I know I'm not alone – both in my fear of money issues, as well as my desire to overcome it and develop financial literacy. In fact, a recent study showed that 43% of 18-37-year-olds feel that financial independence is the number one most important life milestone.
However, finances can be an emotional minefield for many people, including young professionals starting out in their career.
How Widespread are Fear and Stress over Personal Finance?
- Very widespread. In fact, according to a study by Bank of America and USA Today, 41% of millennials are "chronically stressed" about money.
- And the stress doesn't just affect those who are bad with numbers, or undisciplined with their cash: studies show even when millennials are quite confident with money, they still experience a great deal of stress due to factors such as a volatile global economy, a rapidly shifting job market and student debt.
What Makes People so Stressed About Money, Anyway?
- Money: A Taboo Subject
For many adults, money was a taboo subject growing up. And many grew up with parents or a culture that stressed over money. After all, how many of us have heard repeatedly that money is the "root of all evil"? Studies show 36% of millennials say talking about money makes them uncomfortable, and a close to 20% say it's a taboo subject in their family.
- Complexity of Financial Institutions
Sometimes people struggle with the complexity of financial institutions and have some level of distrust around them. In fact, studies show 23% of millennials trust "absolutely no one" for information on money matters.
Even among those millennials who feel they have good financial knowledge, studies show the majority aren't confident when it comes to more complex topics, like investing.
- How Can We Start Tackling our Finances?
Studies show the majority (85%) of millennials would like to improve their financial knowledge, and trustworthy financial service providers are the most popular choice to provide this education.
How I Got Over My Fear of Money
- I Accepted Where I Was At
A key aspect of moving forward for me was to accept my situation. If you're like me, then whether you're in significant debt, or in a stagnant place with your investment goals, just look at your finances honestly, and come to a place of acceptance. This put me in a better position to move forward.
- I Had Helpful Conversations
I opened up to trusted friends and family about what had been going on with my finances. In your case, you don't have to tell them any details you're uncomfortable with, but try to open up generally – talk to them about your financial goals, what you're struggling with, or ask them how they manage challenges. This helps reduce any feelings of taboo with money and can help you feel less alone.
- I Started Small and Kept it Simple
Over the past two months, I've forced myself to check in on my finances regularly, even if it makes me queasy. I learned how to budget – even if it was rough at first. I started a few different savings accounts, started paying off any debt I had, and searched for painless (and realistic) cuts to my budget. These were all simple, basic steps that were easy to do, and more importantly, they worked for me.