Financial Insecurity



This may or may not come as a controversial statement, but many people feel insecure discussing their own finances. There are likely many reasons for this. Some of these are associated with our society’s obsession with celebrity. Modern wealth voyeurism began in 1984 with Lifestyles of the Rich and Famous which aired for over ten years. A few years later, MTV Cribs would start its own run of nearly two decades. diminish

Another source of insecurity comes from people’s feeling of ignorance on the topic of finance itself. For many, one look at a 401(k) statement invokes a feeling of being back in algebra class. Watching CNBC or Fox Business makes some people feel like they are on another planet. I have a bachelor’s degree in finance, am a CERTIFIED FINANCIAL PLANNER™ practitioner, and still get perplexed by many of the concepts I must consider in my profession. If you feel overwhelmed, you are not alone.

But the single most common factor that leads to people’s insecurity about money is the feeling that they do not have enough of it. Afterall, it is required to obtain some pretty important stuff: food, clothing and shelter for starters. But even before money existed our ancestors would surely become more anxious if they thought any of those three items were in jeopardy of possession. The 20th and 21st centuries, however, have brought whole new meanings to the concept of needs and wants. Our needs today go way beyond food, clothing, and shelter. Healthcare and other forms of insurance are now large line items on people’s budgets. For many, helping their young adult children is a top priority.

The most common reason people feel that they do not have enough money is because they do not know how much they need.  They have never actually sat down and tried to determine where their earnings are going. I cannot stress this enough: it is vital to your financial wellbeing to know how much you spend on various items. The real value of doing serious financial planning is determining what your short to long term goals are and how much cash will be needed to achieve them. For most people who are approaching retirement, saving significant additional money is not an option; the accumulation phase is ending. The most meaningful work you can do is on your budget, and many times that makes all the difference.