4 FINANCIAL FEARS THAT MIGHT BE HOLDING YOU BACK (AND COSTING YOU MONEY)
Sometimes what’s stopping us from having the financial confidence we dream of is our own mindset. Here are some common limiting beliefs we have about money, and how to overcome them
Get cash confident and overcome your worries to create a bright future
When was the last time you said ‘Oh no, I can’t do that’? Was it recently? We thought so. But ask yourself this: is it something you think you’re not capable of doing, or something you’re actually unable to do? There is a distinction, and it’s one we often fail to make.
We all tend to hold beliefs about ourselves and our abilities that we rarely question, many of which stem from childhood. Yet these beliefs can stop us achieving our full potential in many ways, including financially. Doing the thing you think you cannot do will give you the strength, courage and confidence to tackle the next scary thing, which is why we should all be looking fear in the face and doing it anyway. So we asked the experts and money mentors to explain how you can challenge these beliefs and face your fears to live your best financial life.
FINANCIAL FEAR 1 ‘I’m no good with money’
If this sounds like you, it’s most likely you’re suffering from a lack of confidence rather than any mathematical inability. A recent study* showed only 37% of women (compared with 48% of men) feel very confident managing their money. This may be linked to the way we are taught about finances as children. ‘There is strong evidence that we talk to girls and boys differently about money, which can cement lifelong gaps in financial confidence and prosperity,’ says Iona Bain, author of Own It!. Perhaps your father was the sole or higher earner when you were growing up and that meant you rarely saw your mother making independent financial decisions or confidently managing her own money.
A negative perception about your ability to handle money may be stopping you from having a balanced financial relationship with your partner. If you perceive that they are ‘better’ with money, you may be prone to giving them more of the responsibility for household finances and planning, which affect you both. This could leave you vulnerable if the relationship breaks down or your partner runs into money troubles. It also means you don’t experience the confidence boost of being in control and setting and achieving financial goals.
This lack of confidence also often holds women back from investing, says Maike Currie, investment director at Fidelity International. ‘More than one in 10 women don’t feel comfortable choosing financial products and services, which is twice as many as men,’ she says. ‘More women than men describe investing as “incomprehensible” and “intimidating”, which leads them to shy away from starting to invest.’ The truth is, adds Maike, ‘Anyone can be an investor. And small amounts invested early can make a huge difference later in life.’
Fear of handling money can also lead to a negative cycle in which indecision stores up bigger problems for the future, says Iona. Debt is one of these problems; saving for a pension is another. Around 75% of women say they don’t plan to see a finance professional about retirement because they don’t think they have saved enough money. ‘As the problem is buried, the shame builds,’ says Mary Hemingway, an independent financial adviser. ‘When your beliefs about money are more positive, your habits propel you forwards and you can achieve change.’
Think back to your own childhood and what you learned at school. If you were never taught about money as a child or even as a teenager, it’s only natural to feel you lack knowledge. The good news is there’s lots of free advice available online (try moneysavingexpert.com, moneyadviceservice.co.uk and goodhousekeeping.com/uk/ financially-fabulous). Or try finance books that cover the basics, including Money Lessons by Lisa Conway-hughes and The Meaningful Money Handbook by Pete Matthew. You could also ask a money-savvy friend for tips. Educating yourself and opening up to family and friends will boost your confidence and help you to make good financial choices. And if you have children or grandchildren, you may feel better equipped to talk to them about money, too.
Money should be a priority in your life, says Iona, in the same way you would treat diet, exercise and relationships. ‘So make time for it,’ she says. ‘Schedule a weekly review slot, choosing a time when you’re fresh and not distracted. Assess your finances during this session and make one or two tasks to work on ahead of the next review slot.’
Positive beliefs help you achieve change
Challenge yourself to take a few risks and see what happens
FINANCIAL FEAR 3 ‘I’m scared of failure’
Like imposter syndrome, fear of failure, and fear of its twin sister, rejection, can cost you money and prevent you from achieving financial success and happiness. For example, it might make you reluctant to apply for a new job, go for a promotion or pen that novel you’ve always thought about writing. Fear of failure may also prevent you from starting up a business you’ve always dreamed about running, or even from taking control of your own finances.
Business coach Suzy Ashworth recommends reframing rejection and failure as simply an opportunity to learn and adapt for the next opportunity. ‘Every “no” you receive means you are one “no” closer to getting a “yes”,’ she says. ‘Try not to take it personally.’
Many successful women have been through rejection to get where they are: Malorie Blackman, former Children’s Laureate and award-winning author of the Noughts & Crosses series of books, received 82 rejection letters before she had her first novel published, while Joanne Harris was told in her rejection letters that her bestselling novel Chocolat was ‘too European’ and she should ‘dump the food’.
Why not challenge yourself to take a few risks and see what happens? Jia Jiang, author of Rejection Proof, spent 100 days deliberately seeking out rejection and learned it’s not the end of the world; in fact, it often led to some kind of positive outcome in the end. For example, in a negotiation situation, he says, if you ask for more money, you might not get what you want, but you’ll usually get something. ‘If you want to have success in life and make a difference in the world,’ he says, ‘then at some point it’s likely you are going to have to deal with a rejection.’
FINANCIAL FEAR 4 ‘I’m worried about dying’
Thanatophobia, or fear of death, is known to affect women more than men. If you fear death, it’s likely you haven’t made a will, and that could cost your loved ones. ‘Making a will is the only way to guarantee your estate will pass to the people you want it to,’ says Anthony Belcher, director general of The Society of Will Writers. ‘Without a will, your estate will be distributed according to the rules of intestacy, which may not be what you would want.’ You may assume that if you die, your spouse or civil partner will inherit your whole estate. ‘In fact, if you have children, your spouse or civil partner will only be entitled to the first £270,000, plus personal chattels and statutory interest from date of death to distribution, and half of the balance,’ says Sue Ioannou, chair of the Institute of Professional Willwriters.
It’s simple: get advice and plan for life’s what-ifs. ‘The process of writing a will should be painless,’ says Sue. Many charities, including Guide Dogs For the Blind Association, the National Trust and Cancer Research UK, offer free will-writing services that allow anyone to write or update a simple will for free, via a solicitor, in the hope that you will make a bequest to the charity.
Alternatively, you can find a solicitor online via The Law Society’s database (lawsociety.org.uk; from £200 for a simple will or from £400 for a more complex one), or hire a professional will writer (between £150 and £250 for a single will). Just make sure they are either regulated by the Solicitors Regulation Authority or are a member of a reputable trade body, such as the Institute of Professional Willwriters or The Society of Will Writers.