Do not think for a minute that we believe there is no basis for many people's fear of tackling their finances. Powerful institutions, especially, can be intimidating, overcharge us, capitalize intentionally on our vulnerabilities, or simply hide the truth in masses of what marketers and their lawyers call "mouse print," meaning of course that only a mouse could get close enough to read it. In addition, the mean-spirited and unfair universal default provision has been widely adopted by credit card companies. Universal default is a clause included within most credit card offers and agreements, which says if you are late with any other creditor, you are considered late with your credit card issuers. This not only negatively impacts your credit card interest rate, which can suddenly zoom skyward if you are late paying a telephone or any other type of monthly bill, but it also will adversely affect your credit score. The message of this article, is that we can no longer afford to roll over and play dead.We must stand up to meet the financial tasks before us, become much more familiar with the game, and play to win in spite of our fears. It is also wise to become familiar with the politics of personal financial issues and vote to change those we believe could be holding us back. If you fall victim to an unfair financial practice, complain to your congressional representatives, to your news sources, in blogs, and to anyone else who will listen to the unfairness of powerful financial interests against ordinary working consumers. Your complaints will be heard, and in the process, your actions will help lessen your fears.
If you still feel reluctant to start, you may well be blocked by fear. Like a strong narcotic, fear can smother or sabotage even our best intentions. It is an insidious emotion because it stifles our ability to take action. It just mires us, as if in quicksand. Contrast this with love, which compels even the grouchiest soul to be kind-hearted, propelling him or her forward. The feeling that we have been treated unfairly also can energize us, compelling us to do something to resolve the situation. But fear can stop us dead in our tracks if we let it.
Scientists who study sleep have identified the period when we first wake up, before becoming fully functional, as "sleep inertia." This sluggishness causes us not to hear the alarm go off or to make faulty decisions, perhaps until we have had that first cup of coffee. Sometime after 10 minutes (and up to two hours according to sleep scientists), we cross that threshold where we feel "awake" and ready to face the day. This same kind of inertia is at play when we are fearful. Our psyche shuts down, and we become emotionally paralyzed and unable to act, even though we realize intellectually that it is in our best interest to move forward.We literally are drowsy about the object of our fear, and we procrastinate or refuse - consciously or unconsciously - to deal with the situation. That is how fear works: it gives our power to the object of our fear. And unlike sleep inertia, fear can hang around, not for 10 minutes or two hours but for as long as we are unable to break its spell and wake up and face the day.
Fear also can be an isolating emotion. It is easy to feel that we are alone - that everyone else, if faced with a similar situation, would have an easier time of it. But the contrary is true. Fear is universal. At some point, everyone gets that sick feeling in the pit of their stomach or the sweaty palms that signal unease. But the good news, and the lesson we can learn from the Olympic athletes, is that it is controllable. As athletes follow the advice of coaches and sports psychologists to re-pattern behavior to overcome fear, we can also train ourselves to overcome our fears of financial management, or lack of money, or planning for the future. But to move past fear - to recapture the power we have traded away - we may first need to understand what is causing that fear.
Financial fears usually do not stand alone; they are rooted in more deep-seated anxieties. Some people fear loss, being wrong, being embarrassed, or failing. These fears may be rooted in our childhood, or we may have been conditioned to them over time. Still others get that gut-wrenching feeling because they believe they are "bad with money" but actually have had great difficulty with arithmetic. Or they are intimidated by people in financial institutions because they really dread the possibility of rejection by authority figures.Whether you are guided by deep-seated behaviors or general uneasiness, these fears can manifest themselves as indecision and doubt - attitudes that are counter-intuitive to developing a sound financial plan. Fear kills enthusiasm and thwarts action. It destroys self-confidence and limits creative imagination. It also exaggerates negative imagination until even a small occurrence can become the trigger for a major panic attack, as in the story that follows.
Nancy recently left her job at a law firm to start a new business as a freelance paralegal and researcher. She successfully launched the business and acquired several new clients. Everything seemed right on course, and Nancy was happy to be on her own at last. Then, one day, Nancy received a check for $3,500 from one of her new clients. She deposited the check and paid bills with the money before waiting for it to clear. Unfortunately, the check was returned by Nancy's bank for insufficient funds, leaving her without the means to cover the checks she had already written. Although Nancy thought her new client would replace the check, she went into a full blown panic anyway. The situation was inconvenient, and creditors to whom she had sent checks needed to be called, but Nancy treated the matter as a disaster instead of the learning experience it really was. She came close to returning to the security of her old job, but a colleague helped Nancy overcome her panic by reminding her of the determination she had mustered to start her own business in the first place.
Nancy's situation is a classic example of a fear blown way out of proportion to the event. The risks of such small events permeate all of our financial management - the financial world today is just too complicated and too multi-faceted to assure us of smooth sailing all the time.We can make errors in calculations, inadvertently pay a bill a few days late, be turned down for credit because of an error on our credit report, or receive a notice from a tax authority based on incorrect information. Any of these events can cause one's heart to skip a beat, but there are steps you can take to overcome your initial tendency to panic:
1. Do not stuff a notice or letter bearing "bad news" into a drawer or into some other place where it could remain hidden.
2. Read the notice or letter over and over again, until you are certain you understand what the communication is saying.
3. Do not jump to any conclusions until you thoroughly investigate the situation - the reality could be far different from what the letter or notice indicates.
4. If you need help, ask for it and do not feel ashamed. Chances are the person or persons you ask have experienced the same or a similar situation before.
5. Replace your fear, first, with the curiosity you need to get to the bottom of the situation; next, with determination to take care of it; and then with the focused passion you bring to any new set of circumstances that you must resolve.
6. Finally, do not procrastinate. Get going instead.
These are the very same steps to follow if you are fearful about applying for your first home mortgage, trying to pay down excessive debt, investigating a new job or career path, or just beginning to invest for your future. The alternatives to transforming fear into constructive action are simply not acceptable whenever our finances are involved. Even when we are afraid to try, we must try anyway. Even if we think we may lose what we already have, we must learn to invest anyway. Even if we are barely getting by, we must learn to make the changes that can improve our standing, our health, and our future. In other words, in this day and age, we cannot remain stuck in the status quo - fear or no fear - so learning to transform our fears is the best lesson we might ever learn.
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1. Manage your money safely and motivate yourself to spend wisely
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