Are you scared of money?

This question may sound ridiculous, but the reality is that there are millions of people who are genuinely afraid of money. After years of research, psychologists now understand that some people have deep-seated psychological problems with debt, money worries and financial insecurity. Sound unbelievable? Then just take a moment to think about your friends, family and colleagues. Do you know someone who always seems to be having money problems? No matter how hard they work, how much they save or how much advice they seek, they always seem to be in debt, trying to scrape enough pennies together to pay the next bill or avoiding the next phone call in case it’s a creditor. Sound familiar? Know anyone like this? Ofcourse you do.

Whilst these people appear to be irresponsible with their money, the reality is that they probably have a deep-seated fear of money (and we’ll explore the different kinds of money fears later on). If you know someone like this, then you will know that they can drive you crazy with their money problems. They always seem to be asking for financial advice, but when you give them sound advice they tend to do the exact opposite. When you suggest a particular course of action to help get them out of debt, they end up buying something that they really don’t need and end up being further in debt. One day you are feeling desperately sorry for them because they are so cash-strapped, and the next day they’re wearing a new pair of designer jeans. Towards the end of the month, you give in to pity and buy them lunch. Then the next day you discover that they were out to dinner at their favourite restaurant.

So, how is it possible to be afraid of money? Money is an inanimate thing with no moral or ethical value. Can it really create feelings of genuine fear in a person? The results of many years of research show that the following are the seven most common money fears:

  1. I will never have enough money: Many people fear that they will never have ‘enough’ money without ever asking themselves how much is actually enough. There are people who fear that they will spend their entire lives working and have nothing to show for it at the end. As long as you allow money to control you instead of taking control of your money, you may always live with this fear. (In tomorrow’s ‘Let’s Talk’ we will explore the question “How much is enough?” in greater detail).
  2. I don’t know what I would do if I had lots of money: Whilst this is most often not a conscious fear, many people actually end up sabotaging themselves financially as a result of a subconscious fear of having too much. Just a thought: have you ever asked yourself what you would do with your day if you never had to work again?
  3. I don’t understand money and how it works: In our eight years of running our financial planning practice, we have come across countless people who avoided seeking the advice of a financial planner simply because they were scared they didn’t understand how money works. The result is that these people tend to abdicate all money decisions to someone else (such as a spouse or a family member), and as a result they effectively lose control of their own life direction.
  4. I have to be responsible for other people’s money and it scares me: How many of you are responsible for your aged parents’ finances, or even your domestic worker’s finances? It’s quite a daunting thought knowing that you are managing someone else’s life savings. This responsibility can cause immense fear, anxiety and stress which can negatively impact on your overall relationship with money.
  5. My money represents something important about me: Living in today’s consumerist world can be really tough – especially if your self-worth and your money are intertwined! The world seems to define ‘success’ in terms of how much money a person earns. If you think that people are measuring you in terms of your financial wealth then you need to take a long, hard look at yourself. Make sure that your self-worth is built on who you are as a person and not what you have in your bank account.
  6. I will lose my job and not be able to earn money: In today’s economic times, this fear becomes more and more real. There are literally millions of South Africans who live with the very real fear of losing their jobs through down-scaling or retrenchments. Whilst recession is a reality, it doesn’t prevent you from having a back-up plan. If you’re formally employed and even slightly at risk of losing your employment, start working on your back up plan now. Sit down with a friend, colleague or financial planner and start thinking about other ways of generating income.
  7. There is something wrong with talking about money: I touched on this issue in my previous blog (Talking to the Silent Generation) and yet this phenomena is not confined to the Silent Generation. The driving force behind creating this “Let’s talk about money” blog is the concern that people just don’t talk about money! Money is not evil, it’s not powerful, it’s nothing to be ashamed of! Let’s talk about. Let’s take control of it. Let’s make it work for us in a positive way.

Fear is a very strong emotion. In fact, it is such a strong emotion that it regularly overrides the intellect – especially when it comes to making financial decisions. Fear can cause a person to reach the most irrational conclusions even when they are faced with all the correct information. As a first step in understanding your relationship with money, it’s a good idea to look at how you related to money as a child. Was money the cause of tension, worry and sorrow in your household? If it was, there is a strong likelihood that you have grown up subconsciously believing that money causes tension, worry and unhappiness. Just think of all the “money” quotes and sayings that we grew up hearing – many of which are incorrectly quotes or quoted out of context.

“Money is the root of all evil”. Ever heard that saying? Well, that’s not the correct saying. The actual quotation is taken from the New Testament (1 Timothy 6:10) and it reads as follows: “For the love of money is the root of all kinds of evil. And some people, craving money, have wandered from the true faith and pierced themselves with many sorrows.” 

The apostle Paul was warning against the act of making money your god. His words are intended to caution people against coveting money and developing an unhealthy pre-occupation with money and wealth.

Ever heard the saying “Money is power, and power corrupts”? If you think about it – I mean, really think about it – this saying is completely nonsensical. Money has no power at all. It is a lifeless, inanimate object with absolutely no power at all. You can use money to wield power. You can use money to bribe corrupt people. But money, in and of itself, has absolutely no power whatsoever.

“Money will change your life”. Sure, having money can ease your burdens and make life more pleasurable. But it can also fill you with greed, corruptness and fear. So then, is it possible that money can make you happy and/or sad? Ofcourse not. The reality is that happiness is a choice that you make. With or without money, you (and you alone!) are in control of your own happiness.

Which leads me on the over-used statement that “money can’t buy you happiness”. Many of us have grown up with the belief that money and happy are mutually exclusive. But it’s not true. You can be wealthy and happy. You can be wealthy and miserable. The absolute reality is that wealth and happiness are completely unrelated, and the sooner you realise it the better. If you allow money to control you then you will be probably end up being miserable. However, if you are a strong person with strong moral values, you will take control of both your finances and your happiness. You can have both!

Lastly, I honestly believe that one of key ‘fear factors’ when it comes to money is that money decisions are in fact life decisions. Directing money towards a life goal is a serious thing. It means that you’ve assessed your life, you’ve documented your goals and you’ve committed money towards achieving that goal. Making conscious life decisions and putting financial plans in place to achieve them can be both emotionally and mentally draining – which is why so many people tend to avoid making those conscious life decisions in the first place – it’s too frightening!

We need to take the fear factor out of money. There’s no mystery to it. Compound interest may be the 8th wonder of the world, but it’s a perfectly understandable concept. Money cannot harm you. It’s a lifeless object and an essential commodity to survive in today’s world. You can choose to take control of your money, or let it control you. Once you have control of your money, you can choose to use it for great evil or to achieve indescribably good. The choice is yours.

Wishing you a super day!


You need to take the fear factor out of money!

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