Help! My Money Scares Me!: Tips for Educating Yourself Without Feeling Overwhelmed

by Sarah Winfrey on 12 September 2008 3 comments
Photo: [nati]

Do you feel lost at the very idea of having a budget, let alone a comprehensive financial plan? Does it make your head hurt to think about how much you make and how much you spend? Does keeping track of your finances make you tired?

Relax.

Breathe.

Listen.

It's not as scary as it sounds. it's not as scary as it looks. In fact, planning where your money goes doesn't have to be scary at all. 

When you hear someone talking about money in ways that are foreign to you, or read things in a magazine or on the internet that you don't understand, it's natural to feel lost, sick, or tired. The fact that others understand it and it's about money makes you feel like you should know what's going on, and the fact that you don't makes you feel inadequate, stupid, or not good enough. That's the cycle, but it doesn't have to be like that.

Instead of listening to what others say, go out and make your own financial plan. Make one that reflects your lifestyle, values and personality. It's totally possible, and the suggestions below will help.

Relax

Never deal with financial issues when you're feeling negative emotions. Even if your negative emotions are about your money, it's possible to step outside, take a walk or at least a couple of deep breaths, and let those feelings go. Once you've done that, you'll be able to approach a financial plan, whatever that means to you, with a clear head. You'll be able to process the information in front of you and make decisions based on what you see there, not on what you feel.

Learn

If you don't know where to start, look to the Internet or go to the library and ask a Librarian. Money and financial planning isn't any more difficult than high school algebra, and you passed that! You can totally do this. If someone uses a term you don't understand, look it up. If you hear about a new investment, do some research. Even if you don't have a budget and you've realized you need one, you can find easy, detailed instructions for making one in so many places.

The key to learning more about money is realizing that it's not beyond you. Sure, you don't understand it now, but that's because you haven't looked into it. Once you have, you'll be the one tossing words around that other people don't understand. All it takes is a little time focused on learning about money, and you've got it made.

Examine

Once you've gathered information, look at your own money in light of what you've learned. Is that new type of investment appropriate for where you are in life and for your goals? How do you have to adjust your budget if you have an irregular income?  This is where your new knowledge and your actual life situation interact. It's not enough to study, you have to figure out if and how the information you learn is relevant to you. 

Act

Now that you not only know more information, but you know how it applies to you, you're ready to implement what you've learned. Sometimes, this means doing nothing. Even then, you're still acting. You're choosing not to explore a certain option at the moment because of something that's particular to your current situation. Other times, acting means that you make some changes. Maybe you implement that budget, or reallocate some investments. Maybe you talk to a broker or decide you want even more information. Whatever it is, you do it.

Now, that wasn't so bad, was it?

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Guest's picture

This is a great way to start off! It always helps to be open-minded as well. If you read something that you think that it may or may not work - try it anyways! You never know, it could be the one thing that you need!

Learning about money to some people means knowing the difference between a dime and a nickel. However, there's so much more. Which bank should you have? Where should you get your loans from? Learn as much as you can about anything that you can. It helps in making educated financial decisions.

Examining your spending is great. My husband and I sat down one night with our check register, and we took different colored highlighters and highlighted bills with one color, other needs with a different color, eating out with a third color, and so on. We were surprised how much was not really a necessity!

Sarah Winfrey's picture

I love you highlighter idea, Amber. I bet it really helped you SEE where you were spending money...so cool.

Guest's picture

Great points Sarah--I help people with financial issues as well, and usually it starts with something as simple and basic as health insurance.

In 11th grade, I took a consumer economics class and we had to do a budget. It was at that point I realized, I could never live like that. So I kept it simple for years and overall it has worked. Spend less than you make, and put some aside. Well, as expenses have shot up in these inflationary times, it's not always as easy.

People have to have health insurance, if they have families they need to add in life insurance. And if you think the government is going to sufficiently take care of you in retirement, ask the tooth fairy for an advance on your dentures--won't be happening. PLEASE access whatever retirement plan options there are for you, whether a 401k or 403b at your job, an IRA or a Roth IRA on your own, a SEP IRA if you are self employed, just do something!

Colleen King
http://CKingInsurance.com