How to fix your biggest money worries

A new survey asks Americans what they fear most financially, and the results might surprise you.

By Stacy Johnson Apr 8, 2013 1:44PM

This post comes from Micheal Koretzky at partner site Money Talks News

 

Money Talks News on MSN MoneyLast Monday was April Fools' Day, but it was also the kickoff of Financial Literacy Month.

 

Two groups -- the National Foundation for Credit Counseling and the Network Branded Prepaid Card Association -- marked the occasion with their 2013 Financial Literacy Survey. Now in its seventh year, the survey asks Americans about their personal finance habits, hopes, fears and dreams.


"This year's survey results provided somewhat of a mixed message," says Susan C. Keating, the president and CEO of the NFCC. "More than one in four consumers indicated they are spending more than last year, yet 77% admitted to having financial worries, listing insufficient savings as their top financial concern."

 

Following are some common money fears, along with some advice if they have you staring at the ceiling at night.

No. 1. Fear: Not enough savings

While 57% of survey respondents said they’re worried about not having enough savings, the other data illuminate a glass-half-empty-or-half-full situation: 43% said they didn’t have a big enough "rainy day" fund, while 38% said they haven't saved enough for retirement.


But you could look at that the other way -- 46% think they do have enough in their emergency fund, while 62% think they have a solid retirement plan. Still, if you're in the hurting half, what do you do?


Solution: Automate. Take your discipline (or lack thereof) completely out of the equation by automating your savings. Save before you see the money by transferring it automatically from every paycheck into savings, either regular or retirement.


Image: Woman looking at coin purse © Meiko Arquillos, Getty ImagesNo. 2. Fear: Not being able to pay financial obligations

Americans are worried about paying off their credit cards (13%), student loans (8%), car loans (7%) and medical bills (6%).


"A total of 26% of U.S. adults, or roughly 61 million people, were worried about servicing their debt commitments," the survey extrapolates.


Solution: Divide and conquer. Make a list of all your debts. Then target one for destruction, focusing every dime you can find on it until it's dust. Then move down the line to the next one. On debt two, use every dime you can find, plus the old payment from debt one.


Using old payments to help eliminate debts is called snowballing, and it's a tried and true technique. And if you can't find extra money for debt destruction, start tracking your expenses, see where your money's going, then see if you can cut back somewhere. 


No. 3. Fear: Health insurance

"One in four U.S. adults (25%) are worried about health insurance," the survey said. And that covers not being able to comfortably afford it (19%) and/or not having it at all (17%).


Solution: Do the best you can. Everyone needs health insurance, so set aside some time to investigate your options. For example, a high-deductible plan may be more affordable. 


No. 4. Fear: Credit

The interesting news here wasn't that 19% “were worried about their credit score and/or lack of access to credit overall,” but that 65% of adults haven’t reviewed their credit report in the past year  and 60% haven't checked their credit scores.


Solution: Knowledge is power. To see your credit history for free, go to AnnualCreditReport.com. Credit scores aren't typically available without cost, but since they're based on your credit history, do what you can to make sure it's accurate, pay your bills on time and wait. Time heals all wounds.


No. 5. Fear: Job loss

"More than 42 million Americans indicated fear of job loss as a major concern,” says the report, based on 18% of respondents expressing this fear.


Solution: Keep your eyes and ears open. The trick to alleviating the fear of unemployment is ABL: Always be looking. Keep your résumé updated, your networking skills sharp and your fingers on the pulse of the job market. 


No. 6. Fear: Foreclosure

Pulling up the rear, only 4% of Americans are worried about losing their home to foreclosure -- “undoubtedly a positive signal for the housing industry and the economy as a whole.”


Solution: Never surrender. It's easy to give up the fight and your keys. But you have rights. Contact a free HUD Housing Counselor and your mortgage company to see if you qualify for a loan modification program.


What, me worry?

One final conclusion: The survey revealed 20% of adults claimed to have no financial worries at all. 


The authors declare that's "a strong sign of consumer confidence." But there are always people who are well off, as well as those who simply don't fret over things they can't control.


More from Money Talks News and MSN Money


 

VIDEO ON MSN MONEY

1Comment
Apr 9, 2013 10:39AM
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I'm glad to see more advice columns recommending to automate savings.  Personally, I was a lousy saver until I began doing that: after a while, you think of it as a bill you have to pay and you adjust your spending accordingly to live beneath your means.  I did not find that manually increasing my bank savings account worked, so I set up a Roth IRA at a mutual fund company.  Many such companies used to waive the minimum amount required to open an account if you set up automatic monthly purchases.  Some still do for retirement accounts, but no longer for regular accounts.  Company DRIPs (Dividend ReInvestment Plans) still do: you can set up $25 to $50 monthly minimums with no initial minimum deposit with NO purchase commissions or fees (dividends are reinvested with no fees as well) for some great company DRIPs like Exxon Mobil, Abbvie, and Abbott Labs at computershare.com, Cracker Barrel Old Country Store and Duke Realty (a REIT) at amstock.com, and General Mills at Wells Fargo's shareowneronline.com.  Some may require a $10 setup fee and it usually costs $15-$25 to sell some or all shares, but those are the only fees most investors would encounter.
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