5 Money Fears Many Of Us Have—And How To Overcome Them
This post originally appeared on girlboss.com.
As we move the convo about economic equality forward, women are inevitably faced with concerns that their mothers and grandmothers didn't necessarily grapple with. Here are some of the most common, according to financial experts, as well as how you can overcome them.
There’s no denying that the centuries of patriarchy has taken a serious toll on women when it comes to financial inequality. According to a 2015 studyconducted by the Global Financial Literary Excellence Center, only 22 percent of US women were found to be financially literate, as opposed to 38 percent of men.
This disparity factors in significantly when considering the progress women are making in terms of gaining more autonomy and power in the economy. A 2015 study from the Center for American Progress indicates that 42 percent of white women are the sole or primary breadwinners in a family, and nearly 71 percent of black women and more than 40 percent of Latina women bring home the majority of their family’s income.
It’s a recipe for a shakeup that—while long overdue—comes with a fresh set of obstacles that give rise to a fresh set of fears.
Here are some of the most common misgivings women are currently facing, according to financial experts, as well as how to confront them head on.
“My debt is going to bury me alive.”
Credit card debt in the US recently surpassed $1 trillion at the end of 2016, and it has the younger generation a little spooked: According to a 2016 Bankrate survey, less than a third of millennials have a credit card, whereas over 70 percent of people over the age of 65 do.
This fear of amassing additional debt via credit card spending is in large part due to those huge student loan bills hanging over our heads, which stacks up at $37,000 on average, as of 2016.
Still, Toneisha Friday, certified financial education instructor and founder of financial education platform Coin Financial, stresses that using credit cards shouldn’t automatically be a frightening prospect, so long as you’re using them as intended. “Credit cards aren't meant to cover you when you have no money; they are meant to help build healthy credit so you can purchase big ticket items like a car or a home,” she says.
For those young people who do take out lines of credit, she acknowledges that the reality of what that money actually represents can sneak up on you. In the instance that clients come to her with this concern, she recommends:
“Start paying down the credit card with the lowest balance first,” she says, referring to what is commonly known as the “snowball method.” “That way, making payments become routine and you see an immediate decrease in the amount you owe.”
“My financial situation is going to ruin my relationship.”
According to a 2012 study conducted at Kansas State University, couples who argue in the early stages of their relationship, regardless of income, debt or net worth, are at greater risk of divorce.
It’s something that Priya Malani, founding partner at investing education platform Stash Wealth, sees all the time: “A lot of women come to us for a financial plan because they sense their [partner] is going to propose soon, and they want help getting out of credit card debt before they do,” she says. “More often than not, they feel ashamed about their credit card debt and want it gone before saying ‘yes.’”
Malani likewise notes that because of this sense of shame, many of the women she sees have not revealed how much debt they’re in to their partner. But she emphasizes that should this be the case, communication and honesty are key.
“Discuss how you ended up with credit card debt,” she says. “Was it because you were out of work, had medical issues, etc.? Framing why you have debt can have a big impact on how it's perceived,” she says. But whatever that reason may be, putting a plan in place is the next vital step.
“Don't just drop the bomb that you have credit card debt. Show that you’re responsible by laying out a plan and strategy for how you're working to pay it off. Maybe you've transferred the balance to a card [that offers a 0 percent APR promotional period], or you are putting X amount per month to the balance and will have it paid of in X months. Showing you take it seriously and are responsible is reassuring for the other party.”
“I’m never going to be able to afford to retire.”
When you’re in your 20s, saving for retirement doesn’t always seem like the sexiest thing you can be doing with your money. And especially in the instance that you’re working a job that doesn’t offer 401(k) benefits, it can be hard to know where to start. But as Friday notes, the realization tends to become infinitely more pressing once you’re in your 30s and you realize that hey, time flies and retirement really isn’t that far off.
“At that point, you start to realize how much more money you should be contributing to your retirement fund and the lack of investment made over the last 10 years,” says Friday. But getting started a little later than what would’ve been ideal is better than never.
“I recommend that my clients start reviewing their monthly budgets—and if you don't have one, start making one, fast!” she says. “Reviewing your monthly budgets allows you to see how much money you really need monthly to survive. Then, when you go into your Roth IRA or 401K and contribute, you can calculate the correct percentage based on how much money you make.”
In the instance that you don’t have a job that offers a 401(k) match or you’re not quite prepared to open a Roth IRA, Friday recommends setting up a special savings account: “You can always start saving in an interest-baring savings account that you don't touch. Get something virtual, like Barclays Online, so you're not tempted to drive there and withdraw money from the ATM. “
“I want to have kids, but it’s going to kill my career (and thus, my financial independence).”
In the wake of complex debates about “leaning in” and how realistic it really is for women—across race and socioeconomic classes—to “have it all,” what we can agree on is this: It’s complicated AF. Maternity leave in the US still sucks, and for women who are deciding whether or not to have children, it informs some of the biggest life decisions they'll ever make.
“Whether you’d like the flexibility to take a long maternity leave or you’re thinking about raising your children for a few years before returning to your job, or leaving the workforce all-together, there are a ton of associated fears with this one,” says Malani. In order to broach this complex topic, she notes that it requires some honest assessment: “Decide whether you’re doing this because you want to or you feel you have to—especially if you’re basing your decision on finances,” she says.
“Things like nanny-shares are becoming more and more popular in urban markets.” And for those for whom enlisting paid assistance isn’t an option, she emphasizes the importance of community:
“If you’re leaving because you have the desire to be a primary caregiver, take some time to find a circle or support. Many women report this as a very lonely time, despite it being fulfilling in other ways, and having a support group can make all the difference.”