Overcoming Financial Fears

To some women addressing this topic can feel more unpleasant than enduring a root canal. For most, the only thing worse than saying the “F word” (Finances) is having both F words staring you in the face when you open your computer (Financial Fears).

I have had the privilege of serving women professionally in the financial industry for the past thirteen years, the last five of which have been dedicated to serving women post divorce as a Certified Divorce Financial Analyst.  This means ensuring we have a solid financial plan set up for them to sustain their lifestyle, supporting their needs and dreams throughout their lifetime,  and meeting the ultimate goal of leaving a legacy for their children and/or charity in accordance with their passions.

Having witnessed firsthand what most women go through emotionally when ending a marriage, creating a plan to start a business/nonprofit, or sending their children to the college of their choice has put me in a unique position to identify what drives women to make financial decisions from a perspective other than my own. Many women don’t even have the luxury of making these decisions at all. This was the case for Rose (not her real name to protect identity).

Confronting your Financial Standing: Rose's Story 

I worked for three and a half years as a Financial Specialist at a bank in my early twenties. It was there where I met Rose and her husband Harold (not his real name to protect identity). Harold and Rose were your traditional World War II, "Greatest Generation" lovebirds. They had been married for at least 50 years and raised a beautiful family. Harold excelled in his financial knowledge and even played a key role in opening the original bank I was working for at the time, before the bank was taken over by the larger, corporate bank I was employed by. The two would frequent the bank to withdrawal their required minimum distributions (RMDs) from their individual retirement accounts (IRAs) and renew their certificates of deposit (CDs), among other banking business.

Rose was one of the kindest women I had ever met, and she made an effort to develop her relationship with me. She trusted Harold deeply with their finances and respected his talent with investing, thus feeling little need to learn anything regarding their financial affairs. “Harold has it covered,” she would say. Harold urged her to at least learn the basics in case anything ever happened to him, so she would at least have a basic grasp of what was going on.

Unfortunately, Harold unexpectedly passed away of a heart attack one day. Rose was absolutely devastated, as she had just lost the love of her life. Facing the pain of losing her soulmate was more than she could deal with. Now Rose had to navigate the finances and play detective to locate each account Harold had set up for them. I was able to help her with everything she had at the bank and walked her through how an IRA worked. It took about four months for her to grasp the concept of the RMDs mandated by the IRS, as she kept asking me why the IRS would require her to take her money out of her own account. As we continued to work together, she became more confident about her situation and her ability to learn and become financially savvy.

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One day, Rose opened up to me about the real reason she didn’t play a role in the family finances. She shared that she always used the cliché excuses of, “Harold is the financial genius and that’s his area of expertise” and “women in my generation just don’t focus on the finances as much as our husbands.” However, as we continued to work together she shared her fear that the day would come that Harold would leave the earth before her. She was afraid she wouldn’t know how to manage the financial legacy he had built for them, and that she would make so many mistakes she would become a financial burden to her children. This fear was so unbearable that even entertaining the idea of trying to learn about their finances while Harold was alive petrified her. Rose felt that by brushing the issue under the rug and avoiding it, she could prevent it from happening.  She told me that she wondered how many other women out there might feel the same, and how many were not as fortunate as her to have such a loving and honest support system. She asked if I would consider providing the financial literacy I taught her to as many women I as I could to empower them and prevent them from feeling the same paralyzing fears. I made a promise to Rose that day, and I intended to keep that promise.

3 Ways to Overcome Your Financial Fear

Fast forward about nine years to the year 2014, when the Women’s Education and Leadership League’s founders and I began our financial literacy focus groups and research. By this time, I had the privilege of serving women from all walks of life, from every generation, a wide range of backgrounds and economical conditions. Something I discovered in all of these experiences and hours of research is the two primary fears women from all backgrounds face are the fears of becoming a bag lady or a financial burden on those they love and care about.

Here’s the good news: what I learned through all this research and experience is that overcoming these fears is easier than it seems. There are three things we as women can do immediately to start to transition from our fear of becoming a bag lady or in some cases worse, a burden on those we love and care about most.

1. Create the Right Mindset

Before you can master any skill, you must believe in yourself and your ability to master the skill. Out of the four months I worked with Rose on mastering the structure and rules of an IRA, two of those months were spent convincing Rose she was worthy of learning and managing her finances in Harold’s absence. When it comes to mastering our finances, eighty percent of it has to do with our psychology and only twenty percent is the mechanics of it all. Overcoming the emotion of fear is step one. I’ve heard many acronyms for FEAR, but the one I love most is: False Evidence Appearing Real. What this means is most of the time our fears are actually tricks our minds play on us. For example, Rose was not a financial burden on her family. In fact, as she became more and more interested in learning about her finances, she felt more and more confident to set up a plan.

This plan is now a legacy that will pay dividends to her heirs for several generations, a legacy that she knew would have made Harold very proud. The quickest way to get in the right mindset and overcome the fears of financial scarcity is to find yourself into a state of gratitude. What your mind is focused on will attract and filter out other possibilities, good or bad. The mind can only experience one emotion at a time, therefore fear and gratitude cannot coexist in the mind. There are countless ways to practice gratitude.

Personally, I love to start my day with uplifting music and think of three things in my life I’m grateful for, something from my childhood or past that was so special, and an accomplishment or coincidence.  I love coincidences because we do nothing to create them, they just are. Next, I focus on something small I am grateful for like the wind on my face or the joy my little ten-year-old yorkie/maltese mix, Jake, exudes while on a run. I then think of three people in my life I am thankful for or wish to send gratitude to. Finally, I imagine three future events, envision them going well, and feel the feelings of gratitude as if they were accomplished successfully and with great joy. 

The more you choose to live in a state of gratitude and focus on being thankful for what you already have, the more financial abundance you will have and you will attract even more positive things to be thankful for.

2. Mastery Breeds Confidence

 After consistently obtaining a grateful and positive mental state, you will be ready and more open to learning. Mastering financial literacy is key to demolishing your financial fears. I will be teaching a free class on financial literacy during our Financially WELL workshop on March 9th at 6pm. You can register for the class on our website, www.well4women.org. We will provide you with guidance, resources, and financial education geared towards how we as women process and take in financial information. This class is going to be fun and interactive, and you are sure to leave feeling much more confident in your financial literacy and understanding. For those who cannot attend our Financially WELL workshop in March, I will post a financial literacy blog on our website and social media outlets containing a sizable chunk of the information and resources we will be teaching in our class.

3.  Proximity is Power

Having a financially savvy mentor to help guide you and pave the way to your own financial success is key. Leader and best selling author, Jim Rohn, is quoted saying, “You are the average of the five people you spend the most time with.” I doubt he is advising us to dump our friends and family members who may have different ambitions and goals as we do. However, I do think he is compelling us to elevate our peer groups and spend more time with people who are doing the things we dream of doing and creating a secure financial future for their families while doing them. I know it’s difficult and sometimes scary to go out of your comfort zone and ask someone you admire to mentor you, especially if that relationship isn't developed.

A good way to develop a relationship with someone you wish to learn from is to find a way to serve them first. If you’re passionate about baking and you dream of opening your own bakery, research bakeries that have a similar essence to the bakery you dream of creating. Apply for a job at that bakery, or if they aren’t hiring, offer to volunteer at charity events they are catering for. Volunteer for positions that will have you working directly with the owner if possible. Those who are accomplishing great things are typically very open to sharing and investing in serious protégés.

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With the right resources, experts, and mindset; anyone can not only overcome their financial fears, but become financially empowered. I feel it is my mission in life to end financial suffering for women and to empower women to never feel they have to make a compromising decision or forgo their dreams as a result of a fear and/or lack of financial understanding. All women have the ability and capacity to be financially empowered and confident enough to build a legacy for the generations that follow.

 

Alana Scott, CDFA

Founding Member - Women’s Education and Leadership League

 

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