Let’s face it, everyone (no exception here) will encounter several personal fears as they go through their life phases. These fears can be about their health, family’s well-being, job performance or security, personal relationship, etc. There is one fear which most of us will definitely have to deal with and that is financial fear.
As I read about other people’s financial fears, I discovered that they are quite similar to my own fears. I have listed down below several financial fears that the majority of us will encounter.
â€¢ Buying a house
â€¢ Saving for retirement
â€¢ Supporting the family
â€¢ Staying at home
â€¢ Estate planning or getting a Will
â€¢ Investing for the future
â€¢ Insurance planning
â€¢ Buying a car (or a second car)
The importance of each one will vary from one individual to the other. One person may place buying a house at the top and another may place it at the bottom of the rank. This just shows that every person is unique and will tackle their financial fears to the best of their knowledge or ability and in their own special way.
Out of the list above, my own fears are listed below in descending order of importance:
1. Supporting the family
2. Saving for retirement
3. Staying at home
4. Buying a house
Supporting the family
Before I had children, this fear does not exist and was not on my list. Now I have three kids to support and I realize that this has become a top priority. Parents possess an inner sense of responsibility and wanting what is best for their children and I am no exception.
Besides providing them with the basic necessities in life like food, shelter and clothing, I also want to give them a good education and a good financial head-start if I can.
I don’t have a fortune to my name but I believe in providing for my children within my means. Therefore for each of them, I opened up their own savings account (PNB account). In addition, I also purchased a health insurance cum education savings fund for each of them. I did this before they were even one year old. I feel secure knowing that I started to do something very early in their life and this is my way of addressing my top fear.
Saving for retirement
I started to worry about retirement when I had my first child. I was wondering whether I would have enough money for retirement while at the same time, I had to raise and support my family.
My approach in addressing this fear is straightforward and that is to put aside as much of my take home pay each month as possible. This normally ranges from 10 to 20% of my take home pay. For me, this is the simplest and easiest method to do and it works for me. I have direct control over my money and I decide how much to use for expenditures and how much to put towards my retirement fund.
Although I have my EPF savings to rely on, I know that the amount will not be sufficient after I factor in the cost of inflation. Early planning is my way of taking action to address my second top fear.
Staying at home
To be able to stay at home would be a nice goal to achieve. It would be great to be able to spend more time with the children and to be more involved in their daily lives. Unfortunately, after innumerable discussions with my spouse we conclude that I can’t afford to do it at the moment.
Realistically, we need our combined income to comfortably support the family and to meet all the other obligations. These various obligations are such as saving for retirement, contributing to the children’s education fund, paying the car loan, paying the monthly household bills and expenditures, etc.
So for the time being, staying at home is not a viable option. We will continue to monitor our financial situation and when the time is right, I will be able to take this step without fear or regret.
Buying a house
Buying a house and taking up a housing loan was one of our fears a few years ago. It required a huge financial commitment and we actually hesitated to take this step for awhile. When we took the plunge we decided earlier on that we did not want to be saddled with a big amount of mortgage debt. We decided to use some of our hard-earned savings to cover part of the house cost.
We took out a loan of 25 years tenure together with MRTA coverage for both of us. We were both committed to reducing the amount paid towards interest payment. Hence whenever we had the extra money, we used it for capital reduction. With the help of our EPF savings which covered about 35% of our total loan, we managed to repay the mortgage within 5 years time.
So I can strike out this one from my list of financial fears now. For the remaining three, we will continue to monitor and take appropriate actions and we are confident of the positive outcome. Addressing them early means we have a higher probability of succeeding rather than if we take a wait and see attitude.
What are your greatest financial fears? Please share your own financial fears and your unique way of tackling them.
This post is written by Jacquelyn Wong who is the author of the Secrets to Writing an Ebook in Three Easy Steps.