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.
• Buying a house
• Saving for retirement
• Supporting the family
• Staying at home
• Estate planning or getting a Will
• Investing for the future
• Insurance planning
• 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.
17 replies to "My Greatest Financial Fears"
[…] presents My Greatest Financial Fears posted at KCLau’s Money Tips, saying, “Everyone will encounter several personal fears […]
i think some good UT companies gives equally good ,if not better returns than ASN,, ASD, or ASM. Why not try them out? If you r talking about capital guaranteed. Some has this features too. Thus I can’t understand why ppl are rushing and queuing long hours just to invest into ASM, ASD etc.
[…] presents My Greatest Financial Fears posted at KCLau’s Money Tips, saying, “Everyone will encounter several personal fears […]
[…] presents My Greatest Financial Fears posted at KCLau’s Money Tips, saying, “Everyone will encounter several personal fears […]
[…] presents My Greatest Financial Fears posted at KCLau’s Money Tips, saying, “Everyone will encounter several personal fears […]
[…] Financial issues impacting individuals beyond just the stock market. (KCLau’s Money Tips) […]
Jacquelyn, ar eyou sure non-bumi can purchase ASD..? i checked thru the ASNB website, the criteria is Bumiputra M'sia..>!!!!!!!
[…] talks about My Greatest Financial Fears posted at KCLau’s Money Tips. I think his fears are in all of us or else you wouldn’t […]
If you want your children to grow as financially responsible adults, I believe you must let them handle money often. At an early age, they need to handle money and understand the importance of depositing money in a bank on a regular basis. They also need to develop the habit of saving money for major purchases. These lessons will help your children develop a much more comprehensive understanding of money and how to manage it.
have to admit that with the way the economy has been going I’ve been so focused on my own budget and credit repair that I’ve completely forgotten to teach my kids money management. I found an article about teaching kids how to use money responsibly, and it was definitely a great reminder for parents everywhere, including myself. If I can teach my kids how to use money responsibly during a recession, they will be much better off, especially when the economy decides to turn around. I used to have credit problems, and if I could somehow prevent that hardship for my children, I would feel like an accomplished parent. There are too many kids that go out into the real world without understanding the value and importance of money. I won’t let my kids out from under my roof until they are prepared to handle their own finances. I really like the idea of setting up visual aids for my kids to learn money management. I need to figure out a way to use visual aids to teach my kids the consequences of using credit cards irresponsibly. I got in a lot of trouble using credit cards. I’ve used credit repair services to get myself back on track, but I don’t want my children to have credit issues to begin with.
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[…] presents My Greatest Financial Fears posted at KCLau’s Money Tips, saying, “Everyone will encounter several personal fears […]
The PNB account referred to here is ASD or Amanah Saham Didik. You can go to major banks like Maybank or Bank Bumiputera to open an account. To learn more about any conditions or restrictions, you may refer to the website, http://www.asnb.com.my
I wish to ask for your assistance on how and where to open the saving accounts (PNB account) for young children and any terms and conditions or restriction for these saving accounts.
Thank you for your timely and valuable information.
[…] presents My Greatest Financial Fears posted at KCLau’s Money Tips, saying, “Everyone will encounter several personal fears […]
Haha thanks.
Maybe that's because I am a single, frugal NEET who lives with my parents
If I have my own family, maybe my fear will be different.
I think it is advantageous to prepare for financial fear at young age
Thanks for your offer, it will be a great honour to write for your blog one day !!
My Greatest Financial Fears | Personal Finance Money Tips…
Everyone will encounter several personal fears as they go through their life phases. There is one fear which most of us will definitely have to deal with and that is financial fear. I have listed down below several financial fears that the majority of …
Hi Relax,
Your financial fears are quite unique. At the time other people are
afraid of not having enough money spend, you are worrying about not
having enough money accumulated. I would say it is several level
higher 🙂
Regarding your question, it is possible to get annuity like plan for
our children since born.
I love your sharing. You should write for my blog sometimes.
http://Kclau.com
Thanks for sharing.
My financial fear:
1) Can't become financially independant at young age
2) Can't become millionaire before old age
3) Can't own a house without debt
1) Can't become financially independant at young age
By being financially free at young age, many financial problems in the future will be minimized, esp. family related financial problem
Without it, financial life will not be headache-proof
2) Can't become millionaire before old age
If I can't grow big sum of money with such a long time frame, something is seriously wrong. The economy perhaps? Also with more money, I can leave stronger legacy to the society, such as having a fund to generate passive income that will fuel charity causes
3) Can't own a house without debt
I mean the house that I will live in, not the ones that I will rent it out and sell it one day..
I will delay gratification and pay the house in cash when I have enough money… the problem is…. how long to make that kind of money. Short term loan less than 5 years is an acceptable option.
A) Supporting the family
If I have children, I will open a fund and invest (monthly) for each of them, right from the moment they are born. Azizi Ali put money even before his daughther was born. Well, I do so because if I start investing for my children early, I can put in far little monthly capital than I start late (compounding effect).
I will put RM50 a month into each fund, in equity fund since it is a very long term investing.
The money can be used for anything 20 years later when they grow up.
If I am rich enough (I hope so), I will buy annuity for my children when they are born (is it possible to do so, KCLau?) to diversify their investment portfolio,
B) Staying at home
OK, that is why I want to be financial independant as young as possible and avoid things that take away my time from my family. I am puzzled why some financially free, or rich people are willing to work until they have no time to be with family. Is the love for work more important than family?