Are You a Financial Scaredy-Cat?

On my very first day reporting from the floor of the Chicago Mercantile Exchange, I wasn’t nervous. I had done all of my homework, researched the market trends for that year, month, week, and day and outlining all of my talking points. I was primed to show those Wall Street boys who was boss.

But back home at my new apartment, things were different. When faced with my own financial picture, I wasn’t just nervous.

I was terrified.

At 18 years old, with student loans and mounting credit card debt to my name, I couldn’t help but think the worst. Will I ever be able to pay off my fancy Medill education, let alone set aside enough money to retire someday? What if I get fired, or lose my health insurance? If something big happens, like a car accident or major medical issue, how will I pay for it?

I’ve since spent a lot of time with other women discussing their personal finances, and it turns out that I wasn’t alone. But living in fear is no way to live. So it’s time to put on our big girl undies and address some of those fears head on. Here are some that I get all the time:

“If lose my job my life is over.”

WRONG-O. This particular job is over, sure, but your life can and will go on…and you might even be better off than you were before. Hopefully, you’ve followed my advice and squirreled away 3-6 months’ worth of expenses in case this very thing happened. But if you haven’t, you’re still going to be okay. Now is the time to get scrappy. First off, ask your HR department if there is anything they can do to ease the transition. Pensions have gone by the way of the Blackberry, but you still might be able to negotiate for some severance pay or maybe even a part-time position while you look for a new job. The point is that you won’t get any of these benefits if you don’t ask; so swallow your pride and ask for it. If you’re cut off completely, look around for ways to make some extra money on the side to pay off your essential expenses like rent, food, and transportation. Have a passion for sports? Try reffing local high school or college games. Can’t function without your morning latte? Put in some time as a barista at your favorite local spot. Look into Odesk and Elance for freelance writing and editing opportunities. Who cares if you’re overqualified; you’re also going to be broke soon if you don’t do something about it. Plus, it will be much easier to find a new full-time job if you aren’t so stressed about paying the bills in the meantime.

“If the market crashes I’ll be screwed.”

I’m tired of the studies and news reports that show how much less confident women are than men when it comes to investing. If you want a real reason why this should stop other than rah-rah girl power stuff, then here it is: women live longer than men (five years on average). A) Yay us. B) That means we’re going to have a longer retirement, which means we need to have more money stashed away than men. So get out there and start investing! Being scared of the market tanking is the lamest excuse I have ever heard for sitting out all together and letting your money stagnate in a regular savings account which won’t even keep pace with inflation. Find a good discount brokerage like E*TRADE, TD Ameritrade, Fidelity, Charles Schwab and Scottrade (BTW: I am not affiliated with any of these brokerages in any way; I just like what they have going on!). These are typically do-it-yourself operations (although some have offices in large cities where you can sit down, talk to a representative, and get help opening the account). At $8-10 per trade this is a great way to get yourself started in investing. Start out conservatively and see how you do. Just remember: the more skin you have in the game, the greater the risk—but the greater the gain, too. All investors have to weather a few bad storms, but keep a long-term strategy and you’ll be just fine.

“If something happens to my spouse/partner or we get divorced I don’t think I’ll be able to recover.”

Which is why you need to be able to stand on your own financially with or without your partner. I see this happen all too often: women wait until one of the two D’s strikes — Disaster or Divorce — and then decide to get their finances in order. Too little too late. The time to start is now. If you’re already in a relationship, have The Talk about your finances, including how much you make, what your ideal budget is, how much debt you have, and the kind of life you want to live someday. Have this talk regularly so you can adjust to any changes in your (or his) financial situation and lessen the risk for disaster striking from out of the blue (because let’s be honest, it’s rarely truly out of the blue). Make copies of both of your most recent tax returns, bank statements, retirement statements (401(k), IRA, etc.), investment statements, mortgage statements, and life insurance policies and store them in a safe place. Should something happen or the relationship go south, you might only have access to your own, which doesn’t paint a very accurate picture of your life together. Hopefully you won’t need them, but if you do you’ll be glad to have everything organized and in one place. And I’ve said it before but I’ll say it again: keep your own 3-6 months’ worth of expenses in the bank, in a separate account from his, just in case you need your own stash down the road.

“If debt collectors call me I’ll cry.”

Please. Approximately 30 million Americans have at least one debt in collection, which means that lots of people are getting these calls all the time. The call itself is one thing, and of course you should try to avoid it by paying your bills on time starting with the highest interest rate (typically credit cards) first. But the real difference comes in how you handle the call.

As a consumer (even one with poor credit) it is not just your power, but your right, to negotiate. Fight for your money! First, ask for an itemized statement to check for any errors (they’re way more common than you would think; for example, 80% of medical bills contain errors). See if you can haggle the bill down to a smaller amount in exchange for paying in cash, or if you can spread the payment out over several months instead of paying all at once. If the bill is for multiple services, such as a hospital bill or cable/TV/internet services, see if you can bundle those services into one low rate instead of paying for each service individually. The main thing is to remain calm and pick up the phone. Debt collectors will be more likely to work with you if you are forthcoming, honest, and reasonable, and less likely to offer you a deal if they have to hunt you down.

See? Your finances don’t have to be scary. Like anything in life, you just need to do your homework, be prepared, and face them head-on. Who’s afraid now?

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