The 4 Biggest Financial Fears—And How to Conquer Them


Freaked out by ghosts and ghouls? They don’t have anything on chrometophobia, or the fear of money.

In fact, if you let money matters like setting a budget or taking a peek at your credit report scare the bejeebers out of you, you could make some truly fearsome financial decisions.

That’s because, while we no longer contend with saber-tooth tigers on our daily commute, our brains still react in the same way to anything we deem threatening–including financial threats. “As far as the brain is concerned, a threat is a threat is a threat. And instinctively, it pushes us to avoid these threats as if they were threats to our lives,” says Simon Rego, Psy.D., director of psychology training at Montefiore Medical Center/Albert Einstein College of Medicine.

John Sharp, M.D., Harvard psychiatrist and author of “The Emotional Calendar,” says the one of the most difficult fears to discuss is worry surrounding money. Usually this is because of fear–fear of inadequacy, lack of planning or lack of confidence.

RELATED: How I Conquered My Money Fear By Starting a Money Club

In the spirit of conquering fear this Halloween, Sharp and Rego weighed in on how to keep from falling victim to the four most common financial fears, which plague most of us at one time or another.

1. The Fear of Budgeting

Budgeting is very scary to many people – of all ages, and from all walks of life, says Kevin Gallegos, vice president of Phoenix Operations for Freedom Financial Network, who helps clients evaluate debt repayment options. “People think setting a budget is more complicated than it needs to be, or that it will restrict them too much and ‘curb their style,’” he says. In fact, budgeting tells you exactly what you have so you can spend (and save) with confidence. But that doesn’t matter if sitting down to balance your bills makes you break out in a cold sweat.

Face the fear: “The best strategy for this fear is something called graded exposure,” says Rego. “This means you gradually, systematically and repeatedly face your fear.” Do that by breaking down the task into not-so-scary, bite-sized piece, he advises. Instead of trying to set a yearly or even monthly budget, start by setting a budget for tomorrow. Do that for a week or two, then move on to setting a weekly budget. (The Money Center can help you do all of this automatically.) Over time, you’ll kick your fear and be on your way to a bottom line that won’t scare your pants off. Honest.

2. The Fear of Being Honest

Tempted to “hide” a purchase from your spouse, or fib about the new credit card you opened to score a discount on your kid’s Halloween costume? It’s known as financial infidelity and it’s a very common habit in relationships. “Fessing up to a spouse or significant other about splurges, spending or other financial matters is a common fear,” says Tim Brinkmann, Certified Credit Counselor at ClearPoint Credit Counseling Solutions in St. Louis, MO. “I’ve had a few clients who have explicitly told me not to include their spouses as co-applicants [for debt counseling] for fear of a ‘discussion’ about overdraft charges, charged off credit cards, etc.”

RELATED: How Money Is Ruining My Marriage

Face the fear: Both men and women may be afraid to be honest, says Rego, but honesty truly is the best policy. The path to honesty starts on neutral ground. Face this fear by asking your mate to meet for coffee; Rego explains that there’s less chance anyone will boil over in front of a barista. Then start by setting ground rules that you won’t judge each other, but will instead work toward better communication to avoid the need to fib about your finances in the future. One way to avoid little white lies is to make sure you manage your money in a way that works for both of you: Here are six different ways to combine your finances as a couple.

3. The Fear of Using Credit

While many people go overboard and carry too much credit card debt, others are afraid to get a credit card or use credit at all. But credit agencies rely on past payment history to gauge how borrowers will do in the future, says Brinkman. If you don’t borrow, they have no information to rely on, and, in future, you could face bigger impediments, like not being able to buy a home. Paying student loans, car loans, and other bills on time (and in full) helps build a credit history, and a better score,” says Brinkman.

Face the fear: Rego suggests analyzing what you predict will happen if you get or use a credit card. Are you worried that you’ll spend yourself into debt, or that if you apply for a card and get rejected, you’ll feel bad?

If you’re too terrified to apply for a card, you can check your credit score for free at and see where you stand. If you don’t trust yourself to manage spending, you need to confront that fear directly–by putting yourself in the scary situation. “Get a credit card with a low limit and only carry it in certain situations (for instance, to the grocery store and gas station) to test your discipline and overcome your fear,” says Rego. By tackling this fear in stages, eventually you’ll be able to trust yourself with credit and use it wisely—which will benefit you in the long run.

RELATED: Everything You Need to Know About Credit

4. The Fear of Reviewing Your Bills/Bank Statements

Avoidance–in the form of letting bills pile up, or turning a blind eye to reviewing bank statements or your credit report–can be devastating to your bottom line. Not looking over bank statements can lead to paying exorbitant overdraft fees, not having enough money to pay bills on time, or missing critical errors in your credit report, which does happen. Besides, avoiding your finances doesn’t make them go away, it only compounds your anxiety, instead of what could be in your interest-bearing savings account.

Face the fear: Tell yourself that not knowing is worse, says Sharp. “Then bravely get support from a trusted financial advisor, accountant, banker, lawyer, or a friend to help you review and interpret your financial documents.” No matter what you find, Sharp says only through knowing what the situation is can you deal with it and work toward getting on stronger financial footing.

  • Hilary Martin, MBA, CFP®

    Hmmm….. Fear #3 is strange. I promise it’s possible to be completely financially free if you never once use a credit card! 

    • Thevail

       That’s absolutely true! BUT…for most people there will come a point somewhere along the line where you’ll need a credit card, whether it’s to book a room for your nieces wedding in another state, or rent a car, or replace a picture window or refrigerator RIGHT NOW. But even if you never needed a credit card, having an irrational fear of having one does tend to argue that a person at the very least has unresolved questions about their own ability to control their behavior, which should probably be addressed.

      • KW

        I waited until after college to apply for a credit card. Then, I got one with a low limit and only use it for gasoline and food. I felt I had a rational fear in college for not having one when my friends all had one and showed irresponsibility. Now, they are paying off that incredible debt, and I have a credit card to use for needs, not wants. For me, a credit card was all about timing. When I was less influenced by cultural/social expectations to “have it all”, I got one. I do not have unresolved issues about spending control, just knew that I would not have the maturity at 18 to handle social pressure when it comes to spending.

        • Ahlynch

          I’m curious how that has affecte dyour credit score, I have read (I don’t remember where, so not sure this is credible) that if you use a credit card for essentials (gas, grocery) rather than luxury items (hotels, airfare) that credit rating agencies rate that as less credit worthy (I suppose because it looks like you don’t have enough cash on hand for the basics).

          Does anyone know if this is true?

          • LeAnne

            This is not true… kinda.

            Let me explain: Your credit score will not be affected in any way by the type of purchases made by your credit card.  Your credit card company will only report to the credit agencies your balance, the type of credit extended, your spending limit, how long you’ve had the card, and whether or not you’ve been paying your bills on time.

            However, the bank with whom you have your line of credit may track your transactions and cut or close your line of credit based on the the risk they see in the type of transactions you have.  Though I do not have any knowledge of the inner workings of their algorithm, my common business sense tells me that someone who pays only for essentials would not be someone to whom I would want to deny credit.  Someone who starts to spend increasingly higher amounts at bars might show signs of a possible alcohol problem which might make them less credit worthy in the future.  However, I would think that the type of transaction is much less important than the ability to pay.

    • LeAnne

       Given your credentials, I am sure you know of the many reasons why responsibly using a credit card is beneficial including:
      being able to track spending,
      the time value of money,
      building credit which will save you on interest if you purchase a house,
      the purchase protection offered,
      the travel protection offered,
      the incentives given to use the card,
      and many more benefits that you do not get from using cash or a debit card.

      Sure, it’s possible to be financially free without a credit card.  It’s also possible to be financially free while using a credit card. 

  • Daisy @ Everything Finance

    There are a lot of financial fears such as never being able to stay out of debt, fear of emergencies, etc. They can be really detrimental to the emotional and mental health of the person. Conquering financial fears is possible by learning about money.

  • AMF is a little misleading, it only shows you what they believe your score would be if you pulled your actual credit score.  My husband had no credit cards and all the bills were in my name.  We started the process of buying a home and the lender asked what our scores were.  I used CreditKarma and we both had decent scores.  When it came time for us to make an offer and the lender pulled our actual scores, my husband had no score at all even though he had one with CreditKarma.  We were unable to get a loan until he opened a credit card and created some history.