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NFCC Says Majority of Consumers Fear Running Out of Money

[Tuesday, November 11th, 2014]

When it comes to fears, there’s one thing that many people find scarier than spiders, the dark, and public speaking: running out of money.

A recent survey by the National Foundation for Credit Counseling (NFCC) showed that 92% of respondents are afraid they will one day run out of funds.The reasons for their fear were different, and ranged from not being able to pay their bills to not being able to comfortably retire. When asked to choose from the following options, this is how people responded:

I’m afraid I won’t have enough money:

  • To pay my bills each month – 64%
  • To retire comfortably – 14%
  • To cover unexpected expenses – 11%
  • To pay for my children’s education – 3%

The remaining 8% said they did not fear running out of money.

The NFCC’s Gail Cunningham said that the fact that more people were afraid of not being able to pay their bills, rather than focusing on long-range planning like paying for their kids’ college and funding their retirement, emphasizes the fact that many people are living from paycheck to paycheck and struggling to meet their financial obligations.

She offered five steps for folks to get a grip on their financial fears:

  1. Keep track of spending. Find out where your money is going, says Cunningham, and take a hard look at every penny. Have the whole family write down their spending for 30 days and have a family meeting to review the results at the end of the month. Figure out where you can make cuts and put the money to better use.
  2. Set up a cash-flow calendar. Record all income and expenditures on the calendar so the family can easily see where money is coming in, and where it’s going.
  3. Save up. Open a savings account and try to accrue enough savings to last for at least one month.
  4. Make a dent in debt. Carrying a balance on your credit cards from month to month is expensive, if the debt is at a high interest rate. Create a realistic plan to pay off your credit cards. Consider transferring balances to a zero-interest credit card to help pay them off faster.
  5. Set some goals. Have each family member write down their long-term goals. Then figure out how much those things will cost. Make the goals achievable and reasonable, so you can work toward them and feel a sense of accomplishment.

Cunningham said that fear itself can affect much more than people’s financial situations. “People owe it to themselves and their family to find solutions to financial concerns before they negatively impact other areas of their life.”

The NFCC Financial Literacy Opinion Index was conducted online from September 1 to 30, 2014 and included responses from 1,391 people.

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