Updated: Mar 12, 2024

How to Get Over the Fear of Finance

Does the thought of reviewing your financial statements make you shudder? You're not alone. Here's how to break through and get over the fear of finance.
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I remember it like it was yesterday. It was one of the most intense feelings I’ve ever experienced. I had just graduated from NYU with my master’s degree. I knew I took out a lot of student loans but wasn’t sure on the specifics.

So I signed up for the budgeting software, Mint, to track my income and expenses. I synced up all my accounts and my loans and there it was.

$68,000. That was how much I owed.

I had already been paying my student loans for five years after graduating with my B.A., but apparently didn’t make much progress by only paying the minimum.

Seeing just how much I owed compared to how little I made was a tough pill to swallow. I had just graduated and though I had cobbled together some gigs, a full-time job wasn’t anywhere on the horizon.

My breath quickened and suddenly I felt nauseous. I never had such a physical reaction to my personal finances, but I had never been in so much debt either.

I didn’t know what to do. I felt scared and alone. How was I going to pay back the debt? I felt so overwhelmed and so fearful that I went into complete denial. Within a matter of minutes, I deleted my Mint account. I brushed the situation under the rug and chose self-preservation over action. In short, I could not deal.

It was easy to stop cold because I didn’t know what to do. Though I had a master’s degree, I had never learned the basics of personal finance. I didn’t know how to budget. I wasn’t sure how credit worked. I sure didn’t understand how interest accumulated on my student loans - and was shocked to later find out I was paying $11 per day in interest.

Over the next couple of years, my debt and lack of personal finance knowledge became a deep source of emotional turmoil for me.

I felt ashamed that I let myself get into so much debt and not really understanding how everything worked. I felt guilty for having a ton of student loan debt and no career to speak of. I felt scared, hopeless and without options.

Ultimately, I had to hit rock bottom to get over my fear of facing my finances. I was broke, underemployed, and on food stamps. Not exactly the life I imagined after graduating from NYU. It was only then that I decided to face my finances head on and take action.

You Are Not Alone

When I was in a dark emotional place about my financial situation, I felt so alone. I felt like I was the only person that didn’t really know what they were doing, figuring out things as they go. Everyone seemed to have it figured out but me.

It wasn’t until I started my blog that I realized how untrue that was. I’ve heard from many people who were feeling frustrated and fearful about their finances, not knowing where to turn or unsure what to do.

Though being in a tough spot financially can feel so isolating, you are far from alone. Many people feel ill-equipped to deal with their finances and fear taking action. It can feel shameful admitting you don’t know where to start or what to do. The important thing to understand is this: financial education is largely learned through trial and error.

We aren’t necessarily given the tools and resources for financial success in school. Our parents may or may not have discussed money with us. Not only that, but we have been conditioned to believe things about money from family and friends. Things we might not even realize, such as “money is the root of all evil”. All of these things play a role in our relationship with money.

You Have to Start from Somewhere

My point is that there is no shame in not knowing what to do or where to start. In fact, it’s pretty normal. We all start our own financial journeys from different points and we all have to start somewhere.

Sometimes the fear of finance — the shame of admitting you don’t know certain things or how to manage your finances can be paralyzing. It can make you feel stuck. As with my own story, these emotions can lead to denial and inaction.

How to Get Over the Fear of Finance

The first step in getting over the fear of finance is accepting where you are at in your financial journey. It’s okay to start from where you areYou may not have all the answers or a concrete plan. You may not know how everything will play out. We all have to start somewhere and sometimes the first step is the hardest.

Sometimes we can get stuck on something because we’re not “experts.” But working through it on your own terms can be a great learning experience.

Realize that it’s okay to be where you are at and that you are not alone. Don’t compare your financial journey to anyone else’s. This is so important for you to overcome the fear of finance. Once you start comparing, you may think financial knowledge is for “everyone else” but you.

That’s simply not true. We all have the power to change, learn, and improve. When it comes to finance, it’s important to look at your unique situation and the variables that you're working with.

To help you get over the fear of finance, you need to first face your own financial situation, regardless of how surprising or painful it might be. Start with these few steps:

Look at How Much You Make Each Month

Get your pay stubs out and look at how much you're making. Calculate your hourly rate after taxes. This is important as you should create a budget based on your post-tax salary. One of my biggest financial mistakes in the past was budgeting with my pre-tax salary, not understanding that my post-tax salary would be much different.

Take Inventory of Your Expenses

Write down all your expenses. What recurring bills do you have? Where is your money going? This might include rent, insurance, internet, cell phone, gas, car payment, student loan, credit card bill, groceries, and more. When you’re just starting out on your financial journey it can be helpful to track all of your spending for at least 30 days to see where things are really going. It can be a big wake up call!

Know How Much You Owe

This can often be the toughest thing to face in your own financial journey. Find out exactly how much you owe, down to the penny. This means student loans, credit card debt, mortgage payments, or car loans. It’s easy to be in denial with debt but getting over the fear of finance means facing this head on.

Examine Your Habits

After you get a clearer picture of where you stand with your income, expenses, and debts, it’s time to look at your habits.

  • What things do you consistently spend money on that you don’t need?
  • What are your spending triggers? (i.e. certain situations that encourage you to spend more. For example, my spending triggers are when I’m sick or tired.)
  • Acknowledge what things are in your control and what is out of your control - this is key.

Being financially self-aware is a huge step to take towards improving your financial knowledge. Understanding your financial situation, your money mindset, and most importantly, your relationship with money can all lead to progress.

Remember, the goal is progress, not perfection. It can be easy to be fearful of finance because of our past failures. But here’s a little secret: no one is perfect with money. We all slip up. We all make mistakes and get back up on again.

When you were a kid learning how to ride a bike how many times did you fall down? Probably a lot. But you kept trying and, eventually, you were able to ride a bike without training wheels.

Think of your own financial journey like that. You may fall, make mistakes, but you can recover and get back up again.

To continue with your financial awakening, here are some things you can do:

  • Check your bank accounts and credit card accounts daily. It may seem like a lot, but spending 5 minutes per day reviewing your accounts can give you a grasp on your spending and also minimize any identity theft.
  • Review your credit report at AnnualCreditReport.com. Make sure there are no errors and if there are be sure to dispute them.
  • Read, read, read! Read personal finance blogs (like this one) and financial publications to become familiar with common financial terms. Trust me, a few years ago I had no idea what APR, FICO, and credit utilization were. Learning about finance can seem like learning another language — and that’s exactly what it is. Start small and work in manageable chunks.

Don’t Dwell on Mistakes, Keep Looking Forward

Getting over your fear of finance and the complex emotions related to money won’t happen overnight. Even though I was able to pay off all of my debt through hard work and education, I still have moments of fear with money and I still make mistakes.

As you continue on your financial journey, it’s important to not dwell on your mistakes. Acknowledge that they happened, but look forward. Work every day to empower yourself with your finances. In knowledge there is power, and power can diminish any fear you have.