Fiscal Cliff MTNews

By Joel Dresang

Fifteen years ago, I had an operation to correct a narrowing in my spinal column. Surgeons told me that perhaps I could function the rest of my life with that stenosis. Or, perhaps, an unfortunate slap on the back or fall to the ground could paralyze me.

Even after the surgery, I have feared falling. Before, I felt off-balance because of the spinal condition, but I am still occasionally unsteady on my feet. Besides, I have seen enough harm from the falls others have taken – family and friends who have suffered trips to the hospital and worse.

According to the Centers for Disease Control, falls are the leading cause of injury and death from injury among Americans 65 and older. Every second of every day, someone in that age group suffers a fall, resulting in 36 million reported tumbles a year, prompting 3 million emergency room visits and 32,000 deaths.

So, at least my fear of falling is somewhat warranted.

Another fear — both common and consequential — is finances. Consider:

  • Sixty percent of Americans feel anxiety just thinking about their personal finances, according to a 2021 survey by the Financial Industry Regulatory Authority (FINRA) Investor Education Foundation and the Global Financial Literacy Excellence Center at George Washington University. Talking about finances stressed out 50% of the 19,000 survey respondents.
  • Finances rank among the top fears of Americans 65 and older, according to a January 2022 online survey by “After the death or illness of loved ones and political fears, not having sufficient retirement savings was the top fear for older adults.”
  • In a 2021 Harris poll for the National Endowment for Financial Education, 85% of Americans said some aspect of their personal finances was causing them stress. The most common worries: Having enough for emergencies, having enough for retirement and paying medical bills.

Of course, many people just avoid financial matters if they’re afraid of them, which is typical for the fight-or-flight reaction humans have when encountering any fear. Psychologists say that’s the wrong tactic.

“Face your fears whenever you can. Notice the powerful urge to avoid, and don’t give in to it,” Dr. Susan Biali Haas wrote in Psychology Today. “In most situations, it is worse for you and your life to avoid what you are afraid of instead of facing it.”

Deal with what fears you rather than turning away from it. That was Franklin Delano Roosevelt’s message when he said, “…the only thing we have to fear is fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance.”

Other Money Talk articles from Joel Dresang

Dr. H. Steven Moffic, a Milwaukee-based psychiatrist, wrote in Psychiatric Times that FDR was pleading with individuals to not panic, to use fear to motivate, not deter.

“With the correct actions and guidance, fear can become a mind-expander, something we need to respond as best as we can…,” Moffic wrote.

A number of forces are behind people’s fear of finances. Besides individual circumstances, low financial literacy is a chief contributor to anxiety and stress over money, according to the joint study by the FINRA foundation and George Washington University. In other words, when it comes to money, what you don’t know can hurt you.

A “systematic increase in financial knowledge” needs to be part of a multifaceted approach to address individuals’ qualms about money, Annamaria Lusardi, a George Washington University economist, said in a statement.

A recent article in The Wall Street Journal noted three ways to confront the fear of finances:

  1. Acknowledge your fear. You can’t hit what you can’t see. Be honest about whether finances confuse or daunt you. Take consolation in knowing you’re not alone.
  2. Inform yourself. Getting familiar and comfortable with money matters can happen in small doses over time. You don’t need to become an expert; learn enough so that you’re no longer intimidated. Through its website, monthly newsletter and weekly podcast, Landaas & Company offers information and conversations aimed at enlightening long-term investors. Investor-friendly organizations also have online resources, including the FINRA foundation, the Securities and Exchange Commission and the Consumer Financial Protection Bureau.
  3. Get help. Especially as cognitive abilities tend to decline with age, it’s important to enlist the assistance of others you trust to look after your best interests. FINRA has advice on hiring an investment professional. It’s also important to designate a trusted contact your advisor can reach on your behalf if necessary. Getting help isn’t the same as giving up; it can provide peace of mind. A study released in late 2021 by Herbers & Co. consultants found that high earners who work with a financial advisor are nearly three times happier than those who don’t.

Test your financial literacy
Researchers at George Washington University and the University of Pennsylvania devised these questions to test financial literacy. Choose your answers and then click here for the correct responses.

  1. Suppose you had $100 in a savings account and the interest rate was 2% per year. After 5 years, how much do you think you would have in the account if you left the money to grow?
    1. More than $102
    2. Exactly $102
    3. Less than $102
    4. Do not know/Refuse to answer
  2. Imagine that the interest rate on your savings account was 1% per year and inflation was 2% per year. After 1 year, how much would you be able to buy with the money in this account?
    1. More than today
    2. Exactly the same
    3. Less than today
    4. Do not know/Refuse to answer
  3. Please tell me whether this statement is true or false. “Buying a single company’s stock usually provides a safer return than a stock mutual fund.”
    1. True
    2. False
    3. Do not know/Refuse to answer

Another step toward overcoming fear is to do something about it. Small steps can go far. “Just setting a savings plan or working toward saving more for retirement is a way to face that fear and work to overcome it,” Chris Evers said.

I deal with my fear of falling by trying to stay active and maintaining some core strength. I’ve jumped rope with my eyes closed believing it might help my balance. I once took a theater movement workshop that focused on walking – just consciously, methodically putting one foot in front of the other.

I also try to be alert to conditions that can precipitate falls. Around the house, I’m vigilant against shoes on the steps. When I walk the dog and suspect the sidewalks are icy, I strap some metal grips to my boots.

I need to remind myself that all my worrying and precautions won’t necessarily prevent me from occasionally faltering and taking a tumble. For a time, I resolved to just stay inside when it got icy. Then I got the grips, deciding I wouldn’t let my fear keep me from venturing out and making the most of my time among the upright.

“When it comes down to it, anxious people fear the feeling of fear,” Biali Haas wrote in Psychology Today. “That’s the most scary part – the way you feel when something makes you really anxious. This leads to avoidance, which then leads to more avoidance, which leads to a progressively smaller, more limited life.”

Joel Dresang is vice president-communications at Landaas & Company.

Learn more
Trusted contacts for your sake, from Landaas & Company
Advancing age, declining capacityby Joel Dresang
Keeping family in the financial loop, a Money Talk Video with Isabelle Wiemero
(initially posted February 4, 2022)

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