Money fears

I was going to write about “Where have all the Volunteer leaders gone”, but since my interests are many, when I saw this question, I changed my topic. The question is What’s your biggest money fear?

This is an interesting question and the answer is dependent, I suspect based on age, lifestyle and stage of life.  So, I went to the net to see if my assumptions were correct. I assumed that twenty-somethings might say they fear having to live in debt forever, or that they’ll never be able to afford a home, which is true, but this group is also concerned about learning how to manage money, debt and savings

Those in their thirties fear they’ll never stop living paycheque to paycheque. By the 30’s many have children, have bought a home or an apartment, and get caught up living with a mortgage. However, they are still learning to manage their money, controlling spending and debt. The savings are now starting to be geared for college for the kids and maybe retirement.

Forty-somethings might fear losing their job and having to start all over again. However, the concerns are more focused, many in their 40’s are established, but they recognize that a downturn in the economy or automation can put a halt to their plans. So, they are focused on gaining new skills, looking for ways to reduce debt by refinancing their mortgage or taking on a second job. Children are getting married so ways to help pay for the wedding become a bigger issue. In the late 40’s the realization that maybe some more money should be allocated to saving for retirement dawns.

The biggest money fear in your fifties might be whether you’ll ever be able to retire. The reality for many is that they have not because of other issues saved enough for a comfortable retirement. All of us will retire and in Canada and the US, we retire at age 61 or 63. This means that we have to find extra money for retirement. In this process we re-examine or debt and perhaps use debt consolidation to pay down our debt faster, we re-evaluate our retirement goals and we start to consider the value of different types of insurance.

The number one concern for all retirees is whether they will outlive their savings. It’s a legitimate fear, especially for women over the age of 60 who worry about the prospect of outliving their money and becoming homeless. Indeed, careful planning is required for those who retire without access to a defined benefit pension and without sufficient savings in RRSPs.

This fear can be overblown because Canadians enjoy government programs such as CPP, OAS, and GIS that provide a financial floor that has kept seniors out of poverty, although there is no assurance that these programs will continue to work as they were intended.