Beat back 5 financial fears

Everyone's got concerns when it comes to money, but some have fears that can really put a big hole in their financial future. Here's how to overcome five common ones.

Risk Tolerance
How much uncertainty can you stomach?
1. You have $10,000 invested in stocks and mutual funds. The past quarter has been rough -- the value of your holdings has dropped by 20 percent. You:
Cash out what's left and stow it under your mattress.
Move all your money to a government bond fund.
Do nothing. You're sure the market will rebound in the long run.
Pour another $10,000 into the stock market. After all, it's cheap!
Fear of being penniless
No matter how much you have, you're always mindful that financial catastrophe could strike. And you're right. It could.

But to focus on that possibility and become a money hoarder is, in some ways, to forfeit your life. "That kind of fear immobilizes us," said Sheryl Garrett, founder of the Garrett Planning Network of fee-only financial advisors. "There's danger and risk in virtually everything you do. And you can't allow fear to immobilize you."

Try this: Garrett suggests trying to come to terms with more likely and more narrowly defined risks. For example, you could get an illness or disability that prevents you from working for some period, so consider whether you're adequately insured for that possibility. And likewise, you could live a long life, so map out an adequate savings plan to ensure you live comfortably without running out of money.

Of course, if you have a pervasive fear of poverty, it's likely there can be no one quick fix. So if your fear controls your every financial move - to say nothing of your relationships - consider exploring the issue with a psychologist to unearth the roots of your fear. "What's unconscious will run you, and when it becomes conscious it loses its power over you," said Dr. James Gottfurcht, president of Psychology of Money Consultants in Los Angeles.

Fear of coming clean to your partner

Fear of not fitting in

Fear of being penniless

Fear of success

Fear of taking the financial reins
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