Financial Fear Factor: Americans’ 7 Biggest Money Worries
From creepy clowns to the threat of cyber warfare, Americans don’t have any trouble finding things to be afraid of, according to a new survey from Chapman University. The researchers asked more than 1,500 adults from across the United States about their biggest fears related to crime, the government, natural disasters, and more. The survey findings are a window into the American psyche, and what we can see isn’t always pretty.
Eighteen percent of people admitted the idea of whites no longer being the majority of the U.S. population made them fearful. (The U.S. will be a majority-minority nation by about 2050, experts predict.) Distrust of the government is high, with people afraid of new gun restrictions, the Affordable Care Act, and tracking of personal data. Alligators, snakes, and other reptiles inspire terror in a third of people. Ten percent apparently think The Walking Dead is a documentary and are worried about zombies.
What scares us the most? Anyone who’s followed this year’s presidential election won’t be surprised by Americans’ number one fear: corrupt government officials, who trigger nightmares in 61% of people surveyed. Another 41% of people said the possibility of a terrorist attack kept them up all night. But the third-most-common fear was something a lot more prosaic.
Forty percent of respondents said they were afraid or very afraid of not having enough money for the future. That’s more than the number of people who said they feared a loved one dying (38%) or becoming seriously ill (36%), the possibility of a third World War (32%), global warming (32%), or a random mass shooting (27%).
Fear of running out of money was just one of several money-related issues that scared Americans. Here are seven of our biggest money worries, according to the Chapman University survey, along with our tips for steps you can take to ease each financial fear.
7. Financial fraud
Percent afraid: 22%
Twenty-two percent of people worry about falling for a Ponzi scheme or other financial fraud. The fear isn’t irrational. Between 2008 and 2013, Americans lost more than $50 billion to Ponzi schemes, according to one estimate. In 2011, more than 14 million Americans were victims of credit repair, mortgage relief, work-from-home, prize promotion and other financial scams, according to the Federal Trade Commission.
How to fight the fear: Education is key to fighting financial fraud. The FBI maintains a list of common scams, from the familiar Ponzi and pyramid schemes to reverse mortgage fraud and “pump and dump” scams. But scammers are clever and constantly change tactics, which means the best defense is caution and common sense. As always, if something sounds too good to be true, it probably is, whether it’s a stock “guaranteed” to make you millions or a Nigerian prince who just needs a helping hand.
Percent afraid: 25%
One quarter of people are terrified of losing their jobs, the survey found. Losing a job isn’t unusual, but with many Americans living paycheck-to-paycheck, an interruption in income, even a brief one, can be devastating.
How to fight the fear: Even all-star employees get pink slips, so you need to be prepared for the worst no matter how secure your job seems. An emergency fund will see you through the lean times. If you suspect your job is on the line, start getting your ducks in a row now. Trim your budget, revamp your resume, and look for ways to boost your income temporarily so you’re ready when the ax falls.
5. High medical bills
Percent afraid: 33%
Medical bills are a leading cause of bankruptcy in the U.S. Even after the passage of the Affordable Care Act, which reduced the number of uninsured people, many people still struggle to afford deductibles and co-pays.
How to fight the fear: As with a job loss, a healthy emergency fund can cushion the blow of an unexpected hospital bill. (Make sure you have enough in savings to cover your deductible.) Before heading to the doctor, research what providers are in your network so you can avoid extra charges. But the world of medical billing is murky (the hospital might be in-network, but the emergency room doctor treating you is not, for example), and sometimes you’re hit with a big bill you didn’t expect. If you can’t afford to pay, you may be able to negotiate the bill down.
4. Credit card fraud
Percent afraid: 36%
Nearly 9 million Americans were victims of credit card fraud in 2014, according to the Department of Justice. New chip-and-pin cards are supposed to cut those losses and make transactions more secure, but experts predict a spike in credit card fraud in the coming years, as scammers burn through already stolen numbers from old magnetic strip cards. Thieves are also likely to increase their use of stolen information to open fraudulent new accounts and redouble efforts to hack into online accounts.
How to fight the fear: New technology means your credit card data is usually safe when you buy something in person. Online transactions may pose the greater risk. Anti-virus software can prevent malware attacks that allow hackers access to your personal data, while having hard-to-guess passwords and avoiding sketchy online storefronts will reduce the risk of theft. You’ll also want to monitor your statements for suspicious activity and check your credit report often to make sure there are no unfamiliar accounts.
3. Identity theft
Percent afraid: 37%
Seven percent of U.S. adults – or 17.6 million people — were victims of identity theft in 2014, according to the Department of Justice. Fourteen percent of victims experienced an out-of-pocket loss, including 14% who lost $1,000 or more. Even those who didn’t take a direct financial hit when their identity was stolen may have lost valuable time dealing with the problem and may need to monitor their accounts for future fraudulent activity.
How to fight the fear: Keep your personal information secure. Create tough passwords (and change them often), shred bank, credit card statements, and other documents, and be careful about who has access to your Social Security number and other personal info. Also, be alert to the signs of identity theft, like mysterious withdrawals from your bank account or new accounts on your credit report.
2. Financial collapse
Percent afraid: 38%
The possibility of an economic collapse keeps 38% of Americans awake at night. Such an event hasn’t happened in the U.S. since the Great Depression, but other countries have faced severe economic crises in recent years, including Venezuela, where a financial collapse has led to severe shortages of food and medical supplies.
How to fight the fear: The chances of the U.S. economy completely falling apart are slim. While economic shocks do happen (remember 2008?), the system is usually able to absorb the impact. Wasting time worrying about hyperinflation or the collapse of the dollar isn’t very productive. Instead, focus on living within your means, saving, and avoiding debt. That will help you prepare for another recession, which is far more likely than a total economic collapse.
1. Not having enough money for the future
Percent afraid: 40%
Not having enough money for the future is Americans’ number one financial fear. Considering that nearly two-thirds of people in the U.S. don’t have enough cash on hand to cover a $500 car repair or other minor financial emergency, this isn’t an unreasonable worry.
How to fight the fear: Start saving today, if you haven’t already. Even a $1,000 nest egg can be lifeline when your car breaks down or you need to buy last-minute plane tickets to visit a sick relative. You should also take a close look at your budget and look for ways to reduce spending. Not only will you be able to save more, but you’ll teach yourself to live on less. If you’re a diligent saver and financially responsible but still worry about running out of money, it might be time for financial therapy. Your fears may have more to do with your past experiences than with your current financial reality.