Recognizing And Conquering Financial Fears - From "Homefree" In Streetwise - 1995

[Pierre Clark]

By Pierre A. Clark - From "Homefree" In Streetwise. Copyright 1995-2010 Pierre A. Clark. All Rights Reserved.

Most of us, I believe, want to be self-sufficient, to earn enough income to take care of ourselves and our families and buy the things that we want. Yet there is a growing belief that many of us will not be able to earn enough income to maintain a decent lifestyle.

As Labor Secretary Robert Reich recently noted, the country's workforce increasingly is being divided into a technologically literate privileged class and a skills-deficient underclass that will not be able to earn enough money to survive in the 21st century.

"Support-net" programs like welfare are being attacked by a conservative, angry percentage of the population and will almost certainly be cut back within the next year.

Especially if you are a low-income resident, most of your day-to-day decisions - what to eat, where you go, how you travel - probably are based on financial considerations. If you live from one paycheck to the next, or one welfare payment to the next, you are truly one check away from homelessness.

If you are living from one paycheck to the next, you must always fear what will happen if that paycheck is cut off. That fear inevitably creates stress that is life-threatening; in fact, more poor people die of stress-related diseases (high blood pressure, depression) than any other illnesses.

HAS FINANCIAL FEAR GRIPPED YOUR LIFE?

You can easily determine whether financial fear has gripped your life. If you are feeling anxious about whether you will still have a job next year or whether your welfare, Social Security or supplemental security income will still be coming in, then you are living in financial fear. For those totally dependent on welfare or government payments (or one income stream) recent news stories should prove to you that your fear is justified.

WELFARE - AN ENDANGERED SPECIES OF FINANCIAL ASSISTANCE
Welfare, originally meant to be a temporary support system that would provide a subsistence existence until a person could obtain another job or develop other income, has become a catchword for a lind of shiftless, irresponsible lifestyle adopted by low-income residents and people of color.

Even though this definition is false (the vast majority of people on welfare and receiving food stamps and other financial assistance, even today, 14 years later, are Caucasian and Hispanic), the effects of defining welfare in this way will be financially devastating for those who are dependent on welfare.

Whether it is right, or moral, to eliminate these income streams for low-income people, the trend is inescapable: welfare, Social Security, affirmative action, and other so-called low-income entitlements are under attack. If the current Republican-led Congress has its way, they will be cut back as soon as possible. (Indeed, the safety net, ironically led by Democratic President Bill Clinton at the time, was cut for tens of millions of Americans).

IT'S INESCAPABLE - FINANCIAL DEPENDENCY BREEDS FEAR
Living with this fear should indicate to you one inescapable fact - you probably have become too dependent for survival on a few sources of income and have not begun to develop a variety of alternative income sources that give you an opportunity to stay financially solvent if one or more income streams are cut off. It seems to me you have two choices: to continue to live your life in fear of impoverishment, or to develop a plan of action to create additional legal incomes that replace the endangered ones and enable you to live the life you want.

STRATEGY FOR CONQUERING FINANCIAL FEARS
There is a process you can deal with to identify the sources of financial fears in your life, eliminate them and turn that fear to your advantage through identifying and exploiting your own capabilities. Here are some action steps:

RECOGNIZE THE BASIS FOR YOUR FINANCIAL FEAR. Fear grows out of a lack of confidence in your own skills and capabilities. The first step in eliminating financial fear is to acknowledge and confront its source - your own lack of confidence.

Once you can address and acknowledge your own insecurity about your income-generating capacities, you can also accept a truth - that far from being completely helpless, you really do have some skills and income-earning capacities that, once you identify and begin to apply them, can turn you from fearful passivity to aggressive financial activist.

OPTIMISTICALLY ANALYZE YOUR OWN CAPABILITIES. Most of us sell ourselves short. We can do and be more than we think we can. Once we acknowledge our own self-worth and potential for control of our own lives, we automatically reduce the hold financial fear can or will have over us and our actions.

REDUCE YOUR DEPENDENCY ON INSECURE INCOME STREAMS. From shooting photos to cleaning houses to selling dinners to writing letters and poems, there are many part-time or full-time tasks we can perform to generate additional dollars. Notice the packs of cookies you see being sold at Walgreens, restaurants and other stores? Someone had the bright idea to package their home-made goodies and market them for the rest of us to discover and enjoy. Do you sing well? Why not promote yourself as a part-time entertainer? Bernie Mac started his comedic career entertaining at funerals. Get busy doing things you can do to generate additional and independent income. The feeling of freedom you experience from earning that income will be both enlightening and liberating

IMPROVE AND EXPAND YOUR SKILLS AND TALENTS. Your own confidence will grow the more you practice and master your own unique set of income-generating skills, and that confidence will attract potential customers and thus help you grow your income base. Set a goal to practice and expand those skills consistently until you can generate $250.00 a week over and above your current income. That's an additional $12,500.00 a year in potential income.

SAVE FOR THE FUTURE. Amassing some rainy day savings is a key to eliminating financial fears. If you save just $100.00 a week of the extra income you are earning, that's $5,200.00 in the bank. Save $200.00 and that nest egg grows to $10,400.00. And if you invest that income every week in a mutual fund paying 4% or 5% a year, you might have as much as $13,000.00 in principal and interest within a year's time. If your expenses are $2,000 a month, you've stashed away enough to survive for 6 months - and it's the knowledge of having that nest egg and the ability to earn it that can eliminate those old fears forever.

You know it's true and you need to develop the courage to act on the truth: dependency breeds fear. Acknowledging your own financial dependencies - in attitudes, habits, and actions - allows you to seek and uncover the skills and abilities within you that empower you to break those dependences and live with purpose, confidence and independence. As one of my favorite people, Bill Campbell, says: "It's an inside job. YOU DECIDE to make it a great day."

So it is with financial fears. The keys to achieving freedom from those fears are in you. Discover those keys and allow them to lead you to the life and happiness you want.

Writer's Note: This column, "Recognizing And Conquering Financial Fears" has some 1995 references to the welfare situation and Republicans, and I was sharing my strategies on how low-income residents should deal with welfare cuts and living from paycheck (or welfare check) to paycheck. It's funny how things haven't really changed in almost 14 years. So except for the references to welfare, I think the theme of self-sufficiency that I was pushing then still rings significantly true today.