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Some Fear They'll Never Have Enough

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The Tampa Tribune

Published: December 16, 2007

The online discussions I host give me an opportunity to see the financial issues that trouble people the most. Often what I find are people racked with fear.

And the fear isn't just displayed by folks deeply in debt. Some money worriers are people who are doing everything right - saving, living within their means, investing - and yet they still fret about finances.

For example, here's a note from one chat participant. She wrote: "My husband and I are federal employees who make a decent salary, about $140,000 combined per year. I save 15 percent of my salary in the Thrift Savings Plan a government retirement plan, hubby saves 10 percent. We have about $15,000 set aside for our toddler son's education and contribute another $150 a month to a 529 plan for him."

This reader went on to say that she and her husband invest $150 per month in a mutual fund they've designated for retirement. They have a town house with a small mortgage they've been renting out while living overseas.

"We have no debts other than the mortgage and, while we've been overseas, we've been able to save an additional $30,000 a year."

Worry Never Ends

I can just imagine what some of you are thinking. What in the world does this woman have to be worried about? Here's what.

"Even though I know that we are financially stable, I worry all the time about money because my parents poorly managed their money, and I worry that I'll end up like them. They have minimal savings and health problems and are likely to run out of money in their retirement. Hubby's family was also bad with money. Every purchase - even a routine one - makes me worry if I shouldn't save more. How do I stop viewing money as a ticking time bomb about to blow up in my face?"

The timing on this question gives me the chance to recommend "The Financial Wisdom of Ebenezer Scrooge," by Ted and Brad Klontz and Rick Kahler (HCI, $14.95).

The authors, two psychologists and a financial planner, respectively, talk about the "money scripts" we all have that are based on long-held beliefs typically implanted in our childhood.

Look at this woman's money script: Her parents were poor money managers and she may be just like them, and one can't ever save enough to feel secure.

If you have a lifelong fear that you will never be financially secure even though you're saving and investing well, you have to flip the script.

What's Your Net Worth?

Use the end of the year to create or update your net worth statement. You calculate your net worth by adding assets and subtracting liabilities.

On the asset side, you list, among other things, any cash, the value of investments and, most importantly, your home. For your home, put down the approximate fair-market value of the property. On the liabilities, include such things as your mortgage, any home equity loans, car notes, student loans and outstanding credit card balances.

The goal is to own substantially more than you owe.

You should update your net worth statement at least annually because it's a snapshot of the value of your financial holdings.

Home values in many parts of the country have declined, leaving some borrowers owing more on their homes than current market value. That has resulted in a negative net worth for some.

If it helps to compare your progress with others, the average net worth of U.S. families increased 12 percent between 2003 and 2005, according to a University of Michigan study. In constant 2005 dollars, overall average net worth rose from $275,600 to $309,600 (including home equity).

Since this is the season to count blessings, if you're spending time worrying about your wealth, think about those who have less.

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