Do you bury your head when it comes to your personal finances? Ignore bills and bank statements as too boring or too worrying? Put off pension planning for another day?
Yes? Then it sounds like a case of Financial FOFO – that’s Fear Of Finding Out about your finances.
FOFO is rooted in the fear that if we examine our finances, we might have to make changes that we don’t like or don’t have time to face.
“Psychologists call this ‘the mental bandwidth problem’,” says Sara Williams, a debt advisor and author of the blog Debt Camel.
“When there are tasks that have to be done now, it’s hard to make time for longer-term tasks such as developing good money habits.”
But by tackling Financial FOFO, you can emerge happier and less stressed. Simonne Gnessen, founder of Wise Monkey Financial Coaching and the co-author of Sheconomics, says, “Taking control of your spending isn’t about deprivation, it’s about creating freedom and options for your future.”
Tackle Financial FOFO in seven simple steps…
1) Know your numbers
Open up a savings account, bills and bank statements to finding a better credit work out your incomings and card or comparing outgoings.
“You need to know all the facts,” says Williams, “then you’ll feel more in control.” Keep a diary
for a few weeks, noting down every penny you spend, to see where your money disappears.
2) Reframe your thoughts
If the word pension makes your eyes glaze over, Gnessen advises “reframing” your thoughts so you see it as “a gift to your future self”.
“We need to work out how to keep our heads above water today, but also how to put aside money for our future,” she says.
3) Start small
Break down a to-do list into smaller steps. Tackle one task each month, such as setting up a savings account, finding a better credit card or comparing insurance policies.
4) Adopt new habits
Gnessen suggests checking your bank balance every morning so “it becomes a tiny habit, rather than a big thing you’re afraid of”.
5) Make it automatic
Register for internet banking and set up text alerts if you get near your overdraft limit. Pay bills by direct debit just after your salary goes in so you don’t spend money earmarked for bills.
6) Buddy up
Gnessen advocates finding a friend in a similar situation and supporting each other. “You don’t have to face money problems alone; share your fears and talk about how to manage the issues.”
7) Focus on a goal
If you’re saving for something specific, keep it in mind. “If you want a holiday, have a photo of the destination in your purse. Focus on what you do want, not what you don’t,” says Gnessen.