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How to deal with your Financial Fears

The best way is to be organised and prepare well for events and eventualities

‘I’ll lose all my money in the market’

This is probably the most common financial fear, especially among the new, inexperienced or financially illiterate investors. It is also true of someone who has suffered significant losses in the market turbulence earlier.

How to deal with it: The best option is to not invest directly through stocks, but via mutual funds. If you do want to trade in shares, do not follow tips from friends and family blindly. Either educate yourself by reading up on the subject or take the help of a financial adviser. A good suggestion is to invest for the long term and not be influenced by short-term flux or churning.

‘I won’t have money for retirement’

Nearly 51% Indians fear they will run out of money in retirement, with seven out of 10 expecting their children to support them, says the HSBC Future of Retirement Study 2018.

How to deal with it: Start by saving more of your income by cutting down on non-essential spends. Next, check if you are investing in the right avenues so that your corpus is growing at the right pace. Take the help of a financial adviser, if necessary. Also, push back your retirement by looking for additional sources of income and supplementing your existing income.

‘I am going to lose my job’

If you are worried about job loss, you have either come across clear indicators from your boss or colleagues, or have witnessed recent job losses in your company, industry or sector.

How to deal with it: Be honest and check if your fear is due to your own poor performance. Talk to your boss and find ways to improve or upskill yourself. If the reason is beyond your control, such as cost-cutting or poor industry performance, you will either have to make yourself indispensable by learning niche skills and multitasking, or start looking for a new job. Having an emergency corpus helps.

‘I’ll never be able to clear my debts’

The temptation to buy on credit often results in several loans, some of which may have long tenures and big EMIs.

How to deal with it: Ensure that all your loans do not exceed 50% of your income. If you have a large debt, prepare a plan to repay these, starting with the most expensive ones like a credit card bill or personal loan, and moving to car and education loans. If you are uncomfortable with a long loan tenure as with a home loan, prepay it at the earliest. If you want to avail of the tax benefit, retain it.

‘I can’t handle a health emergency’

The fear of wiping out savings in a medical emergency is very real given the high cost of hospitalisation and medical care. This is especially true in case of critical illnesses and accidental injuries.

How to deal with it: Insure yourself. Buy a small basic health plan of, say, ₹5 lakh and get a bigger top-up plan of, say, ₹15 lakh with a deductible of ₹5 lakh. This will be cheaper than a single cover of ₹20 lakh. You can also create a financial buffer to supplement the basic health plan. It’s also important to buy critical illness and accident disability insurance plans.

‘I can’t get my documents in order’

Introducing errors in tax returns or not filing on time, not preparing a will or disposing of assets, not renewing policies, or not filing important documents properly are among the biggest fears.

How to deal with it: Prepare a schedule and follow it diligently. Maintain a separate diary, listing all the important documents as well as the deadlines for filing, renewing or paying premiums. Fix dates, set alarms and automate payments. To avoid errors in filing tax return or making a will, take the help of professionals. TOI

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