Dealing With Financial Fear


Years ago when I was first thinking about self-employment, one thing scared me above all others. Taxes. It sounds silly, but I was terrified of screwing it all up and ending up in jail. Estimated taxes, quarterly payments, and self-employment deductions freaked me out so badly that it almost seemed better to stay employed with a company and let them handle it. Almost. Fortunately I overcame my fear and went out on my own. As I’ve not landed in jail yet, I must be doing something right.

I know I’m not the only one who’s ever been scared of some aspect of finance. Taxes scare plenty of people. Many people refuse to invest because they’re afraid of losing all their money. Some people are afraid to buy property. Others are afraid of starting a business. Finances can be scary because there can be a lot a stake. It’s easy to imagine all kinds of worst case scenarios where you lose everything, end up in jail, or end up the victim of a scam.

At the root of most of this fear, though, is a lack of education. What scares people about money is usually what they don’t know or understand. That’s actually good news because it’s something you can deal with and overcome. In my case, I didn’t know anything about taxes for the self-employed, beyond a few horror stories I’d heard in the media and from some other self-employed friends. However, once I took the time to sit down and educate myself, I realized that it wasn’t as bad as I’d feared.

I’d scared myself senseless over something silly. Are my taxes more complicated now? Yes. But with the help of TurboTax, the IRS website, and other helpful information, it’s not as difficult or scary as I’d feared. I get through it every year and I enjoy self-employment so much that I can’t believe I almost talked myself out of it, simply because I didn’t even know what I was dealing with. If you’re living in fear of something financial, here are some helpful tips to help you get past the fear and get on with making a better financial life.

Educate Yourself

Whatever you’re afraid of can probably be demystified with some good education. Read some books and reputable websites on the topic that’s scaring you. Take a class. (The fee for the class will be well worth it if you come out less terrified of money.) Or, talk to someone like a reputable attorney, accountant, or financial planner who will take the time to explain what you need to know.

Start Small

I had some idea that I would be dealing with so much money in my first year of self-employment that I’d never sort out the tax mess. Ha! The first few years I had so little income and deductions that it was easy to deal with. Each year I’ve added on a little bit more complexity, but because I’m acclimated, it never becomes too much. Whatever you’re worried about, deal with it by starting small. If you’re scared of investing, buy one stock or fund and see how it goes before adding on another. You don’t have to jump in with a sizable portfolio. If you’re afraid of starting a business, start by simply doing some side work while you’re still full-time employed so you get the hang of things slowly. Starting small gives you time to learn before you commit too many resources to something that won’t work.

Realize Most Things Can Be Fixed

I finally realized that even if I screwed up my taxes beyond belief, I probably wouldn’t go to jail. Mistakes can be fixed. As long as I wasn’t intentionally trying to defraud the IRS and as long as I was honest about any mistakes, I’d likely only have to pay the difference plus penalties and go on with my life. It’s the same with almost any financial endeavor. A bad investment can be sold. Sure, you might take a loss but if you’ve started small you won’t lose all your money. If you start a business and it doesn’t work out, you can close it down. You might take some losses, but you probably won’t lose everything. Rarely does the worst case scenario happen.

Take Your Best Shot

Sometimes you just have to try, regardless of fear. You can educate yourself so that you understand what you’re getting into and you can start small, but at some point you just have to jump in. You don’t want to get into something you don’t understand or that might put you in financial jeopardy, but if the thing you fear is something you really want to do, you’re just going to have to do it.

I’ve always been glad that I dealt with my fear of self-employment taxes. I wouldn’t trade self-employment for an office job any day. Had I let my fear rule me, I would have stayed in the safe job and I wold have missed out on a fascinating and challenging career. I still get the heebie-jeebies sometimes in April, right before I hit “Submit” on that tax form, but I know I’ve done my best and that the rest will take care of itself.

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One Response to Dealing With Financial Fear

  1. robert zimmerman says:

    I have long believed that knowledge is the key to eliminating fear. Financially, you can obtain unlimited knowledge on the internet, but most need someone to do some hand holding. That is where a trusted adviser can be helpful. The trick is to find one that you can trust.

    A good source for educating yourself financially is to sort through the article publishing sites.

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