How to be Financially Fearless with Zip
If you are a thrill-seeking, horror movie lover, you know that watching a scary flick is all in good fun. After all, the emotions are real, but the scenarios are not.
Picture this, though: a brand new horror movie premieres with these two cast as the leads: your credit card debt and your savings account balance.
Sometimes it can feel like there is nothing more haunting than your financial situation, but it doesn’t have to be that way. Fright night should not be every night, yet according to a 2020 Bankrate survey nearly 56% of adult Americans reported losing sleep over at least one money-related issue and around one in three wasted their beauty sleep over their everyday expenses.
This may not come as a surprise considering the events of the past year and a half. There has been less job security and more financial anxiety than could have been predicted, and it’s okay to acknowledge your financial fears—but what’s even better is tackling them head-on.
Unpacking the Most Common Money Fears
Northwestern Mutual’s 2020 Planning & Progress Study provides a window into U.S. adults’ attitudes towards money and their long-term financial outlook. According to the study, the five most common financial fears were: an unplanned health emergency, an unplanned financial emergency, the respondent’s income, the inability to afford healthcare, and their level of debt.
These are all natural and normal fears to have, but there is also a light at the end of the tunnel: all can be addressed with some careful consideration and planning. Here’s how you can become financially fearless and take down these suckers in your sleep (we have good dreams only here at Zip!).
- The Fear: An Unplanned Health Emergency
Around 77% of respondents shared that experiencing an unplanned health emergency was one of their biggest financial fears. Given the global pandemic we have all been forced to navigate since 2020, this is likely relatable to many.
The Fix: When it comes to health emergencies, it’s important to get acquainted with the terms of your health insurance. Health plans can be somewhat customizable, with the insured opting to pay for a low cost plan with a high deductible or a high cost plan with a lower deductible. Typically, the less likely you are to experience a medical emergency based on your age, current health, and other factors, the more it makes sense to opt for a low cost plan.
To tackle this fear head-on, lean into learning about your health insurance plan and what it covers, and consider switching to coverage that better serves your needs. If you are uninsured or your health coverage is minimal, set aside savings specifically for a health emergency so that you can be prepared if the time ever comes to use it.
- The Fear: An Unplanned Financial Emergency
Tied for first, nearly 77% of respondents also said that an unplanned financial emergency was their greatest financial fear. In the same vein as an unplanned health emergency, the big fear around this scenario is that it is unexpected.
The Fix: Mitigate that fear by creating an emergency fund — whether it be for medical or financial needs. This way you can rest assured that you have some amount of money to fall back on when the unexpected occurs. You can start small with a $500 fund, which will cover things like emergency car repairs, and work your way up to saving around three to six months’ worth of your living expenses.
- The Fear: Tight Income or Salary Changes
Approximately 76% of those surveyed shared that their income was another source of financial fear. This could be related to losing your source of income, or simply not having enough for the life you currently live or dream of living one day.
The Fix: One way to tackle this fear is by having multiple streams of income to ease any job security worries or help supplement an income that is not quite cutting it. Consider freelancing or sharpening any additional revenue-driving skills.
Another way to mitigate this fear is by being thrifty and spending your money smartly. Instead of shopping for pricey new furniture for your apartment, check out discount retailers like HomeGoods or resale sites like Facebook marketplace! Shop at discount retailers for your essentials whenever you can, and create a budget around your income so that you can get a better grasp on your spending.
You can also use Zip, previously Quadpay, to split any payment or purchase into four installments over six weeks. This is a great way to manage your expenses when you need to make a purchase that falls outside of your anticipated monthly budget.
- The Fear: Inability to Afford Healthcare
In second-to-last, 68% of respondents shared that the inability to afford healthcare was also a major financial fear. Again, this is a reasonable concern as we have lived through a pandemic that has placed the burden of unexpected health costs on many.
The Fix: You can face this fear similarly to an unplanned health emergency—do research on the healthcare plan provided by your employer, set aside portions of your paycheck for an emergency fund, and explore government-aided health insurance programs if your work does not provide coverage.
- The Fear: Level of Debt
In last place (but not the least of your worries), 60% of respondents shared that their level of debt was a strong source of financial fear.
The Fix: Debt can be very daunting, but if you create a plan to pay off and eventually eliminate it, you might be able to snooze straight through the night. Handle this fear by deciding how you are going to pay off your debt (with the avalanche style or snowball method), and hold yourself accountable to that plan. Before you know it, your debt will no longer loom over you!
Face Your Fears with Zip
At Zip, we believe that when you give people the knowledge, access, and ability to control their financial lives, you give them the opportunity to live every day with confidence. That starts with forming healthier habits in your day-to-day life—and Zip’s pay later platform can help you stay on track with your budgeting now so that you can embrace a brighter financial future tomorrow.
Fears don’t disappear overnight, but looking them in the eye and saying “I can handle this” is one way to cut them down to size. We can’t wait to see how far you fly!
Get started with Zip today
Zip’s editorial content is not written by a financial advisor. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.