Overcoming Your Finance-Phobia

Hello you lovely people.

In this article I'm going to be talking about finance-phobia – the fear of money. Technically the official term is "chrematophobia" but I like "finance-phobia" better.

I struggled with finance-phobia for much of my life, and for a good while it prevented me from being a successful freelancer.

Then I developed some strategies to get over it, and the income started to pour in.

So in today's thread, I'm going to cover what strategies I used to stop fearing the green and start earning more.

Let's go 👇

You don't need to be struggling with money to fear it. Though living below your means certainly can enhance money phobia. But even people who earn good money can be freaked out by it - trust me, I've been there.

Tip #1: Explore the source of your finance phobia

To defeat a challenge, you have to understand it. And though this may be uncomfortable, you'll need to know what's causing your finance phobia before you can master it.

I'm not joking when I say I went to therapy for this – and if you're really anxious about it like I was, I recommend talking to a professional about it as well. Therapy for everyone, I say.

For me, I uncovered a few root causes of my finance phobia. Maybe some of these sound familiar:

⛪️ I grew up in a Christian home, where we were taught to be "christlike" as much as possible. That's not necessarily a bad thing, but as we know, Jesus wasn't exactly rolling in dough. But in my family, having too much money was something we considered to be a bad thing. So as I started to earn money, I started thinking, "I don't deserve this. I'm being greedy. I shouldn't be rich."

➗ I have always struggled with math. I was bad at in school, and still need a calculator to do most basic stuff. This had me convinced that I was no good with numbers at all, and never would be.

💸 In college and for much of my young adult life, I was struggling financially. I lived paycheck to paycheck, had big student loans and expensive rent, little financial support from family, etc. As a result, I grew afraid of checking my bank account. I liked to live in ignorant bliss, which is not possible when you're freelancing.

😕 Imposter syndrome played a big part. I saw the high-earners in my field as "others." They were smarter/more talented/more experienced than I ever would be, so I shouldn't even think about earning as much as they were.

Once I identified these problems, then I could start to counter them in my head. This allowed me to start being open to ideas like:

⛪️ I can still be a moral person and earn a comfortable wage

➗ Just because I don't enjoy math doesn't mean I can't handle numbers

💸 Being more aware of how much money I have will help me earn more

😕 I'm good at what I do, people get a lot of value out of my work, and I deserve to be compensated appropriately

I would say 50% of my work getting over my finance-phobia was just repeating these things to my inner saboteur until I began to truly believe them.

Here's a more literal tip:

Tip #2: Freelancers must have a method for predicting their income

This is something I have shared before, but it bears repeating because it's so important. As a freelancer, your paychecks won't be as regular and consistent. Especially when you are starting out, you will go through phases of feast and famine. These are SO MUCH easier to handle if you know what's coming in the pipeline.

This is the chart I've made myself that predicts my income, because none of the big tools like Quickbooks do this. I make a new one annually, and fill in all of my retainer work (or known work) so I can see what's coming in the future.

The blue line represents the minimum I want to make each month to afford my lifestyle. As you can see, I'm going over it and under it, but I'm averaging out pretty well.

A chart like this takes away a lot of the anxiety, because you aren't always wondering "Am I going to run out of money next month?" With this chart, you knwo whether you are going to hit your target. If you see the line below your target in a month or two, start ramping up your marketing to get new leads.

👆 I share a template for this chart with all of my SEO freelance mentees/students. If you want your own copy, you can join my mailing list to find out when the next edition is being released.

Or follow me on LinkedIn or Twitter.

Or just send me a friendly DM in TOFU and I might just share a copy with ya.

Tip #3: Get some retainers going

Retainers are the key to kicking finance-phobia's butt. Retainers give you consistent income, something you can rely on that won't run out unexpectedly in most cases.

For me, I have 3 retainer clients that I can count on every month to give me at least enough to pay my bills and feed myself and have a little fun. Everything that comes on top of that is gravy.

Getting retainers is no easy task - and perhaps I can do a whole Freelance thread about that if people want me to. (Like this comment if so).

But the best way to get a retainer project is to prove long-term value. If your client is paying you $1,000 - $2,000 a month for blog content creation, come up a 3-month retainer for $1,500 that gives them x # of blogs at that rate. It will feel like a good deal to them.

Then try growing/upselling that to a longer-term contract.

Tip 3# Get some professionals and platforms in your corner

There's a common misconception that tax accountants are more expensive than their worth. But once you start earning a significant amount of money through your business, they are worth it. My accountant charged me $500 to help me prepare my taxes last year, and probably saved me about $1,500 in taxes I would have missed. So totally worth it.

On top of that, if you aren't already, start using accounting software. If you're in Australia, I highly recommend Rounded. I’ve also heard good things about HelloBonsai, which I'm probably switching to in the new year (because I use Quickbooks right now and don't love it). These tools help you see your income at a glance (though they don't predict income, which is annoying). And they automate a lot of the tax process.

Tip #4: Save and invest (even if you're almost broke)

Finance-phobia often means you are also afraid of complex financial stuff. Words like "investment" and "Roth IRA" and "bonds" used to give me the sweats. Then I found out that these days, there are lots of platforms that allow you to make more money off your existing money, even if you don't have much.

Personally, I use Betterment.com to invest/save my money. It allows you to set up goals (I have one for Travel Money, one for a deposit to put on some property in the future, a rainy day fund, etc.) It then automatically recommends how to invest my money and does it for me, and sends me weekly notification on how I'm doing getting toward my goals. It also helps me save on taxes by keeping track of what I'm putting into my retirement fund and donating to charity.

I'm not being paid by Betterment to tell you this, I just love the tool! Much better than just keeping all my money in a bank account with low interest. Stop doing that – you're losing money!

I'll wrap the thread there. Some questions for you:

🤔 Do you suffer from finance phobia?

🤔 Where does it come from?

🤔 What tools do you use to manage your money?