Updated on 10.08.14

My Five Greatest Financial Fears

Trent Hamm

Almost a year ago, I wrote five entries on my five biggest financial fears at the time. Here they are, one more time:

My Biggest Financial Fears- One Year Ago

#1. Buying a home

We lived in an apartment at the time, and the idea of purchasing a home scared me to death. I didn’t know the first thing about purchasing a home and the thought of the overwhelming debt almost paralyzed me.

#2. Investment risk

I knew next to nothing about investing, but watching the stock market lurch about and imagining my money going up and down rapidly like that scared me quite a bit.

#3. Roth IRAs

First, I didn’t know anything about them. Second, I had just started investing and the risk of it wasn’t very palatable to me at first. Third, I was feeling as though my retirement savings was inadequate.

#4. Buying a car

My wife’s car was actually in worse shape then than it is now, so I was really concerned about coming up with the money to buy one.

#5. Estate planning

I was really still in the process of understanding the responsibilities that faced me as a parent, so I was starting to get concerned about what would happen to my son if I were to suddenly pass on.

Looking back on that list, I’m amused about how much has changed. The house buying was much easier than I would have ever believed, for starters, and that worry is completely gone. For the Roth IRA, I basically avoided the question by looking at my own retirement options and upping the contributions quite a bit, greatly easing my nervousness about retirement. My reading about investments and investing some myself has greatly reduced my unease about investment risk, and my wife’s car is actually doing quite well and I feel we’re well-prepared for our next vehicle purchase.

So what’s left? What sorts of personal financial issues keep me up at night?

My Biggest Financial Fears- Right Now

#1. Estate planning

This is the one holdover from last year, and it got much more important with the birth of our second child. I still don’t feel entirely right with the plans in place for a sudden death. For starters, I am rather nervous about our options for potential guardians for our children, and I also am not sure how exactly to handle income that I would earn after I pass. I need to set up documentation so that everything is dumped into trusts for them and managed by someone – and I think I know the best person to do it, too.

What do I need to do? I need to sit down with an estate planner and work through the documentation to get all of this taken care of. I also need to prepare a binder of information explaining to my wife some of the things that need to be done if I were to pass on and she were to survive me – things like how to properly close The Simple Dollar, who to contact for various accounts, and so on.

#2. Staying at home

One of the biggest debates in our life right now is whether or not one of us should be a stay at home parent. I personally think we’d both do fine at this task, but I also think that my son gets a lot out of the daycare that he attends (it really is perhaps the nicest daycare I’ve ever seen – I am just blown away by it every time I’m there). We keep twisting this around, back and forth, creating financial projections if one of us makes the leap, and so on. We both believe we could make it, but we’re both really scared to take that jump.

What do I need to do? Keep talking about it and looking at it. We’ve basically committed to a trial period with both children at daycare, and we’ve also agreed that if a third child arrives before our oldest is in school, one of us will stay at home for a few years. Also, above all else, provide a warm and loving home for our children.

#3. A third child

We’re basically in agreement about wanting a third child. We can afford it easily, and we’ve already figured out how we want to rearrange the bedrooms to make this possible (the oldest one gets a room of his own, basically, and I lose my office, but I don’t use it that much anyway). The question is: now or later?

What do I need to do? Wait until we both feel we’re ready, then go for the gusto.

#4. Our investment plan

I am constantly tinkering with our investment plan, and I often post the latest iteration for people to discuss here, because I usually learn a few things and find some new directions to investigate. I feel pretty confident about the plan I currently have, but I am nervous about implementing it.

What do I need to do? Be calm and just follow the plan. Good things will happen over the long haul.

#5. Our next car purchase

While it’s not nearly as worrisome as it once was, I’m still carefully considering our future vehicle purchases. I think we’ve got this under control, but I do have a bit of worry about my wife’s car dying before we get to execute it.

What do I need to do? Keep going with the savings plan, and be ready to go if we need to buy earlier than we’re planning.

Really, the first three worries are the ones that deeply concern me – the other two are much lesser concerns in the bigger scope of things. It’s amazing how things change over a year, though.

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  1. Laura says:

    You’ve accomplished a lot in the last year. You should feel great about it. I wish you well on your future financial plans.

  2. Dawn says:

    Estate planning needs to be a priority for everyone. My mom died quite suddenly in her sleep at the age of 58 from a pulmonary embolism. My parents had not dealt with this possibility and it was devastating for my dad. Besides the obvious legal documentation that should have been handled, my mom had never consulted dad on much of their household financial business. He didn’t know anything. No account numbers. Where important documents were located, etc… The point I’m trying to make is when one partner is primarily responsible for handling the household’s finances make sure to keep the other partner informed. It really is crucial and can save many headaches during a time of grief and mourning.

  3. Sabrina's Money Matters says:

    I believe wills and these types of documents terrify people because they think it means you’re thinking about death. It’s not that at all, you’re thinking about your family and how they will be cared for. It’s not such a terrible thing. What’s terrible is what the previous commenter mentioned, having nothing in place and everything being frozen up in probate. Leaving your family to come up with all kinds of resources that may not readily be available.

  4. Bill says:

    Hmmm…most third kids I’ve known have been surprises – parents weren’t as careful after the first couple of kids… :)

    Estate planning is critical – at your age life insurance is essential (but cheap)

    You’ll want power of attorney for finances and for health care decisions, since short or long-term disability is far more common than a sudden death.

    I was very thankful mom had revised her estate plans, including her financial and health care powers of attorney around age 50.

    That was the year before she was diagnosed with a slow, but terminal illness (non-Alzheimer’s dementia)

    >A third child We’re basically in agreement about wanting a third child.

  5. m says:

    It’s so nice to read of your progress because I am in many ways where you were. The idea of buying a house simultaneously excites and terrifies me. I need to learn about investing and so on. Knowing you’ve been able to move past all that give me hope.

  6. I have to admit I’m afraid of writing a will. I know it isn’t rational, but it brings home a bit of reality that I haven’t had to face yet. It is on my list of things to do soon though. I’ll just keep my fingers crossed until then…

  7. mamacita says:

    I meant to say this at the earlier post — I am interested to know what happens with the minivan. We are in the same position. The Odyssey comes up fairly often at Carmax, but Siennas are harder to find.

  8. mamacita says:

    I also meant to say, you are really an inspiration in terms of how much you have accomplished in one year. I’m using you as an example of what can happen if I put some work into my own financial planning. Keep on truckin’, Trent!

  9. Mariette says:

    Thanks so much for sharing this. Fears have such a hold over our lives and one of the hardest things is to share them with others, it’s also one of the most useful things you can do since it minimizes them a bit. It’s wonderful to see how much progress you’ve made, and an inspiration as well.

  10. Shadox says:

    With respect to the staying at home question: I suggest only do so if you want to spend more time with the kids – not out of guilt or fear that your child will be screwed up if you don’t. Kids are a very resialiant bunch, and they get a great deal out of socializing with other kids.

    My wife and I both work, and our three sons all go to day care. I could not have asked for happier, smarter or more fun kids.

    Make the right decisions, for the right reasons.

  11. Diane Vantrease says:

    Staying home with our children is a choice I do not regret. I am excited to know our children as young adults, and I am thankful for the choices they are making in life. I feel a part of who they have become.

    Even though my husband died ten years ago and I am facing the job market after being out of it twenty-nine years (twenty-two years homeschooling our children), I would not trade places with anyone.

    In response to an earlier post about not having many children’s toys, I can see why many parents would feel that way if the children were in daycare all day. Think of this: How would you feel if the daycare had no toys?

    We had a variety of toys at different ages and stages–the same with chores, pets, volunteer
    activities and part-time work. Lots of play and learning activities can overlap. A five year old playing with a cash register and play money (real coins but paper bills) can learn FROM his play. Your little son and daughter will have lots of teachers in life, but only one daddy. You can maximize your influence on them by being home more. Even now at their young ages, they are your greatest joys. Now multiply that by the number of years you can be their daddy.

  12. Meg says:

    I hate to give unsolicited advice…but since you’re posting this for all the world to comment on, I guess you’re sort of asking for it. :-)

    Personally, I think sooner is better as far as having your third child. I don’t know how old you two are, but if your wife is over 30, it could take awhile for you to conceive (many women are stunned when they have problems as early as their late 20’s because the media makes it seem perfectly possible to conceive any time you want). You might find yourself having to spend lots of money on fertility treatments, etc. simply because you waited for no particular reason. Additionally, I think it’s really beneficial for the kids when siblings are close together in age–plus they can entertain each other and it minimizes the years you’ll spend with small children running your lives. :-)

    Secondly, I would think twice about one of you staying home with the kids, even when/if you have a third. Most parents make this decision based solely on what is arguably best for the family right NOW, but that decision has huge implications on your career, family, earning power, and sense of fulfillment for the rest of your lives.

    It is much more difficult than anyone realizes to get back into the workforce, even after just 6 months out of it. This goes for men and women, but age and sex biases are much worse (and very alive and well) for women. Blue collar workers don’t encounter problems as often, but the biases are very prominent in fields like law, finance, media, technology, etc. Most women leave the workforce fully intending to “opt back in” at some point–but many fewer are able to do so, and almost none are able to pick up anywhere near where they left off in terms of status and salary. The years you have with children who need high levels of care are relatively few; it isn’t usually worth it to sacrifice future decades of an empowering and satisfying career and earnings for those few years at home.

  13. Diane Taylor says:

    I’m an older reader and have already raised and college educated 2 kids. I’ve been wondering when you would ponder one of you staying home with the kids. Some decisions you make because they are the “right” thing to do regardless of the financial implications. You will never know all the things you are missing out on with your kids until you are actually “raising” them yourself. It isn’t just the kids that benefit, my greatest “mom” moments occured when other parents were working….parent participation preschool, Halloween school parties, tennis league championship matches…on and on. It’s fun to “be there” for your kids.

  14. Kyle says:

    Diane, I could not have said it better myself! I find it sad that kids today seem to be treated like luggage and shipped off to daycare so both parents can fulfill their professional career. Why did you have kids in the first place? My best memories and the events that shaped my life were formed by my parents, especially my Mom who was there everyday growing up. Today, my wife is a stay at home mom to our 3 kids and we would not have it any other way. The one comment above about how you should only choose to stay at home with your kids if want to spend more time with them, I don’t understand that type of thinking. Sad.

  15. susan says:

    So Kyle you’re saying you can’t have kids and a career???

    I’m a working mom of 2 great kids and have used childcare. Are you saying I don’t have great memories with my kids?

    I’m sorry but what year is this again??

  16. Sharon says:

    Well, Look at the perspective two years can give you on fear of investing…

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