You Can’t Afford to Be Afraid of This Money Quiz

Now is a popular time for people to seek thrills at a haunted house. In a weird way, being scared can be fun sometimes. At other times, we are faced with a choice where, no matter what we choose, it seems either result is scary. That doesn’t sound fun.

Here are five situations where both choices are scary. Which way would you go in each case?

1) You are the main breadwinner in your family. You have dependent children. If you died it would be a hardship for your spouse to raise them without your income. Do you get life insurance?

Scary Choice A: Decide to get life insurance which likely means seeing a doctor first and probably having your blood drawn. Doctors? Blood? Scary! Plus, you have to pay out hundreds of dollars a year in premiums. It might mean having to cut back on haunted house excursions.

Scary Choice B: Don’t get life insurance. Be scared that any accident or illness could have life ending consequences and financial struggles to your loved ones.

2) You have been given a pile of intimidating legal forms to fill out with titles like Health Care Proxy, Financial Power of Attorney, Advanced Health Care Directive, and Do Not Resuscitate Order.

Scary Choice A: Acknowledge your mortality. You may one day be incapacitated and unable to provide caregivers with instructions regarding your wishes. That’s scary to think about. Filling out these forms is an unpleasant reminder of a future we’d rather not consider.

Scary Choice B: These forms are just too scary to even pick up. Run away and ignore them. Of course, the scary result is your loved ones won’t have the legal documentation to enact your wishes regarding end-of-life choices.

3) You pay for your expenses through your checking account. If you run low you can spend money using your credit card. You don’t reconcile your spending to your bank statements each month because it is a hassle.

Scary Choice A: You decide you are going to look at how you spend money each month and make sure your records match up to your bank statement. That can be scary because you will see where your spending choices may cause some buyer’s remorse.

Scary Choice B: You decide to ignore those annoying bank statements. If someone gets unauthorized access to your checking account or credit card, you won’t know. If you get charged avoidable fees, you won’t know. If your spending patterns are out of whack with your income level, you won’t know. Pretty frightening.

4) You and your spouse don’t agree about money. You figure you could spend more wisely and save more, but you have different goals and priorities.

Scary Choice A: Sit down and have “The Talk.” Review how your spending habits are impacting your ability to pay off debt and save more for upcoming purchases and retirement. This all sounds incredibly uncomfortable and creepy.

Scary Choice B: Just let life happen. Argue later when there is too much month at the end of the money. Feel resentful over spouse’s bad money habits. Act like there is no hope because people can’t really change how they spend. Are you afraid yet?

5) The average household has saved less than $500 for retirement. The average monthly Social Security check is $1,400. You know you could use your 401(k) or an IRA to save more money for retirement.

Scary Choice A: Review what your retirement will look at based on your current level of retirement funding. This can be terrifying because the number may be much lower than you wished. Take steps to increase savings to reach the level of retirement income you want. Tip: the earlier you start, the less you need to commit to retirement thanks to the power of long term compound interest returns.

Scary Choice B: Procrastinate any retirement planning because you have other priorities now and you can always catch up later. The big scare will come later when you realize by waiting you sabotaged your chance to have a decent size retirement nest egg.

How did you do on the test? Did you mostly answer A or B? Most people, being honest will have answered B more often because it requires less effort. People are pretty good at letting life happen with minimal decision making. That is scary to think about.

It can be equally chilling to choose answer A because people are generally uncomfortable with change — and all these actions require us to do something differently. However, once you get past the initial fright, it results in life getting much less terrifying because you have taken steps that better prepare you for financial success.

So, get scared doing answer A!

Which step would you do first?