personal finance

Does Money Terrify You?

Photo-Illustration: by The Cut; Photo: Getty Images

Farnoosh Torabi is a best-selling author, speaker, and host of the podcast So Money. She’s also an expert on fear and anxiety — specifically her own, as a lifelong worrywart. And she wants to convince you that you should be, too. “Fear gets a bad rap,” she says. “But it’s actually a powerful and helpful tool that we should get more comfortable sitting with.” In her new book, A Healthy State of Panic (out October 3), she explains how to cozy up to your fears and listen to what they’re telling you — or, in some cases, overcome the fears that are holding you back. Here, she talks about how to confront your worst-case scenarios, plan for layoffs and recessions, and feel more confident even when you’re doing something terrifying.

In your book, you talk about how fear should be embraced — not fought and overcome as most of us are taught. Can you share what you mean about what it is to be “constructively” afraid, versus when it’s not constructive?
What I mean by being constructively afraid is understanding that fear can be an opportunity to get clearer on what we want to protect, and what we value. But culturally, we have been told that when fear shows up, it’s bad, and we should try to get rid of it as soon as possible, either by trying to ignore it or by getting away from whatever scares us. Our instinct is to react too quickly. But that’s often not healthy, because it leads to irrational choices, choices that are not necessarily aligned with whatever your fear is trying to tell you.

I think it’s really important to listen to fear, and to give it your attention. We don’t even give it a breath. To see fear as a potentially helpful tool that has an important message to share is the way to use it constructively. Fear is not going to go away just because you tell it to. In fact, it will probably just compound.

What does it look like, to pay attention to your fear?
Ask yourself questions about your fear. You still might not want to do the thing that scares you, and that’s fine. But noticing your fear and exploring it is still a worthwhile exercise, because through that, you learn about your values, the trade-offs that you’re not willing to make, and your risk tolerance. These things are important to know when we’re weighing opportunities and making decisions.

I know from personal experience that fear can keep us stuck — I’ve stayed in terrible jobs, for example, because I was afraid that I couldn’t live without the paycheck. What are some ways to confront those fears in a way that makes sense?
I think when we feel stuck, it’s because we are not clear on what would make us happy. Happiness is often tied to security, the feeling of certainty and safety. For me at least, growing up, that’s all I wanted. Along the way, I had to learn how to leave room for fun and spontaneity and risk, too. But I don’t regret being that person who was, first and foremost, really intent on creating security for herself, especially as a woman. Sometimes fears of being unsafe or financially insecure are very valid. That said, you should still question them, especially when you reach a point where you know that they might be holding you back.

Something that I struggle with is understanding the difference between listening to fear that’s telling you to avoid something, versus the power that comes from confronting a fear and moving past it. I know that you’ve done stand-up comedy, and for a lot of people that would be a nightmare. How do you toe the line between knowing when to run towards a fear versus knowing when to avoid it?
Stand-up comedy is a great example of a situation where I could have easily not done it, but I had this nagging desire to do it, even though I was scared for a host of reasons. I was scared of failing. I was scared of the time commitment, doing this extracurricular thing that was going to take from my family and my work responsibilities. So I was like, “What’s going to make me feel safe while doing this scary thing? How can I set myself up for success to the best of my ability, knowing that there are a lot of externalities that I can’t control?” I can’t control drunk people in the audience. I can’t control people not understanding my jokes. I can’t control the heat under the light. But what I could control was my preparation. So I decided to take an eight-week class, and learn the mechanics of writing comedy. Sometimes you’re afraid because you’re not educated and you just need more information. And that’s a good reason to be scared, in my opinion.

There’s this culture of, “Do it anyway. Just be fearless. Go to an open mic and riff and bomb and add it to your battle scars.” That might be great for some people, but it’s not for me. I need structure. I want some tools. The best comedians, the ones we see on Netflix, have been telling their jokes over and over and over and over again for years, perfecting the timing and the pacing and the word choices. It is a craft.

So I approached it like a lot of things that I do — almost academically. That’s my way of getting confident. That’s not everybody’s way. But part of your question is about how to know when to push through a fear, versus just not do the thing you’re scared of. The difference is that stand-up comedy is something that I’ve always wanted to pursue. I was that kid who loved to perform, and do improv. And in my late thirties, approaching 40, I was like, “I want to do this.” I thought that was worth the risk. This book came out of my stand-up, because I went up on stage and told some stories about my life, and then I put a video of it online.  A literary agent watched, and was like, “These stories are interesting. Do you have more? This could be a book.” That was the unexpected gift of the fear of putting myself out there. I prepared and it paid off.

So many people have very abstract fears about money and not being able to afford their lives. On the one hand, I can understand it — most people should save more — but on the other hand, the economy is objectively doing really well. How do you reconcile these fears?
I think that typically, when it comes to money fears, we live in the abstract, which is not healthy. We think, “What if there’s a recession? What if the stock market tumbles? What if the next hurricane floods my basement?” We live in this cloud of obscurity when it comes to financial worst case scenarios, but that only leads us to spiral. It’s better to distill that worst case scenario, and get really clear on how bad things could get. Don’t just throw out a hypothetical. Actually examine how that worst case would hit home for you, how it would impact your day-to-day life and your ability to spend, save, and invest.

For example, if you are worried about a recession, that’s valid, but I think you want to take it ten steps deeper and more specific. What would happen if you lost your job tomorrow, and your company only gave you a two-week severance? It’s better to come up with a solution to that scenario now, before that ever happens.

The first thing I would do is educate myself. What is my company’s severance policy? What do I have in savings? How much am I actually spending? How long would I be able to not work? Doing the reverse math could temper your fears, or it will give you a more realistic sense of what you’re facing. Then you can start to create safety nets for yourself before that scary thing actually happens. You could scale back some of your spending. You could start to look for other jobs, if you really think that your company is on the verge of layoffs. I’m not trying to catastrophize — I think it’s really healthy to have contingency plans. Getting prepared, just in case, has always been a great way to use fear around money.

I also think that some people avoid their fears around money because their backup plans are nonexistent — they don’t have savings, and it’s really hard for them to pay their bills as it is. What happens if a worst case scenario leads you to a place where you really couldn’t cope?
Money’s important. I wish everybody just had more money, but I know that isn’t the solution. The fear of money sometimes dovetails with the fear of uncertainty, and I think that’s what I’m hearing in your question. “I have a fear of money, but it’s because I have this uncertainty around my ability to support myself. If I knew that I was going to lose my job in six months, there’s still no way that I would be able to prepare for that.” But is there?

I think sometimes we underestimate our resources, which is not just money, but also the people we know, and our own ambitions. If you actually did know that there was going to be a layoff in two months, would you really just do nothing? You might update your LinkedIn profile, or you might reach out to your network. You might start interviewing. You might start side-hustling on the weekends, just to bring in a couple extra hundred bucks a week.

I think fear can be a reminder that we actually have a lot within our control. It may not be access to money, but it’s access to other riches, like your community. There’s a lot of free tools out there. You could work with a credit counselor. You could even go to your employer and have an honest conversation, like, ”What’s going on? I’ve worked here for 12 years and I want to manage for risk. If you think that our team is going to dissolve, are there other openings?” It prompts you to be an advocate for yourself. Sometimes people don’t realize that they have these resources, and that their fear is actually a calling for them to be more vigilant and more proactive about what they need.

What should you do when you realize that your fears around money are maybe not serving you? I think a lot of people approach money with fear around scarcity, and that can cause them to make decisions that aren’t smart.
When I say that you’re afraid of money in the book, you’re really afraid about your relationship with money. Money is just a tool — it’s not a problem. The problem is how you’re relating to it. If you recognize that you have this nagging fear around scarcity, which you know is irrational because you’re resilient and you’ve always been able to find work, then I think your fear is telling you to detach yourself from this false narrative in some way.

Sometimes these myths are very heavy and difficult to let go of. I personally had this fear of making too much money. I was the breadwinner, and we did well. I felt like we had “enough.” The reason that I had settled at that, and didn’t want to push the envelope and make more, was because I had a fear that it would come at the expense of other things I valued. It was going to cost me my time, it would strain my relationships with my kids and my husband. So I just stopped short.

Then I worked with a money coach, and she helped me work through my fears around losing my time and my relationships. She encouraged me to raise my prices [for speaking, consulting and workshops] and invest in an assistant to help me do more of the day-to-day stuff, so that I could work on bigger ideas that were more lucrative. That exploration of my own fear led me to make some really powerful moves in my life. Again, I had to ask questions — how do I reconcile my desire to do this scary thing with my goals of protecting what’s sacred to me? That overlap is where I need to live, and where I need to plan.

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Does Money Terrify You?