America's Top 10 Financial Worries

Four and a half million people have been unemployed for a year or more in 2010.

Americans are worried about money. The financial outlook for millions is dismal. Unemployment, the mortgage crisis, healthcare expenses coupled with no health insurance, and the rising cost of living have depleted savings, wiped out home equity and left many scrambling to live day-to-day. America's top 10 financial worries, beginning with homelessness, are not only about everyday expenses but also about the financial future.

No. 1: Homelessness

The website Forbes reports that the "bag lady syndrome" is the most common financial worry of women. Women worry about finding themselves alone, destitute and living on the streets because they lack the know-how to take care of themselves. The solution, according to Susan Hirshman, author of "Does This Make My Assets Look Fat?", is to take control of your finances with a spending, savings and insurance plan that includes living below your means and saving every penny you can.

No. 2: Retirement

In a survey conducted by the Harris Institute for the American Institute of CPAs, 12 percent of respondents cited retirement savings as their main financial concern, landing it in the top spot of their list of American financial worries. You can get on tract with your retirement savings by calculating your savings goals and making the maximum contributions to your 401(k), even if it takes you a few years of increases to reach your annual goal.

No. 3: Uninsured Medical Expenses

The Harris Institute survey also found that uninsured medical expenses are nearly as big a concern as not having enough saved for retirement. The survey respondents noted that they forgo medical treatment because they can't afford it or use a credit card, tap into emergency funds or seek loans from friends and family to get medical attention. Jordan Amin, chairman of the American Institute of CPAs, suggests buying insurance as soon as you can, even if all you can afford is catastrophic coverage. Be aware of fees for tests and treatments and the cost of prescriptions. Ask your doctor for lower-cost alternatives.

No. 4: Health Insurance Costs

Health insurance costs continue to rise. Employers are paying less for group healthcare for their workers. Also, many Americans are left with rising premiums or being unable to afford healthcare coverage. Choosing a high-deductible health plan will lower the cost of health insurance and make it more affordable to maintain coverage, but it also leads to higher out-of-pocket costs for office visits and treatment. Find out if you qualify for a health savings account. These tax-deferred accounts allow you to deposit money into an investment account that can be used for many out-of-pocket medical expenses. Unused money in your account is rolled over every year, earns interest and, if left untouched, can help pay for medical expenses in your retirement years.

No. 5: Job Security

A weak economy has left millions unemployed and even more not sure about their job security, or what they would do if they lost their job. According to the United States Bureau of Labor Statistics, 14.6 million people were unemployed in the second quarter of 2010. Forty-six percent had been unemployed for at least 27 weeks and 31 percent had been jobless for 52 weeks or longer. Look for ways to earn extra income, find a second job and live below your means to help prepare for the possibility of unemployment.

No. 6: Debt

Consumer debt and the associated costs are among the top financial worries for both men and women in America. Getting out of debt is one of the best money moves you can make. Staying out of debt is even more important. Stop using credit cards, make more than minimum payments on your cards, seek credit counseling and adjust your spending habits, if necessary, to pay off debt as soon as you can.

No. 7: College

Americans are not only behind on their retirement savings, they also are failing to fund their children's education. The financial experts at Bank of America recommend prioritizing your retirement before saving for college. Financial aid, student loans and scholarships will help pay for your child's tuition, but not for your retirement.

No. 8: Financial Scams

According to Forbes, the fear of falling victim to fraud is one of the top reasons why women fail to adequately invest their money. The New York State Office of the Attorney General lists unsolicited phone calls, faxes, emails, high pressure sales pitches and promises of extremely high returns as common indicators of investment scams. Educate yourself about investing. Never blindly sign any contract. Find a financial adviser you can trust and who will take the time to answer your questions and address your concerns.

No. 9: Caring for Aging Parents

The majority of caregivers for elderly family members are women. Caring for an aging parent is not only emotionally challenging, it also can present financial challenges. Women often find themselves having to choose between working or being a caregiver, and carrying some or the entire financial burden of care. Consult with an estate planner to meet the needs of the people in your care. Let other family members know that they need to share the responsibilities financially as well as with time and care.

No. 10: Emergencies

Unexpected emergencies can cause severe financial problems. Women, in particular, cite this as a major concern. An emergency fund makes good financial sense when it is properly funded and maintained. According to Forbes, this fear often results in keeping too much money in low-yield accounts, which can jeopardize your net worth and long-term financial stability.

References

• Forbes: Top 10 Money Fears and What to Do About Them
• Dreyfus: Retirement and Medical Bills Top Financial Worries
• Bank of America: What Are Your Top Financial Concerns?
• United States Bureau of Labor Statistics: Issues in Labor Statistics Summary 10-10/October 2010
• State of New York Office of the Attorney General: Protection Against Fraud