Financial Literacy

Fear Of Running Out...

Overwhelming Majority of Consumers Have FORO-
Fear of Running Out of Money

Washington, DC – As the children across America select their scary Halloween costumes, their parents are experiencing real-life fears. A recent poll conducted on the National Foundation for Credit Counseling® (NFCC) website, revealed that 92 percent of respondents have a fear of running out of money (FORO).

The root causes of the fear vary, with the majority (64%) fearing they will not have enough money to pay each month’s bills. Other causes include the fear of not having enough money to comfortably retire (14%), to satisfy unplanned expenses (11%), or pay for their children’s education (3%). Only eight percent of respondents indicated they do not have FORO.

“The focus on immediate needs, as opposed to future ones such as retirement, reflects the uncomfortable financial situation in which many Americans live month after month,” said Gail Cunningham, spokesperson for the NFCC. “Entering the holiday shopping season already struggling to meet existing debt obligations will only add more pressure on the family.”

Finding stable financial ground today will relieve stress and allow planning for future needs to begin. To get started, the NFCC suggests that consumers put the following five steps in place:

Track spending
A leak can’t be plugged until it has been identified, and finding a financial leak starts with tracking spending. Have everyone in the family who spends money write down their spending for 30 days. It is critical to include incidental spending, as small leaks can add up to be big problems. At the end of the period, have a family council to review the spending, making joint decisions as to how the money should be spent moving forward. Make necessary cuts and allocate the money toward the categories that the family determines are most important. The unity that results from this type of decision-making process will likely produce a greater level of success, as everyone will be pulling in the same direction.

Create a cash-flow calendar
This is perhaps the easiest step, but will increase financial awareness by being able to see the overall picture at-a-glance. On a calendar devoted to finances, record all sources of income and the associated paydays. Next, note which bills are due to be paid during the various pay cycles. If there’s not enough money available to meet a debt obligation on its due date, call the creditor and find out if the date can be moved. This will prevent overdrafts, late payments and fees.

Begin saving
People without a well-funded saving account are living on a slippery financial slope, as unplanned expenses are inevitable. However, when money is tight, saving is often low on the list of priorities.

To remedy the situation, consider living on a cash basis, as people who pay with cash typically save 20 percent over their previous spending on plastic. Pretend that any raise, bonus, birthday money or other windfall money never happened and instead direct it toward savings. Aim to build up the rainy day fund to equal one month’s salary, as this should be sufficient for most short-term emergencies.

The focus on immediate needs, as opposed to future ones such as retirement, reflects the uncomfortable financial situation in which many Americans live month after month

Decrease debt – Debt is expensive
Carrying debt over from month-to-month results in paying interest on top of interest, making the debt even more difficult to eliminate. Further, debt is a barrier to moving forward in life, as it often prevents saving, investing, or making life dreams such as family vacations or launching a new business come true. Start by facing the financial facts. Write down and total the existing debt and associated interest paid each month. The totals may be shocking, but will hopefully spur action, as ignoring the problem will only make matters worse. If help is needed to create a realistic debt repayment plan, reach out to an NFCC member agency.

Set goals – A goal is only a dream until it is in writing
Make a list of short-term goals for the next 12 months. Make a separate list of long-term goals. Now go back and include dates and dollar amounts with each goal and decide which can realistically be met. Goals that aren’t achievable only serve to discourage and potentially derail the entire plan. Knowing the objective, timing and financial commitment necessary to meet the goal will bring a sense of purpose to overall spending decisions.

“Fear and worry can impact more than a person’s finances. People owe it to themselves and their family to find solutions to financial concerns before they negatively impact other areas of their life,” continues Cunningham.

Make today the day you take action to resolve the financial concerns that have been haunting you. Reach out to an NFCC member agency for help. Whether in-person, by phone or online, spending time with a certified financial counselor will be time well spent. To be automatically connected to the agency closest to you, dial (800) 388-2227 or to locate an agency online, go to

The September poll question and responses are below:

I have FORO, the Fear of Running Out of money
A. To comfortably retire = 14%
B. To pay each month’s bills = 64%
C. For my children’s education = 3%
D. To satisfy unplanned expenses = 11%
E. I don’t have FORO = 8%

Note: The NFCC’s September Financial Literacy Opinion Index was conducted via the homepage of the NFCC website ( from September1–30, 2014, and was answered by 1,391 individuals.






The National Foundation for Credit Counseling (NFCC), founded in 1951, is the nation’s largest and longest serving national nonprofit financial counseling organization. The NFCC’s mission is to promote the national agenda for financially responsible behavior, and build capacity for its members to deliver the highest-quality financial education and counseling services. NFCC members annually help millions of consumers through more than 600 community-based offices nationwide. For free and affordable confidential advice through a reputable NFCC member, call (800) 388-2227, (en Español (800) 682-9832) or visit