31st May 2016 at 10:23am
Some years ago while I was a teaching assistant, I did a training course called ‘How to teach students with math anxiety’.
I didn’t have a clue what it was going to be about. It turned out that it was about so-called ‘math anxiety’, a well-documented problem that affects a lot more people than I realised, particularly girls and women.
Some people who are otherwise perfectly intelligent and confident going about their day-to-day lives have an irrational fear or mental block when it comes to doing any sort of maths. Even basic arithmetic such as splitting a restaurant bill can cause a panic.
Anxiety can affect your decisions…and your finances
The same anxieties and fears often apply when it comes to people making decisions about where to invest. This can result in them avoiding making a decision altogether, preferring to leave their money in a bank or building society instead where it’s unlikely to grow enough to fund their futures.
Or potentially, and just as bad, to panic and pick a random investment that’s completely inappropriate for their goals and needs.
The good news is if you have investment anxiety, you’re certainly not alone and you can overcome it and get to a place where you can make sensible decisions.
Face up to your fears
Don’t bury your head in the sand – for two reasons.
- As you probably know all too well, the earlier you start to save the better. In terms of your pension savings, starting early could mean you can start enjoying your retirement sooner.
- Secondly, and just as importantly, where you’re invested can have a huge impact on how much you’ll have when you come to access your money.
Remember that you don’t have to be an expert. In the same way that you can drive a car without understanding how the engine works, you can invest without understanding what’s under the bonnet.
There are plenty of packaged investment options designed to meet specific needs or goals which are managed for you by experts.
If, like many people, you’re more concerned with the amount of risk you’re taking with your investments than the returns you’ll get, some of these options also let you choose by risk level.
Don’t be put off by jargon. Financial companies sometimes use jargon and technical language when talking about investments. Thankfully this is getting better as there’s growing recognition of the importance of helping customers engage with their finances.
If you’re interested in building up your investment knowledge further, there are many places where you can find clear and understandable information. Our own MoneyPlus blog is one of these, or look at the guides section of our website.
Take it slowly. Like learning anything new, it takes time to build up investment knowledge. But as this increases and your confidence grows, you might feel comfortable trying new things. Some packaged investment options allow you to make easy changes, for example to the amount of risk you’re taking or the goal you’re targeting.
Know your limits. As with most things in life, there are times when it’s easy to do it yourself, and others when it’s best to call in the experts. Making investment decisions is no different. There are some things you can navigate yourself, or with help and guidance from friends and family.
But in some cases, getting expert help can reduce stress, save time and, importantly, mean you can get a better outcome.
Remember that even many experienced investors enlist the help of professionals to build and manage their portfolios. Read more about this in our DIY or Delegation? blog.
Believe in yourself – you can do it
Investment decisions are no different to a lot of other complex decisions you have to make every day. These will often involve assimilating large amounts of information to help you reach decisions – for example researching and planning a holiday, comparing insurance, buying a house or planning childcare.
And for proof that you can overcome this type of anxiety, I’ll end with a personal anecdote. My younger sister was very much a sufferer of ‘math anxiety’ while she was at school. She would often say ‘I can’t do maths’ and she dropped it as a subject as soon as she could.
But, by gradually building on her knowledge and confidence, she not only fully overcame her own anxiety, she now holds a Master’s degree in teaching mathematics to children, and this means she can help others overcome their anxiety from a young age.
The information in this blog and any responses to comments are not financial advice. The value of investments can go up or down, and may be worth less than you paid in.