Taking on financial responsibilities, such as those related to mortgage loans, is an important stage in everyone's life, which often involves fears and worries.
In this article, we aim to explore both the reasons for fear of long-term commitments and the influence of loan myths and practical ways to overcome these fears to build a desired financial life. To explain these aspects, we invited Mihaela Belous, psychiatrist resident doctor, master's student in clinical psychology and future psychotherapist.
So why are we afraid to take on our financial responsibilities and long-term commitments?
- Fear of the unknown. The uncertain future can induce a state of insecurity and fear, sometimes causing the avoidance of long-term financial commitments. From a psychological perspective, fear of the unknown can be analyzed from the perspective of uncertainty theory. People may experience discomfort and anxiety in situations where they believe they cannot accurately predict outcomes.
- Financial pressure and loss of flexibility. The pressure of regular payments can create a persistent state of stress and anxiety. The thought of constant financial obligations, such as monthly payments, can seem overwhelming, especially in situations where your financial situation is not stable or predictable. This feeling of financial pressure can be amplified by the fear of not being able to cope with unforeseen changes, such as losing your job or incurring unexpected expenses.
In addition to financial pressure, the fear of losing financial freedom can be another significant obstacle. Individuals may perceive long-term financial commitments as "chains" that bind and restrict their decision-making and flexibility in choosing a career, taking advantage of unpredictable opportunities, or quickly adapting to lifestyle changes.
- Fear of financial failure. People may experience a deep fear of failing financially and not being able to meet long-term payments. Concerns about job security and economic changes can fuel this fear.
- Social pressure. Society and social expectations can contribute to fear of long-term commitments. The existence of pressure to achieve certain achievements, such as buying a home, can cause people to feel overwhelmed.
All these fears are often reinforced by several myths related to long-term financial commitments, such as:
- The myth of financial security by avoiding loans. There is a misconception that avoiding loans is the only sure way to financial stability. Actually, responsible loan management can help build a positive credit history.
- The myth of the fixed rate as the only safe option. Many people believe that a fixed rate is the only safe option and any other type of loans is risky. However, different types of loans can offer advantages depending on individual circumstances.
- The myth that high income guarantees an approved loan. There is a false idea that a high income guarantees approval for a loan. Factors like credit history and repayment capacity are actually important aspects in assessing eligibility for a loan. Read more about credit history here.
- The myth that a loan is always a wrong decision. In reality, loans can be a useful tool for achieving financial goals, such as buying a real estate or a car.
- The myth of the interest rate as the only relevant cost factor. When it comes to loans, many focus solely on the interest rate, ignoring other associated costs such as loan closing commission fees or insurance costs.
- The myth that financial planning is only for specialists. In reality, anyone can benefit from understanding the basic principles of financial planning to make more informed decisions.
Even if the listed reasons and myths are deeply rooted in our perception, overcoming the fears related to financial commitments can open the door to a better life and to achieving the desired goals.
Here are some tips that could help you in this regard:
- Pay attention to your financial education. Understanding financial concepts such as interest, budget planning and debt management can reduce the fear associated with financial responsibilities by increasing confidence in your own abilities.
- Set realistic goals. Setting well-defined, short-term financial goals can provide a clear and motivating framework for taking on financial responsibilities.
- Access psychological support and financial advice. Consulting financial specialists and psychologists can provide an environment of support and understanding, making it easier to manage emotions related to financial responsibilities.
Developing stress management skills and increasing confidence in your ability to cope with financial situations can help reduce anxiety about financial pressure. Financial education and open discussions about expectations and desires related to financial freedom are effective tools for overcoming these obstacles and building a balanced approach to long-term financial responsibilities.
If you are ready to make long-term financial commitments to achieve your goals or you need a consultation, including from a financial expert, request a consultation in any maib branch or at the bank's mortgage center.
