Managing Anxiety in Today’s Financial Climate
It’s no surprise that the past year has been a wild ride for the markets and economy in general. While nothing is ever perfectly predictable, volatility is a term we continue to see in the news, where article after article seems to remind us to worry more about our financial futures. If you’re feeling concerned about inflation, stock prices, tech layoffs, and broad uncertainty, know that your concerns are deeply valid. However, these concerns shouldn’t paralyze or overwhelm you, and they absolutely should not prevent you from making the best financial decisions you can right now. Even in tough times, there are plenty of actions you can take to grow and protect your wealth, and often shifting to a better mindset can help you execute this. If you’ve been feeling financial anxiety, today’s blog is for you. We’re going to outline five ways to combat negative thoughts and take positive action instead.
Our first piece of advice: normalize and validate your thoughts and feelings
Money is one of the biggest sources of stress in people’s lives. While a little stress is actually good for you, high and especially sustained levels of financial stress have been linked to lots of negative physical health outcomes, social struggles and poor performance at work. The prevalence of economic stress also rose significantly over the course of the pandemic, and continues to stay high. A whopping 77% of Americans are currently worried about their financial situation, so when we say that you’re not alone, we really mean it. Those who are unbothered by finances are in the serious minority right now. Validation is a powerful psychological tool, and finding a safe space to share your concerns can be extremely cathartic. Maybe this could happen with a trusted friend or family member, or maybe you want to get professional support from a financial advisor or therapist. No matter who you choose to talk to, or how you do it, we recommend finding a way to verbalize your feelings. Try to keep in mind that statistically speaking, even the expert advisor or therapist you talk to has financial concerns of their own!
We’ve written about money dates before, and these can be a great way to open up the conversation. You don’t have to get super deep on every topic of concern, especially since that can be both flooding and triggering for both parties. Picking one (even small) area to focus on at a time can be therapeutic and beneficial to your mental health. Normalization and validation can help us feel heard and supported, which can in turn empower us to problem solve more effectively.
Consider the worst case scenario, but don’t catastrophize it
This heading might seem a little counterintuitive, but let us explain…
Considering the worst case scenario can be a good exercise to reduce anxiety and depression. This strategy, which is unintuitively called decatastrophizing, is often employed in cognitive behavior therapy to help people examine whether their concerns might be blown out of proportion. For instance, if your biggest fear is losing your job, it can be helpful to visualize how that event would actually play out. What would happen next and how would you react? Maybe you assume that losing your job would mean you end up homeless, but how likely is that to actually occur? Is it more likely that you would apply for new jobs? Collect unemployment? Do you have friends or family members who would take you in if you needed somewhere to live? Do you have a partner who would step in and support your needs temporarily? Do you have savings that could offset some of the inconvenience? Going down the rabbit hole into these mundane details is often a major relief for people and helps them realize that the worst case isn’t actually life-threatening. Many people also discover that they have an arsenal of skills and resources that would help them survive and perhaps even thrive in difficult circumstances. Questioning the rationality of your catastrophic thoughts might seem daunting or scary (no one really wants to face these issues head on), but it’s a powerful exercise worth trying.
Take bite-sized, positive action
Do you ever wake up and think, “okay today is the day I get my life together!”, and then promptly get overwhelmed thinking about all of the things you truly need to do to make that happen? The same issue happens with our finances. It’s often just too much to process how many small things we can or should do to improve or safeguard our wealth, which can cause us to freeze and end up doing nothing at all (ultimately perpetuating this cycle of anxiety and inaction). So instead of getting caught in this loop, ignore the macro and focus on micro accomplishments. Don’t worry, your brain will derive plenty of happiness from these small positives. Perhaps it’s opening up a high-yield savings account, consolidating credit, or adjusting the contribution rate on your 401k, if you keep a running list of to-do’s and pick one or two to achieve per week, you’ll reap plenty of emotional and practical benefit in both the short and long term.
Accept the things you cannot control, but prepare for them as best you can
It’s scary not knowing what will happen with stock prices, employment or inflation. This can make it feel like solid planning is futile or impossible (hello catastrophization…) and that you can’t prepare adequately. But of course, this is not the case. Remember that no one can control the markets or employer decisions, and that you alone do not control government policy making. Develop coping strategies that work to handle this. You might try meditating, exercising, or other forms of self care to create space and strength to exist in a space of uncertainty. Instead of feeling defeated by these big-machine issues, you could look into concrete steps you can take to set yourself up for success. Practically speaking, you can pad your emergency fund, analyze your expenses and pick areas to cut back, revamp your resume, and scan through competitive job postings. It never hurts to have more savings, and remember that staying the course with your long term investments is still a great strategy.
Get the right help for your problems
There is no shame in asking for help with your finances and/or mental health. The most happy and successful people usually do both! Of course, we recommend finding a financial advisor to work with and help you get organized and set up to grow wealth and increase security. But if your emotional state is holding you back, finding a therapist can also make a big difference. A great resource to do this is Psychology Today, where you can search for therapists in your zip code and with the specialization you need, and then cross reference the results with your insurance coverage (if you are lucky enough to have those benefits). Professionals exist for a reason, and if you have the resources to take advantage of these offerings, doing so can change your life for the better.
Hopefully this blog has provided you some useful inspiration to get unstuck in your thinking and improve your financial and emotional wellness. Above all, we hope that you treat yourself with kindness, compassion and love in these crazy times.
Madison Elliott is a UX Researcher at Google. Madison leads data engineering and usability at Mana Financial Life Design (FLD). Mana FLD provides comprehensive financial planning and investment management services to help clients grow and protect their wealth throughout life’s journey. Mana FLD specializes in advising ambitious professionals who seek financial knowledge and want to implement creative budgeting, savings, proactive planning and powerful investment strategies. Madison brings her combined background in cognitive science, computer science and clinical psychology with her professional UX design and engineering experience to optimize workflows at Mana FLD and improve people’s lives.