Coping with Economic Fear and Uncertainty

Suzanna de Baca -- Expert Business Source, 11/11/2008 7:24:00 AM

As the markets continue to swing and the future of our economy remains uncertain, people are reacting in very different ways. While some people embrace uncertainty and change, a far greater number of individuals find these events stressful and even debilitiating. If you’re in the latter group, what can you do to cope when it’s nearly impossible to predict what will happen in the economy?

There are concrete financial steps you can take to protect yourself financially if you’re feeling uncomfortable about your economic future. As countless advisors (including myself) have been counseling, it is a good time to review your budget, reduce spending, pay down debt, sock money away in savings, and deal objectively and with your investment portfolio. Easy, right? 

If only it were so easy! What about the emotional part? What about the waking up in the middle of the night, wondering about your job, your dwindling investments, the kids’ college fund, your retirement dreams, or even the health of your company? Few of us deal with money on an entirely rational and practical basis, because (rightly or wrongly) money represents so many emotionally loaded topics: status, responsibility, maturity, independence, success, and security, just to name a few.

Happily, there are also some ways to take care of yourself emotionally in difficult economic times. 

If you are feeling overwhelmed by financial uncertainty, it can be helpful to first try to identify what particular issues are plaguing you. Many people just feel generalized fear and are less aware of the complicated issues swirling underneath that terrible feeling. Change – or even the prospect of change—can throw us off balance, make us unsure of ourselves and even question our ability to adjust.

Rather than be consumed by feelings of panic or dread, ask yourself some concrete questions about what kind of changes might truly happen and what information or perspective you need to trust and accept those potential changes.  Finally, ask yourself what strengths you possess that can help you get through this challenging time; it is likely you’ve survived uncertainty before and already have many healthy tools to help you get through this period of uncertainty.

For example, you might ask:

How is or how will my day-to-day life be affected by this uncertainty or change?  Will my living conditions change? My job? Or is it the thought of future plans being disrupted that is causing distress?

Will my actual work be affected? What can I do to prepare if I feel my job is vulnerable? If my job is safe but my co-workers are panicked, how can I stop listening to conversations that disrupt my peace and productivity?

How will these changes or lack of answers affect my personal relationships? Will my tension or stress create more tension in my relationships? 

Will this change alter my marriage or my relationship with my children? Will my family still love me even if we might need to make changes? Have they stuck with me through challenges before?

How will this change or uncertainty affect my personality? How am I allowing it to affect my personality?  Am I taking good care of myself physically and emotionally? Am I beating myself up for past actions and adding to my stress, or am I forgiving of myself and looking forward?

Will I be better off resisting change or allowing it into my life? Am I closed to new ideas or new opportunties which might offer growth? Am I so set in my ways that I can’t envision change as having positive outcomes?

What will happen if I do not make changes and stick to my old way of thinking or behaving? What kind of different changes or losses might happen then? 

What information do I need to allow change or to make decisions? Where can I find that information? Will historical data help? Economic reports? Reading about how others have dealt with change? Can I have peace of mind even if I do not get exact information I want? Can I trust that I will make good decisions and find solutions?

Do I have beliefs, behaviors, opinions, or attitudes that are limiting me from adapting? Do I have specific ideas of how things should be that are blocking my ability to find solutions? What do I need to do, or what do I need to let go of, in order to accept change?

Suzanna de Baca is president of Private Capital Solutions Group. Securities offered through Broker Dealer Financial Services Corp. Member FINRA & SIPC. Investment Advisor Representative of Investment Advisors Corp., A Registered Investment Advisor.  Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal or investment advice. Although the information has been gathered from sources believed reliable, please note that individual situations can vary, therefore the information should be relied upon when coordinated with individual professional advice.