Resist the Fear Factors in the Economy

Suzanna de Baca -- Expert Business Source, 12/1/2008 2:16:00 PM

I spent Thanksgiving weekend visiting friends and one of my friends’ small children had the croup. His sore throat and painful cough made him grumpy, and he uncharacteristically threw several outsized tantrums. At two and a half, he has good verbal skills under most circumstances but when overcome by illness, he could not verbally express what was wrong or what he wanted.  He clearly felt overwhelmed.  It dawned on me that this behavior is not too different from what I’m witnessing with a lot of adults during this period of economic uncertainty. 

This prolonged period of volatile markets, layoffs, and economic decline have taken their toll not only on many Americans’ bank balances, but also on their emotional wellbeing. The stress of watching other investment accounts evaporate, worrying about job security, or managing a business in such unpredictable times can wind us up and make us overly sensitive. Just as sick children can feel overwhelmed by their illness and become unable to express their specific aches and pains, a long interlude of economic stress can make it difficult for us to maintain perspective and express our fears clearly. 

One thing I’ve noticed about this economic period is a certain sort of vague, undefined fear among many individuals. When I hear people talking about the economy, the worry tends to be along the lines of “What will happen?” Many Americans seem to feel a generalized panic, with a sense that more trouble is sure to come. 

Generalized panic is much like what my friend’s child was feeling: he just felt all-over bad and everything seemed to contribute to his suffering. If we can break down our fears about the economy or about our own financial situations, it can a helpful way to cope.  Trying to define the underlying fears enables us to gain some control over our worrying, because it allows us to address each fear specifically instead of trying to deal with a giant cloud of generalized panic.

For example, many people today are panicking about the economy, but the underlying fear is about their job security. However, in many cases, individuals simply worry. Worry alone will not provide positive results or create options. Instead, people in this situation could be reviewing budgets, cutting expenses, and polishing up or sending out resumes. Getting on the phone and networking can open up doors and can also show you that others are in similar situations. Taking some action can provide relief, but you can only take productive action when you can define what the issues are.

Resist giving in to blanket fear about the economy. Try to define what is really bothering you. Is it your job security? Is it your current budget or financial obligations? Is it your long term future? Consider the specific components of your concern and address each worry separately, rather than feeling overwhelmed by the bigger picture.

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