Financial Anxiety

“Be anxious for nothing,…” are familiar words from the New Testament book of Philippians. Although many of us believe that we should indeed live that way, we are asking ourselves how this is possible. How can we help being anxious when everyone’s speech is peppered with words like “financial crisis, economy, bail-out, default,  stimulus, recession,  nationalization, socialism, etc. ?  Wherever we go, people are talking about the economy. In our homes, at work, at church, at the dentist’s office, at the grocery store, it is THE topic of conversation.  Almost everybody is seriously worried. The specific term for this feeling of worry is anxiety. My copy of Chaplin’s Dictionary of Psychology defines anxiety as the “…feeling of mingled dread and apprehension about the future without specific cause for the fear.” Fear is different from anxiety. Fear is something vivid from which to escape. Anxiety is the perception of danger looming but with uncertainty about the nature or direction of the risk.

Anxiety is about ambiguity and uncertainty. We are all wondering: How will this financial mess affect me and my family? Will I lose my job? Will the value of my home and investments recover? Can I afford to retire? How will I pay for my children’s education? Will my taxes go up? What makes us anxious is the great unknown.

Certainly, I am not attempting to minimize the seriousness of our nation’s economic problems, nor am I advocating a “head in the sand” type mentality. What I do suggest is that we refuse to be controlled by financial anxiety. Let’s look at what we can do to deal with these issues. First of all, stop looking for a catastrophe. Many people have a tendency to assume the worse and make bad things catastrophic.   Don’t fall victim to “the sky is falling” type of news. Don’t confuse general economic conditions with your personal situation. Get a clear picture of your personal finances. Assess your financial strengths and weaknesses. Do recognize that television news is repetitive. When we are continually surrounded by negative thinking, our ability to reason and solve problems becomes diminished. This fuels anxiety. Do remember that “bad news sells newspapers, “ and that television commentators, radio talk show hosts, and the print media become popular and thus successful by being sensational and confrontational. Do avoid negative, alarmist people, for they drain you of positive energy. Also, avoid the “all or none” mentality when considering financial matters. Don’t make a bad situation worse. Recognize that a downturn in the economy, even a serious downturn, is not the same as a total collapse.  A recession is not the same as a depression.

Second, approach your personal financial situation logically. When you encounter financial information that makes you feel anxious, ask yourself these questions:
What does this information represent to ME: (1.) a minor inconvenience, (2.) a major inconvenience, or (3.) a genuine catastrophe? In reviewing these things, keep in mind that we often make an error in thinking that just because something is possible, it is also probable.  A wise man once said: “My life has been a series of terrible misfortunes, most of which never happened!”

Third, be proactive! Prepare an action plan for your finances. Remember when we were in school and had fire drills? Consider your action plan as a “financial fire-drill.”  Begin by defining the problem. Next, figure out the desired outcome. Finally, develop action steps to deal with the problem and move toward the desired outcome. At this point, you may wish to get the assistance of an experienced financial advisor. Following the impersonal, generic advice of a radio or television talk show host or reading  popular financial self-help books  are no substitute for sitting down with a concerned counselor or advisor who takes the time to get to know you and your family.

Fourth, if you feel yourself becoming overwhelmed with financial anxiety, practice what I call “worry management.”  Ask yourself these three questions: (1.) What can I control today?  If you can control it, then do it. For example, you decide you can immediately reduce your spending by limiting dining out, stopping recreational shopping, and paying cash instead of using credit cards. (2.) What can I control later on?  For example, you prepare a financial contingency plan to deal with significant financial emergencies. You establish a home equity credit line, determine the requirement for emergency borrowing from your 401(k) plan at work, and get the coin collection you inherited appraised. (3.) What can I never control?  Do not; repeat: DO NOT worry about those things! For example, the great majority of us have absolutely no control about what happens in Washington. Realistically, all we can do is express our opinions to our senators and representatives in Congress, and vote. Instead of worrying about things over which you have no control, spend your time and energy on things that you can influence.

Fifth and finally, focus on positive things. Make detailed lists of the good things you can identify about your financial situation. Realize that having less is not the same as having nothing. This reminds me of a proverb that my mother repeated over and over when I was small:  “I wept because I had no shoes, until I saw a man who had no feet.”

Recognize that just because some people are having trouble does not mean that you will have trouble. Consider keeping a  Gratitude Journal in which you daily write of the positive material and non-material things for which you can give thanks. Count your blessings; they are so much greater than most of us realize!