Where to Turn in Times of Financial Stress: 12 Ideas to Feel More Confident About Your Money

Global financial markets sent some into a panic Monday, with the S&P 500 down 3% and markets around the world plunging. For some, that was a worry. Whether or not the day sent your blood pressure soaring, almost no one is immune to financial stress. It can come in the form of economic news but also personal events like job losses, natural disasters and more.

So where do you turn when your financial doubts are hitting you? Let’s explore 12 great options to boost your confidence when something goes wrong and you need a boost.

1. Understanding Behavioral Finance

See, our brains aren’t designed to make good decisions when it comes to money. Fear and greed are powerful emotions that tend to take over during times of financial stress. However, more often than not, these aren’t the right emotions for making good financial choices.

Understanding behavioral finance can help you understand the role emotions play in making good financial decisions. Here are some resources to learn:

Article: Behavioral Finance: 16 Easy Ways to Outsmart Your Mind

book: The Psychology of Money: Timeless Lessons on Wealth, Greed, and HappinessBy Morgan Housel

Podcast: Morgan Housel – The Psychology of Money

Podcast: Annie Duke – Thinking About Bets – Poker, Decision Making, and Behavioral Finance

Article: The Behavioral Finance Revolution: How Daniel Kahneman Redefined Personal Financial Decision-Making

2. Long-term perspective

Life happens, and you will have good days and bad days. Your financial situation will have its ups and downs. However, your life and your finances will generally move in the “right” direction by making the right decisions.

So, when it comes to your money, it’s important to remember that losing 3% of your portfolio is not the time to sell and lock in a loss. Markets have always recovered and are likely to continue to recover in a given period of time.

If short-term losses are a concern for you, it may be a good idea to review your projected net worth over time. Use your new retirement planner to look at your future net worth during a recession, not today’s numbers.

3. Move forward in the face of your worst fears.

Embodying your worst fears when you are under stress is a psychological technique often referred to as Exposure therapy or Defensive pessimismThis strategy involves imagining the worst possible outcomes of a situation and confronting them in your mind.

The new retirement planner allows you to implement your worst fears in the face of your current financial situation. You can see the worst possibilities in the future by modeling different “what if” scenarios.

This can be useful because it allows you to:

• Face what’s stressing you out.
• Ensure that the worst case is likely to be acceptable in the long run.
• Shift your focus from stress to proactive problem solving as you start looking for solutions to what’s causing you anxiety.

4. Know the difference between financial stress and financial problems.

Look, there’s stress and there’s problems. These are two different categories, and sometimes stress is a reaction to problems that don’t exist. This picture made me laugh out loud this week. It’s a good reminder to understand the root cause of your stress.

5. Your Financial Advisor

We happened to meet with Joe Kun (One of our favorite retirement experts on YouTube) On Tuesday, the day after the most dramatic market turmoil this week, we were discussing concerns and he mentioned that he thinks having a financial advisor on board is a smart way to deal with financial stress.

So far, the decline we’ve seen this summer looks like it might be short-lived and not very deep, making it easier to bear. But are you prepared for a two-year decline? We haven’t seen a prolonged market decline in a long time, but it can happen and you need to be prepared to make the right financial decisions during times of prolonged stress.

Ideally, you should have someone you trust to answer questions when things get uncomfortable. Cohen isn’t the only expert who recommends having someone to turn to when emotions are at stake. Author Morgan Housel is also a fan of having a counselor help you navigate tough decisions when emotions are involved.

Sure, financial advice can be expensive and with tools like the NewRetirement Planner, index funds, and a decent understanding of personal finance, it may seem increasingly unnecessary to some people. However, having a financial expert available on-demand can be crucial. Precious In times of financial stress.

A financial advisor should be someone who understands your financial situation and can act as a counselor to help you make rational choices when stress gets the better of you.

Have you considered getting professional financial advice from New Retirement Advisors?

NewRetirement Advisors offers affordable plans. Choose from one-time fee engagements, on-demand mentoring, and ongoing relationships where an advisor will help you develop long-term financial strategies and be there whenever you need support.

Set up a free discovery session with one of NewRetirement®’s certified financial planners to learn more.

6. Friend or family member

Getting input from people you trust can broaden your horizons and limit bad decisions.

Most importantly, friends and family can help you absorb the stress you’re facing. Just explaining what’s bothering you, even without hearing different opinions, can quiet the noise that might otherwise lead you astray. And saying your problem out loud can help you get to the right answers.

7. Facebook. Yes, Facebook.

Look. In general, we agree that you should never believe almost anything you read on social media. However, NewRetirement Facebook Group This group has proven to be a good source of information. It’s a private group and we try to limit spam. When you ask a question there, you’re likely to get a bunch of interesting answers from knowledgeable and helpful people.

On Monday, Steve Chen, founder of NewRetirement, posted:

There were 67 logical answers that would be helpful to anyone feeling stressed about falling prices.

8. Read! Learn! Books, turn to books!

Where should you turn when you’re feeling stressed? Turn to people who are smarter than you! And perhaps the best source of wisdom is books. Click here for a great list of my favorite books on retirement, personal finance, and aging that may be helpful during times of financial stress.

Here’s some wisdom on why reading and learning are so helpful in helping you cope with stress:

“To acquire the habit of reading is to build for yourself a shelter from almost all the miseries of life.” – W. Somerset Maugham

“Investing in knowledge pays the best dividends.” -Benjamin Franklin

““Education is the key to unlock the golden door of freedom.” – George Washington Carver

“A book is a garden, an orchard, a storehouse, a party, a company by the way, a counselor, a gathering of counselors.” -Charles Baudelaire

“Books are a uniquely portable magic.” -Stephen King, On Writing: A Memoir of the Craft

“Reading all good books is like having a conversation with the best minds of the past centuries.” – Rene Descartes

9. Personal Finance Club

We hear more and more people are joining personal finance clubs. These seem to be groups of people who meet regularly to discuss the details of their financial situation and get feedback from their peers on what they should do. We know of in-person groups and many online clubs that meet via Zoom.

We think this is a great idea and a great way to feel supported during difficult financial times.

The clubs were formed organically on NewRetirement Facebook GroupBetween friends, and by supervisors.

10. Yourself

Okay, stay with me for a second.

Talking to yourself may not be the best source of comfort. We tend to be very hard on ourselves.

However, if you talk to yourself as if you were giving advice to a friend, you will likely gain a much better perspective on your problems.

11. Acknowledge the emotion, and label it!

When you name an emotion, it activates the prefrontal cortex in your brain, which is involved in thinking and decision-making, and it also calms the amygdala, the brain’s emotional center. This process, known as Label effectThis allows you to create a sense of distance from the feelings, making it easier for you to understand, process, and respond to them in a more balanced way. By naming the feelings, you can take control of them, rather than letting them take control of you.

Confidence is not the absence of doubt, but the ability to move forward in spite of it. True confidence involves acknowledging doubt and uncertainty while trusting your skills, judgment, and ability to persevere in the face of challenges. It’s about believing in your ability to overcome obstacles, even when the path ahead isn’t entirely clear.

12. Make sure to prepare a written plan and stick to it.

Whether it’s the plan you maintain within your new retirement plan, the printed report you get from a financial advisor, your investment policy statement, or your asset allocation strategy, having a plan, understanding why it’s your plan, and sticking to it is one of the best ways to stay on track and ensure that your emotions don’t derail your long-term financial security.