money is one of the most stressful and necessary parts of our lives that we'll ever have to deal with the coronavirus pandemic has exacerbated that anxiety and there's no clear end in sight i talked to experts to better understand some of the psychological consequences of financial stress and
how we can manage it i'm nicole ellis and this is coping with covid19 prior to this whole thing happening money was already the number one source of stress in the lives of the average american like three out of four americans um studies have shown are really stressed about
money and then and then you add in the concern about our physical well-being with the virus and our emotional brains are all just going haywire right now what have been the biggest hurdles for people as they try to figure out how to move forward in terms of financial
planning for this the biggest challenge we're discovering for folks is simply coming to terms with the severity of the covid19 crisis people i think are still even today not fully internalizing and accepting the fact that this is going to last months probably the rest of this year is
it part of that behavior aversion to looking at our own personal financial landscape yes and so when we're scared about something and we're worried that we don't have the confidence to address it it's real easy to avoid thinking about it even before this about a third of americans
would admit that they try not to think about their financial situation would make sense if you're really stressed about it when you are in fear your natural inclination emotionally is to run what are the financial ways that you can either put yourself at ease or at least plan
to the best of your ability in the here and now you need to have a week or two week out plan i mean just not just just for basic necessities and food and you know fruits and vegetables that kind of thing so you want to have that sort
of plan and then also i think it's a good idea to stretch out a three to six month plan right now we are in a hunker down survival environment and that means we need to prepare ourselves not just emotionally but financially at the prospect of losing our incomes
very often our subconscious if it feels like we're not paying enough attention to a threat it'll just throw it in front of your face all the time and you'll be dreaming about it and you can't sleep at night and sort of ironically when you turn and face that
and actually maybe journal about it and go around your worst fears and just sort of give it time to breathe quite often that lowers your level of anxiety because your subconscious is like okay so you're taking care of this right you're paying attention to this and the hardest
part is when we're pushing it down all day long and trying not to think about it that's when it can rear its ugly head as we're trying to drift off to sleep what are some of the ways that people can process some of this stress if it's become
overwhelming because of this pandemic this is an exercise i call the worst case scenario exercise the terrible thing about financial stress is financial stress can actually kill you but your financial situation probably isn't going to kill you so the worst case exer scenario exercise puts you through this
process so essentially you're let's say for example you're afraid of losing your job or you've lost your job well then what would happen and you might say well then i wouldn't be able to pay my mortgage then what would happen well you know i might lose my house
okay well what would happen next and you just go down the rabbit hole um and you know maybe i have to move in with loved ones or sibling or parents and that wouldn't be fun but it's not life-threatening what would your advice be for people who are on
the opposite end of the spectrum in terms of how they are dealing with this financial stress the people who are constantly looking at their stocks constantly looking at their bank accounts while we're at home and and vulnerable to cyclical thinking so i would suggest that you actually do
do that so just go ahead and totally immerse yourself in all of your anxiety and all of your concerns but try to schedule it for maybe just an hour a day um don't don't stretch it out throughout the whole day and be careful that your frame of reference
isn't too narrow if you looked at a dow jones industrial average chart for the last month or two and you're looking at it like this it's going to look like the whole world went off a cliff look at look at a three-year chart a five-year chart a 10-year
chart or even 100-year chart and when you see that you're going to see that this is sort of just a blip on the screen it's more of a pothole than it is going off a cliff and so i think where we get extremely anxious when we have that
short narrow frame of reference and when we can expand that out it feels much better there's also the sort of trauma piece like getting fired or furloughed or laid off is a traumatic life event what would your advice be for navigating and healing from the types of traumatic
events that americans are experiencing in the millions now one of the key things that keeps us from not being totally impaired by that post-traumatic stress is our ability to take action to help ourselves we can easily get in a frozen state of panic and fear and just to
try to override that to take action that you can control and for example with the virus there's a lot of things that many of us can control right i mean in the sense that we can wash our hands more we can social distance we can be more purposeful
around that it's an opportunity to for me personally to be a better husband to be a better father quite frankly i'm actually a way better father now than i was a month ago and so this is something that i can actually control and it's one of the ways
that i'm trying to um sort of keep myself moving and find ways to improve myself and something i have total control over what are some of the other pieces of of our relationship with money that we should be mindful of we need to recognize that our relationship with
money has changed and the relationship that money has with us meaning the uh family environment has also changed and that means we need to have an open honest communication with our spouse or significant other with our partner with our children to help them understand that yeah things are
different now the crisis itself is actually helping us to control our spending because we can't leave the house so we're not going to restaurants we're not going to shopping malls we're not going to movie theaters or bowling alleys we are not spending money the way that we were
we're not even putting gas in the car which is kind of a shame since gas prices are so low but go figure so we are already doing a lot inherently by simply staying home but having said that we need to look in as many places as we can
for how we are spending the remaining money we're spending to see what is truly essential versus what is more optional and discretionary so that we can continue to buy food and medicine no matter how long this crisis happens to last and after you have built up your cash
reserves and you've started contributing to your retirement plan at work now you can start focusing on long-term debts such as expensive credit cards and after those are gone you can then focus on saving more in ordinary taxable accounts but for most of us it's the cash reserves that
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