How to manage financial stress during times of economic uncertainty

Stress during periods of economic instability (which are becoming more frequent and prolonged) can have an impact on a person's health, level of happiness, and overall well-being. Financial psychology and recent research can help us understand how to manage stress during this period.
3 min
02.05.2023

Stress during periods of economic instability (which are becoming more frequent and prolonged) can have an impact on a person’s health, level of happiness, and overall well-being. Financial psychology and recent research can help us understand how to manage stress during this period.

I would like to share a few brief conclusions on this topic.

1. Always stay calm and confident. Any decline is temporary and transitions into a period of consolidation and growth. Your task is simply to weather the storm (sometimes just to survive).
Panic and fear can lead you to make impulsive decisions and worsen the situation, often without even realizing it. You can find over 20 studies on the topic of mental resilience and financial success. The biggest problem lies not in the crisis or market downturn itself, but in your own self-perception and the stress that makes you prone to making more irrational decisions. Practice breathing techniques, take vacations, engage in regular sexual activity, and enjoy nature – anything that promotes your peace of mind.

2. Try to deliberate on your decisions longer than usual. Learn financial information and analyze your financial capabilities to make informed decisions. Is it difficult to think? Engage in associations, ask yourself questions, and think together with a more resilient individual. Don’t take on more than you can handle.

3. Don’t cut back on your budget for entertainment and investments. Regardless of the challenges you face, finding enjoyment in life is equally important as earning millions. Research shows that individuals who constantly work without dedicating enough time for rest and leisure activities are at a higher risk of developing physical and psychological issues. Therefore, don’t forget to allocate time for your hobbies and interests to reduce stress and avoid feelings of depression.

4. Find an additional source of income. Your internal search system, on the topic of where and how to earn more, should always be operational. Any crisis, including COVID-19 and wars, presents unique opportunities. (Without disregarding the fact that such situations are dreadful) Expand your horizons and learn to see opportunities everywhere, both in others and within yourself. Don’t know how? There is a video on my website that will explain how to develop the skill of seeing opportunities.

5. Engage in communication with others and don’t isolate yourself from family and friends. Communicating with friends and family can help you cope with stress and discover new resources and opportunities. Engaging with professionals such as financial advisors can also help you make more rational decisions.

6. Learn. A study published in the “Journal of Financial Therapy” revealed that learning financial literacy and stress management can improve financial well-being and psychological health of individuals during economic crises. There is always something new to learn!

P/S. I’m not writing about the need for savings, budgeting, a financial cushion, and so on. Those are fundamental things that should be present in everyone’s life, as the absence of them can significantly impact the quality of life during periods of uncertainty.