Where to Turn in Times of Financial Stress: 10 Ideas for Feeling More Confident About Your Money

Where do you turn when something rattles your financial confidence? Let’s explore 10 great options for feeling better when something goes wrong and you need a boost.

1. An Understanding of Behavioral Finance

Fear and greed are strong emotions that tend to take over in times of financial stress. 

Understanding behavioral finance can help you understand the role emotions play in good financial decision making. Here are a few resources for learning:

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

Book: The Psychology of Money: Timeless lessons on wealth, greed, and happiness, by Morgan Housel

Podcast: Morgan Housel — The Psychology of Money

Podcast: Annie Duke — Thinking in Bets — Poker, Decision Making and Behavioral Finance

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

2. A Long Term Perspective

Life happens. Your financial situation will experience gains and losses. However, your life and money will generally move in the “right” direction with good decision making.

So, when it comes to your money, it is important that you remember that something like a 3% loss to your portfolio is not the time to sell and lock in the loss. Markets have always recovered and it is highly likely that they will continue to recover in some period of time.If short term losses worry you, it can be a good idea to review your projected net worth over time. Use the Boldin Retirement Planner to look at your future net worth during a downturn, not today’s numbers.

3. Go Ahead and Play Out Your Worse Fears

Playing out your worst fears when stressed is a psychological technique often referred to as exposure therapy or defensive pessimism. This strategy involves imagining the worst possible outcomes of a situation and confronting them in your mind.

The Boldin Retirement Planner enables you to play out your worst fears against your current financial situation. You can see into the worst case future by modeling different “what if” scenarios.

This can be useful as it enables you to:

• Confront what is stressing you out
• See that the worst case is likely to be okay in the long run
• Shift your focus from stress to proactive problem solving as you start to look for solutions to the what is causing you anxiety

4. Know the Difference Between Financial Stress and Financial Problems

These are two distinct categories and sometimes stress is a reaction to problems that don’t even exist. The following meme made me laugh this week. It is a good reminder to understand the root cause of your stress.

5. Your Financial Advisor

Ideally you have someone you trust to answer questions when things get uncomfortable. Kuhn is not the only expert to recommend that you have someone to turn to when emotions are at play. Author Morgan Housel is also a fan of having an advisor there to help you navigate difficult decisions when emotions are involved.

Sure, financial advice can be expensive and with tools like the Boldin Retirement Planner, index funds, and a decent understanding of personal finance, it may seem increasingly unnecessary to some. However, having a financial expert on call can be absolutely invaluable in times of financial stress.

A financial advisor should be someone that understands your financial situation and who can act as a sounding board to help you make rational choices when stress has you rattled.

Have you considered professional financial advice from Boldin Advisors?

Boldin Advisors offers affordable plans. Select from fee-only one-time engagements, on-demand guidance, and ongoing relationships for which the advisor will help you devise long term financial strategies and be there whenever you need support.

6. A Friend or Family Member

Getting input from people you trust can expand your perspective and limit bad decisions.

More importantly, friends and family members can help absorb stress that you are experiencing. Just explaining what is bothering you, even without hearing differing opinions, can quiet noise that might lead you astray. Recounting your problem out loud can help lead you to the right answers.

7. Read! Learn ! Books, Turn to Books!

Where should you turn when you are stressed out? Turn to people who are smarter than you! And, the best source of wisdom may just be books.

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

“An investment in knowledge pays the best interest.” –Benjamin Franklin

8. A Personal Finance Club

A personal finance club is a group of people who meet regularly to discuss the details of their financial situation and get input on what to do from their peers. There are in-person groups and many more online clubs that meet over Zoom.

This is a great way to feel supported during times of financial stress.

9. Acknowledge the Emotion, Name It!

When you label an emotion, it activates the brain’s prefrontal cortex, which is involved in reasoning and decision-making, and calms the amygdala, the brain’s emotional center. This process, known as affect labeling, allows you to create a sense of distance from the emotion, making it easier to understand, process, and respond to it in a more balanced way. By naming the emotion, you gain control over it, rather than letting it control you.

12. Have a Written Plan and Stick to It

Whether it is the plan you maintain within the Boldin Retirement Planner, the printed report you get from a financial advisor, or your own asset allocation strategy, having a plan, understanding why it is your plan, and sticking with it, is one of the best ways to stay on track and make sure that your emotions don’t derail your long term financial security.