Dealing with COVID-19: Four Ways to Minimize Financial AnxietySubmitted by Farrall Wealth on March 30th, 2020
If the effects of COVID-19 are waking you up in the middle of the night to a money-related
panic attack, do not worry - you are not alone. It is natural for us to worry about our financial
situation, especially during a pandemic, as it dictates so many facets of our everyday life.
Nevertheless, financial stress is a big deal and needs to be addressed.
Money-driven anxiety is also becoming a growing concern for the younger population.
Millennials are taking out larger student loans than ever before and facing an increasingly fluid
job market. Northwestern Mutual’s study indicated that “more than a quarter of millennials say
financial stress affects their job performance, over twice the rate of the general population.” 1.
Ignoring our finances entirely is not the solution, especially when Coronavirus concerns are
causing the markets to change drastically. Nor is fretting daily over every aspect of our finances.
So what can we do to ease the burden of financial anxiety?
Do not compare your wealth to others.
Living in comparison to others simply breeds negative emotions. When we browse our friend’s social media profiles, it is common to post the best
versions of themselves. Do not let this facade of vacations, dining out, and flashy cars fool you
into thinking this is how we should live everyday life! Keeping up with the Joneses’ will only go
so far - don’t stretch your financial wellbeing to present a skewed image of your own lifestyle.
Simultaneously, there is a private element of our finances that goes unnoticed. We do not see the
time and commitment some of our successful friends put into their professional careers. At the
same time, there may be plenty of debts in play aiding this supposedly successful lifestyle.
A far easier choice is to understand your own budget and what you need to be happy. Create
your own measuring stick and use that to assess your goals.
Establish an emergency fund.
Often our financial stress stems from envisioning the worst-case
scenario in our lives. If I lost my job today due to COVID-19, how do I pay my bills? What if a family member
becomes sick or injured? Can I afford to fix my car if I get into an accident?
Although fixating on the worst possible situation is unhealthy, being aware of it can be
constructive. Preparing an emergency fund can ease the stress of an unforeseen emergency.
Tying this fund into our monthly budget creates a safety net - we now have something to lean
upon the moment something pops up out of the blue.
Spend socially, not materialistically
Materialistic spending is a plague that affects young adults.
Psychology professor Catherine Sanderson notes that “accumulating things rarely leads to happiness.” 2. We acclimate to our
possessions. They become old, we want something new. The cycle repeats.
Spend your money on experiences with people that you care about! Even when you are social
distancing, you can connect with others virtually. Our close relationships with others is what
ultimately makes us happy.
Educate yourself; meet with an expert.
Financial advisors can review your entire financial picture or provide help in a specific area of concern. Use this resource to your advantage! Many
advisors will offer a ‘no obligations’ meeting to discuss the basics of your financial plan - a great
first step towards lessening the load of money anxiety.
Continue to educate yourself. Listen to your advisor’s advice but do your own research as well!
At the end of the day, it is your money. It is a far more comfortable feeling when you understand
where your investments are diversified and how your retirement savings are shaping up.