5 Ways to Pull Yourself out of a Money Freak-Out

Photo: Erol Ahmed on Unsplash

RRight now, with nowhere else to go, most of us are spending a lot of time in our own heads. When so much is unknown, it’s hard not to dwell on uncertainty: about how social distancing will continue. About our health. About our finances.

The weight of that last one feels a little heavier each day as the financial impact of the pandemic becomes more and more widespread. Many of us are already struggling through lost jobs, lost gigs, pay cuts. Even those who aren’t there yet are still worried. I’m worried.

Here’s the thing, though: Even if it doesn’t feel like it right now, there’s still so much within your control. And when it comes to personal finance, believing you’re in control is half the battle — research has shown that when you feel powerful, you make better choices about your money.

Getting to that feeling isn’t hard, either. It’s a question of reminding yourself what’s already in front of you — all the levers you can pull, right now or whenever you might need to. Here are a few things to keep in mind when money anxiety starts to feel overwhelming.

There’s probably a lot to cut

Last year, I wrote a Forge story about having a “doomsday budget,” the bare minimum you’ll need to get by. It’s the cost of your most essential needs, like food, shelter, utilities, transportation, medication, and insurance. Ideally, this is something to do before you actually find yourself in a crisis — a tool to have at the ready if and when you need it.

“Cut any expenses you can, and that means everything is on the table,” says Bobbi Rebell, a certified financial planner and adviser at the debt-management site Tally. It sounds like a daunting undertaking — but something we’re currently learning in quarantine is just how many things are expendable. Expenses that once felt vital are now falling by the wayside: We’re getting creative with our meals instead of buying new groceries. We don’t have any commuter costs. We’ve replaced the gym with free streamed workout classes. We’re finding free online games and tutorials to get us through our boredom. Without trying to, many of us are already living closer to our doomsday budget than ever before.

Debt isn’t necessarily a bad thing

If you still have a viable income, now is the time to begin funneling as much as you can into savings. “When I got laid off in 2009, my saving grace was savings,” says Farnoosh Torabi, the host of So Money with Farnoosh Torabi. Having access to liquid cash, Torabi explains, means you’ll be less likely to make a knee-jerk, emotionally charged move. It’s a psychological cushion as much as a practical one.

Focusing on building up your savings means rejiggering some other financial priorities — including what you do about your debt. The conventional wisdom is the personal-finance world is to pay off any debt as aggressively as you can, but Tasha Cochran, a finance attorney and author of the personal-finance blog One Big Happy Life, recommends putting a pin in that for now.

In an unexpected crisis, “liquidity and cash reserves are far more important than being debt-free,” says Cochran. An emergency fund, she explains, means flexibility: “Having cash on hand gives you options, like being able to afford to move to a new city for a better job opportunity, or being able to make a deposit on a more affordable apartment.”

Customer service reps know why you’re calling, and they get it

When it comes to putting off payment on your bills, it’s always better to ask permission than forgiveness — and right now, it’s easier than ever to get that permission. Around the country, some institutions are responding to this crisis with newfound sympathy and flexibility. Many cities have temporarily banned evictions, some banks are helping with loan deferral, and many internet providers can take the “Keep Americans Connected” pledge not to terminate service.

Still, even if you avail yourself of all the available relief efforts, there may come a point when it’s necessary to triage your payments. But if you strategize now for what you’ll prioritize, you can minimize the disruption to your life. “Evaluate what lenders can’t take from you,” Liz Gendreau, who writes about personal finance on her blog Chief Mom Officer, told me for the doomsday budget story. “For example, repaying your car loan is likely a higher priority than a student loan. They can repossess your car, leaving you without transportation, but they can’t repossess your education.”

Your community wants to help

Right now, we’re finding new ways to be there for each other, from Zoom chats to online skill-sharing sessions to volunteer projects that can be done from the couch. (I’ve also aggregated some coronavirus and recession relief efforts — including mental health services, job leads, and from-home distractions like free workouts — into this spreadsheet.) And for anyone worried about their finances, this new wave of communal spirit can be a lifeline.

“There’s a good chance your neighbor is in the same boat you’re in,” says Julien Saunders, co-founder of the personal finance blog Rich & Regular, “so if you’re both in need of kitchen staples, why not split the cost of household supplies and groceries that can be purchased in bulk? If you’re both going in the same direction, why not carpool to save gas?” Neighborhood groups, city-wide organizations, friends of friends — you have networks of people you know and people you don’t, who are ready and willing to help ease your burden if you just reach out.

You’ll be better off if you focus your mental energy

A recent Forge piece explained a concept introduced In The 7 Habits of Highly Effective People, in which Stephen Covey wrote that each of our anxieties can be sorted into one of two categories — the “circle of concern,” for things you can’t control, and the “circle of influence,” for things you can. The more you focus on the circle of concern, the less brain space you have to devote to the circle of influence.

What happens with the economy is in your circle of concern. How you approach your money is in your circle of influence. The future may be unpredictable, but we all have the ability to take stock, make plans, and connect with people who can help us through this.

Writer, speaker, and author of Broke Millennial: Stop Scraping By and Get Your Financial Life Together and Broke Millennial Takes On Investing.

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