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How Financial Therapy Can Help You

Blog 3 of 3 in the Introduction to Financial Therapy blog series.

Introduction to Financial Psychology blog series

This brief blog series will illustrate how the growing field of Financial Psychology can revolutionize people’s turbulent relationships with money. Through understanding the roots and influence of their personal financial psychology, individuals find themselves able to discard the inherited programming that drives their financial decisions, and that no longer serves them.

The complete list of blogs in this series are at the bottom of this article.

How Financial Therapy Can Help You

Modern American culture projects a faulty reality of wellbeing and status largely based on large amounts of consumer debt and fueled by immediate reward. This external view is far from the truth. People in high-earning jobs often feel pressured to maintain the status quo or keep up with friends of a similar income level. They may indulge in overspending based on expected continued high-income, estimated bonuses, and anticipated promotions. Those unable to keep up with associates’ financial successes may be distressed by jealousy, shame, and low self-worth. The truth is that all of these related negative emotions have led to a taboo around personal conversations about money. While experiencing financial anxiety, depression, or stress—or even excitement over a big raise and promotion—any disclosure of such feelings may feel unsafe, exacerbating the discomfort.  So, instead, as a society we tend to bottle up any confessions about personal finances, and carry on with our silent struggle to mitigate our stress.

There is a Financial Solution

As highlighted in the previous blog, Why the world is turning to Financial Therapy, it has become more and more obvious that the solution to personal finances doesn’t merely require education and information regarding the basics of financial management. Although certainly helpful, knowing what to do does not always lead to effective decisions and execution. It is imperative that individuals with financially dysfunctional behaviors work toward a comprehensive alteration of their thoughts, feelings, and habits with money. These habits and feelings typically arise in childhood and early adulthood when initial financial blueprints are established by experiences and role models.

As adults, we find we may have unconsciously adopted problematic financial habits, creating roadblocks to our own personal success. For example, your parents may have managed money perfectly, but may not have shared the details with you—leaving you both ill-equipped to deal with adult life and resentful of their inattention to this crucial skill. On the other hand, they may have had intense arguments about money, leaving you uncertain about how to manage finances and fearful of a topic that appeared to create friction. Every money story is unique, made of individual experiences that require awareness and discernment in order to right-size and balance one’s relationship with money.

This is where the financial therapist comes in. A trained and experienced professional can provide a safe haven, with proven tools to help clients navigate the maze of their own money stories. Through careful work with an empathetic specialist, a financially stressed individual is empowered to identify and overcome economic roadblocks. Relief from constant pressure around money opens up new possibilities for individuals to expand their life experiences, create and maintain better personal relationships with their partners, and rid themselves of the shame and guilt too often associated with finances.

For a free consultation about your best course to financial stability and health, call 818.600.2264

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Introduction to Financial Psychology blog series

This brief blog series will illustrate how the growing field of Financial Psychology can revolutionize people’s turbulent relationships with money. Through understanding the roots and influence of their personal financial psychology, individuals find themselves able to discard the inherited programming that drives their financial decisions, and that no longer serves them.

Blog 1 – What is Financial Psychology
Blog 2 – Why the World is Turning to Financial Therapy for Help
Blog 3 – How Financial Therapy can Help You

By

Why the World is Turning to Financial Therapy for Help

Blog 2 of 3 in the Introduction to Financial Therapy blog series.

Introduction to Financial Psychology blog series

This brief blog series will illustrate how the growing field of Financial Psychology can revolutionize people’s turbulent relationships with money. Through understanding the roots and influence of their personal financial psychology, individuals find themselves able to discard the inherited programming that drives their financial decisions, and that no longer serves them.

The complete list of blogs in this series are at the bottom of this article.

Why the World is Turning to Financial Therapy for Help

How low-income, middle-class, and wealthy individuals alike are all beginning to realize that financial wellness begins in the mind.

There is no mystery to managing personal finance. In spite of money management being woefully absent from school curricula, most people manage to understand the basics: earn more than you spend, save as much as you can, invest in a future day. However, an entire industry is built on educating people on the finer points of financial management. Books, articles, television programs, and radio shows all devote countless words over countless hours to provide insight into the details of handling personal finance. Yet millions of Americans find themselves grossly in debt, having saved little or nothing for retirement, and unable to enact the simplest changes to their financial lives. The impact of the COVID pandemic has greatly exacerbated the already alarming state of personal finance and sent our society into a K shaped recovery.

The financial industry suggests that if you are more educated about money management, retirement plans, and investment programs you should be able to grow your wealth. Likewise, the education industry aligns with the narrative that a more advanced degree would enable you to obtain a higher-paying job—your financial stress evaporating because of the increased income. When both strategies show minimal results, many people blame themselves and internalize the narrative as being defective or irresponsible. But for a large number of individuals who are trapped in living beyond their means, underearning, neglecting savings, or compulsively spending high incomes, there is good news.

The financial industry does provide significant benefit in certain areas of personal finance. However, most financial advisors’ ideas about personal decision making are based in rational choice theory, which states that human beings are rational and will make optimal decisions, resulting in outcomes aligned with their own best interests. But humans are not always rational in all areas of their lives—including their behavior with money. Thus, financial therapists in corporate elements from the field of clinical psychology to examine how emotions, beliefs, and personal narratives impact both short-term and long-term financial behavior.

A new awareness of how behaviors with money are influenced by childhood history has created a driving force to uncover, understand, and discard the money stories that don’t serve us in our current, day-to-day lives. Such stories underlie financial disorders that manifest in a variety of patterns such as underearning, over-working, or see-sawing as a high-stress, feast-or-famine intermittentincome earner. All of these behaviors result in shame, leaving the sufferer feeling incompetent or paralyzed and unworthy.

A Solution to Financial Stress and Emotions

Awareness is the first element of the solution. This is where Financial Therapy comes in, as more and more people are coming to recognize as the solution to their self-sabotaging financial habits and accompanying financial stress. Working with a financial therapist, individuals find a safe place to examine the money beliefs that drive their flawed financial habits. This allows them to identify and interpret the money stories rooted in their personal history, and to acknowledge economic mistakes with grace and self-compassion. This awareness leads to financial transformation and feelings of empowerment.

For a free consultation about your best course to financial stability and health, call 818.600.2264

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Introduction to Financial Psychology blog series
This brief blog series will illustrate how the growing field of Financial Psychology can revolutionize people’s turbulent relationships with money. Through understanding the roots and influence of their personal financial psychology, individuals find themselves able to discard the inherited programming that drives their financial decisions, and that no longer serves them.
Blog 1 – What is Financial Psychology
Blog 2 – Why the World is Turning to Financial Therapy for Help
Blog 3 – How Financial Therapy can Help You

By

Introduction to Financial Psychology blog series

Blog 1 of 3 in the Introduction to Financial Therapy blog series.

Introduction to Financial Psychology blog series

This brief blog series will illustrate how the growing field of Financial Psychology can revolutionize people’s turbulent relationships with money. Through understanding the roots and influence of their personal financial psychology, individuals find themselves able to discard the inherited programming that drives their financial decisions, and that no longer serves them.

The complete list of blogs in this series are at the bottom of this article.

What is Financial Psychology?

The field of Financial Psychology is a burgeoning discipline that associates people’s thoughts and feelings about money with how they manage it. While  personal finance tools are widely available and have grown and improved over time, clean and clear financial management still seems challenging for the average American. Even today, when financial education is easily obtainable for free through the Internet, many people continue to struggle with debt, stagnate in underearning, and substantially overspend their resources, leaving nothing for a rainy day. The numbers are staggering:

The result? Massive Financial Stress. In fact, Financial Stress is cited as the number one cause of stress in the United States. According to the 2019 Stress in America survey, work (64%) and money (60%) are the top two stressors and are obviously interrelated (American Psychological Association, 2019). Financial advisors found that, in addition to helping clients navigate negotiations around money, they had to incorporate therapeutic approaches to assist them in making clear and rational decisions around their financial issues.

In the face of historical data and challenges such as these, it became obvious that the problem wasn’t simply a lack of understanding about how money works. Neither was it a problem with social class—indeed, many raised in poverty rose to riches, and many raised by upper middle-class parents found it difficult to earn a living on their own as adults. Psychologists began to investigate the connection between finances and emotions to better understand the influence of beliefs and feelings on specific behaviors around money.

The Challenges of Money

Dealing with money is unavoidable. Whether paying rent and living paycheck to paycheck, paying a mortgage and saving in a 401-K, or living off a managed trust fund, one consistently has to make decisions around money that may play a large part in overall well-being. Such decisions are frequently stressful, which can take a huge toll on emotional health. The burden of financial stress inevitably affects all aspects of life including relationships, family, work, and personal security. Time and time again, merely learning how to manage money has proven powerless in solving financial stress. Rather than addressing solely the practical money behaviors that have caused poor outcomes, financial therapy works to uncover the triggers that cause a person’s emotional responses to finances which often lead to poor decisions around money—both now and down the road. Once people are able to recognize their individual financial triggers, they are in a much better position to put their personal finances in order and, in the future, refrain from the same emotional behaviors that caused and maintained their problems.

Financial Therapy

This is where Financial Psychology, delivered as financial therapy, helps people to change their relationship with money. Financial therapy provides an informed process to support people in changing how they think, feel, and behave around money. This results in an overall improved relationship with money, typically an improved income, lower stress, and easier interaction around financial decision-making.

For a free consultation about your best course to financial stability and health, call 818.600.2264

References:

American Psychological Association. (2019). Stress in America 2019.

Fay, B. (2018, February 21). America’s Debt Help Organization. Retrieved September 21, 2020, from https://www.debt.org/

Northwestern Mutual. (2019). Planning and progress study, 2019. Retrieved from https://news.northwesternmutual.com/planning‐and‐progress‐2019

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Blog 1 – What is Financial Psychology

Blog 2 – Why the World is Turning to Financial Therapy for Help.

Blog 3 –  How Financial Therapy can Help you.

By

Conquering COVID: Financial Trauma and Recovery

Since the outbreak of COVID 19, the lives of people all around the world have shifted drastically. From social distancing to endless quarantine, numerous sudden changes in our lifestyle have greatly impacted both our macroeconomy and our management of our personal finances. The unprecedented societal disruptions have left many people financially traumatized, and irrevocably affected our ideas around money. It is important to fully realize that such changes may be permanent, and recovery may require a learning curve for many of us.

Although daily life appeared to come to a screeching halt during the past five months, the shift in people’s attitudes toward money and finance accelerated. Fear, confusion, and uncertainty thrust whole populations into survival mode, with citizens frantically purchasing and hoarding common household items, leaving supermarket shelves empty. BBC news journalist Bryan Lufkin explained the reasoning behind such blind panic reactions as “fear of the unknown, and [the belief] that a dramatic event warrants a dramatic response—even though, in this case, the best response is something as mundane as washing your hands.”

Looking back, we may categorize such extreme emotional activity as irrational and unreasonable. However, David Savage, an associate professor of behavior and microeconomics, wrote, “But emotions are not irrational: they help us decide how to focus our attention” (The Conversation, 2020). As humans, our emotions play a large and important part in decision making, both in response to possibly life-threatening external factors—such as the pandemic—and considerations as mundane as personal finance. In “normal” times, certain reactions might seem unhinged and fanatical; however acknowledging, examining, and valuing our emotions can help us decipher what our feelings may be trying to convey.

Five months into the global crisis, mask-wearing is the norm and the term “social distancing” is part of our daily vocabulary. At the same time, we have weathered losses not seen since the Great Depression, both in employment and in overall personal wealth, radically altering our usual patterns of spending. Baker and colleagues (2020) recently studied household expenditures in the United States, finding a sudden, steep increase in spending between February 26th and March 10th, followed by a 50% downward spike, then another sharp drop. Behavior being a clear reflection of emotions, the upward surge was easily attributable to the “fight-or-flight” survival response, as large segments of the public hurried to stockpile certain grocery items. The subsequent precipitous decrease clearly illuminated the struggle of many families to pay their bills. Different populations have adapted to this new state of adversity by fundamentally modifying former habits and priorities. It is evident that, for many, “getting and spending” currently take a back seat to saving up for an uncertain future and maintaining as much control as possible over family finances.

Conversely, others found themselves turning to compulsive online shopping— “retail therapy”—in an attempt to “medicate” their distress. Instead of relief, this behavior only served to exacerbate their anxiety as their reckless spending increased their financial problems. Along with mounting dread over deepening debt came feelings of deep shame and self-recrimination over the increased danger of unrestrained shopping spreading infection to delivery personnel and others.

As consequences of the pandemic continue to mount, new behaviors—rooted in adverse experiences and emotions during this time—will certainly materialize. CNBC reporter Chloe Taylor (2020) wrote that “a generation of risk-averse supersavers could emerge from the fallout of the coronavirus crisis and potentially reshape the economy.” The widespread economic misfortune this pandemic has inflicted may affect the ways we manage our money far into the future. Many individuals may become much more cautious about extending themselves for financial gain. An increase in precautionary savings in the U.S. is similarly likely.

On the other hand, other sources argue that this is a temporary and a relatively small financial setback in a much bigger world. Daniel Crosby, a well-known psychologist and a behavioural finance expert writes, “It’s human nature to assume that all we see is all that will ever be, but markets operate on a more forward-looking basis and realize that ‘this too shall pass.’ ”. He emphasizes the importance of believing in a better and brighter future in order to be the best investors we can be. As mentioned above, it is a small bump in a larger scheme of things – the market does not radically change overnight and it might be in our best interest to recognize the importance of consistency by not changing our behaviour as much.

While a lot of us would choose to be proactive in terms of managing our finances, many who have been deeply wounded and traumatized worry that a successful economic adjustment may take months or years to achieve. It is helpful to acknowledge that, throughout this pandemic, workable adaptations were made quickly and reasonably. This is proof of the power of our emotions and thoughts over unconscious behavior.

Many of us previously approached our lives without a moment of doubt over the apparent permanence of our social structures. That notion crumbled before our eyes, serving as a much-needed wakeup call. The resulting rapid shift of a whole generation’s former capricious financial behavior to a “tighten-your-belt” mentality clearly proved that harnessing our emotions can change our money habits in positive, if unpredictable, ways.

Our human capacity for adaptation over a very short period of time does not mean, however, that we can expect to coast back to “normal” at the same velocity. The unexpected crisis exposed an already precarious economic situation for many people, revealing the missing elements of thought and planning in their approach to money management. It has been a series of chaotic months for a lot of us financially. Moving forward, while we might assume that from all we have endured, our actions will reflect our experience and will be nothing like what we expected before; however, the intricate financial world does not change easily. In order to achieve a similar state as pre-covid, it may be in our best interest to keep the bigger and brighter picture in mind and seek for continuity and stability. Although it is tempting to believe that our lives will eventually return to their 2019 standard, the indelible lesson is that we must learn how to respect and understand our own emotional reactions if we are to effectively guide our financial affairs with intention and forethought. The alternative is to continue to find ourselves at the mercy of circumstance.

For a free consultation about your best course to financial stability and health, call 818.600.2264

References:

Savage, D. A., & Torgler, B. (2020, April 24). Stocking up to prepare for a crisis isn’t “panic buying.” It’s actually a pretty rational choice. Retrieved August 13, 2020, from https://theconversation.com/stocking-up-to-prepare-for-a-crisis-isnt-panic-buying-its-actu ally-a-pretty-rational-choice-132437.

Lufkin, B. (2020, March 4). Coronavirus: The psychology of panic buying. Retrieved August 13, 2020, from  https://www.bbc.com/worklife/artic le/20200304-coronavirus-covid-19-update-why-people-are-stockpiling.

Taylor, C. (2020, April 03). Coronavirus could create “a generation of supersavers” and reshape the economy. Retrieved August 13, 2020, from https://www.cnbc.com/2020/04/03/coronavirus-m ay-create-a-generation-of-supersavers-who-reshape-economy.html.

Baker, S., Farrokhnia, R., Meyer, S., Pagel, M., & Yannelis, C. (2020). How Does Household Spending Respond to an Epidemic? Consumption During the 2020 COVID-19 Pandemic. doi:10.3386/w26949.

Daniel Crosby, D. (2020, August 11). The Strange Psychology of COVID-19 and Investor Behavior. Retrieved August 24, 2020, from https://www.kiplinger.com/investing/601211/the-strange-psychology-of-covid-19-and-investor-behavior.

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Lending Money to Family Is Complicated. Here’s How to Do it Right

(Fatherly.com) – When a family member falls on hard times and needs a hand, stepping up is the sensible thing to do. The immediate reaction should be: What do you need and how can I help? But when the ensuing request is for financial help, the decision becomes a bit more difficult. Dealing with family is rarely drama-free. But lending money to family is riddled with conflict. It immediately creates a situation that dredges up resentment, anger, and worry. How, then, do you go through with a family loan without it being such a nightmare?

Even in the most straightforward agreement, money creates an imbalance. It involves power and control. You have it. They don’t, and, if the deal goes bad, the nature of your relationship, and the family dynamic, can be changed for good. It can be, in a word, “messy”, says Jennifer Calder, financial therapist in Montpelier, Vermont.

Still, you’re not turning away from a relative, and a family loan does not automatically mean disaster. But, to make lending money work, you need to balance your head and heart. It takes self-examination about what you’re getting into and it involves having open conversations. This isn’t a fun exercise. But the process can head off the anxiety, reduce surprises, and end up making a deal that works for both sides.

Responding to a Family Loan Request: What to Think About

Your brother asks you for money. You want to respond, “Of course,” but the answer can’t be impulsive. You need time. There are complications, both obvious and unforeseen, to explore. So how do you begin?

Calder says to start with two essential, fair questions: “How much?” and “What’s it for?” Once you have the basics, it’s perfectly reasonable to then say, “Let me think about this for a couple of says,” because there is even more to take into account.

On the practical level, the main concern is Can I afford to give him this money? Over-extending yourself merely causes stress that can bubble up into resentment. If the amount of money he’s requesting is doable, then you have to talk it over with your spouse, particularly if its a joint account. Not mentioning it, Calder notes, is breeding ground for financial infidelity. Lying to your spouse about money is never a good move.

But the considerations you need to make before lending money to family are not all practical. The most essential is a basic rule of lending: You may never see the money again. But you will see this person again. You have to ask yourself: How will I feel if it’s not repaid?, notes Alex Melkumian, financial therapist and founder of Financial Psychology Center in Los Angeles.

This is an important question. And if you’re comfortable with the prospect, it becomes a smoother process. Calder and Melkumian both say that making it a gift — tax implications, aside – makes it even smoother. (More on that in a bit.) But before you go ahead, it’s necessary to think: Is this request part of a troubling pattern or a sign of atypical hard times?

With all these considerations laid out, you come to three options:

  1. Yes.
  2. No, I can’t.
  3. No, I don’t want to.

Regardless of your answer, the conversation continues, and ways to help are still possible.

Lending Money to Family: If Your Answer Is No.

If a family member asks you to lend them money and your answer is “No,” the way in which you deliver your answer is crucial. Is the reason because of your financial situation? Say “I love you, but I can’t afford it right now.” Is the reason because you don’t feel comfortable giving the money, say something like, “I love you too much and I’m worried that this will damage our relationship.” It’s not a desired answer, obviously. But you can follow either with, “I still want to help,” and then you two can brainstorm.

Depending on the underlying issue – bad job, outdated skills, poor money management – you could offer to pay for a counselor or adviser. You could look for ways to free up your brother’s time in order to job hunt or take a class. The point is, as Melkumian notes, “money is not the only resource.”

Lending Money to Family: If Your Answer Is Yes

If your answer is yes, then you need to talk with the requestor frankly. Again, it’s simpler to gift it, and you can put it on yourself with, “Do this for me. I don’t want to jeopardize us. Pay me back if you can, but you don’t have to.” It doesn’t take away all the guilt, but some weight is lifted, notes Melkumian. Plus, the option still exists to repay, which doesn’t conflict with the asker’s pride.

But if you are going to make it a family loan, you have to figure out the details of interest and repayment, and go through as many scenarios as possible. Calder calls these the “What-ifs?”, the most important being if repayment can’t happen.

One thing that helps is to set a re-payment schedule that includes regular check-ins where you talk about the practical as well as the emotional issues. It could be asking along the way, “How are you doing?” Remember, it’s family, and, “Family relationships are more important than money,” Melkumian says.

With the schedule, you’ve built in a release valve. You, as the lender, don’t have to stew or wonder about what’s happening, because you know you two will be talking. “The more we leave to the imagination, the more opportunity there is for stress, anxiety and resentment,” he says.

And talking serves two more purposes. It’s a barometer, for one. If your relative isn’t willing to engage, it’s a strong sign that lending isn’t wise. But by getting everything out, fewer things will come as a shock. “The more you talk about the transaction, it will become easier to talk about it,” Calder says.

Gaining a Release

Here’s one more thing to accept: Once you give the money, it’s gone, and you need to let it go, Calder says. You can’t constantly check up on or micro-manage the person. At family gatherings or even on text threads, no one wants to feel judged or that every comment is interpreted through the outstanding loan.

Here’s a way to reframe perspective. Instead of focusing on the money, Melkumian says, think of this: Your brother or sister is struggling. You want to see him or her rebound and you want your relationship to remain strong. Act like you would with watching your stocks or even your hair grow. Progress isn’t seen by the hour, day, or week. You’re making an investment into someone you care about. That takes time. “Trust the process,” he says.

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Written by Steve Calechman

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Tips From Counselors on How to Manage Financial Stress During a Crisis

(3M) – More than 3 million Americans filed for unemployment during a single week in March as the spread of the novel coronavirus (SARS-CoV-2, which causes the disease COVID-19) forced businesses to shutter and people to stay home. Job loss, reduced work hours and financial insecurity caused by the pandemic are exacerbating stress that already stems from money.

“Whether people have a lot of money or people have no money, money is a really stressful thing in our lives,” said Maureen Kelley, a Denver-based financial therapist and founder of MADRE (Money, Assets and Durable Relationships). “This crisis we’re working [with], dealing with and living with now, it just accentuated it. And the fear and the panic around this is exponential.”

Effects of Financial Stress

Financial, physical, mental and emotional health are all intertwined.

“We can’t just assume that it’s only financial stress,” said Alex Melkumian, Psy.D., LMFT, founder of the Financial Psychology Center External link  in Los Angeles. “It’s also psychological stress, emotional stress [and] the stress that compounds our concern about our physical well-being.”

Fear and panic associated with stress can trigger the fight, flight or freeze response. Melkumian explained that we react to stress because our emotional brain, or limbic system, can take over and cloud our ability to make rational decisions.

Financial, physical, mental and emotional health are all intertwined.

“And that’s when you see the really negative response to the stress, which can be overthinking, a lot of anxiety, worry, sadness and despair,” he said.

Studies have shown that financial stress can lead to a range of physical and psychological complications. Depression, anxiety and poor work performance are among the possible psychological effects of financial stress (PDF, 254 KB). The physical health complications of financial stress can include cardiovascular disease, increased mortality, inflammation, hypertension, diabetes and digestion problems.

Long-term financial stress can also negatively affect immune response.

“When we’re stressed—chronically stressed—that stress response takes away from our immune system functioning,” Melkumian said. “We’re actually reducing our ability to cope with the virus.”

Tips for Managing Financial Stress in a Crisis

Kelley has seen an uptick in fear and panic among her clients. And although she believes the economy will bounce back, the lingering question for many people is when that will happen.

“There’s a lot of uncertainty with this,” she said. “People are losing their jobs, their hours are cut, retirement portfolios have been decimated. These fears are very real for us as a country.”

Rather than becoming paralyzed by fear and making irrational decisions, Kelly says that it’s important to learn how to manage fear, stress and anxiety.

“Look at the small things that are in your control right now around spending and know that this will pass,” she said.

OnlineCounselingPrograms.com asked a number of experts in the realm of financial counseling and coaching for tips on how to manage financial stress during crises.

1. Practice mindfulness

Become more aware of how you are feeling and identify the root of those feelings in order to move away from a panicked state.

Financial coach Jenn Steliga explained that it’s important to get comfortable being uncomfortable.

“The more we push our feelings away or ignore them, research actually shows that they grow and get out of control,” she said. “Then, we’re in a position where our emotions are controlling us.”

Simple mindfulness practices can help ease anxiety. Steliga said that if you notice you are feeling anxious, stop and ask yourself something simple.

“Sounds very silly,” she said, “but if you can say, ‘Where are my feet?’ you bring focus to something.”

Melkumian also suggested making time for short, incremental meditation sessions for a few minutes throughout the day to alleviate the buildup of stress.

2. Talk about money

“Money is still the last taboo in our culture,” Kelley said. “Nobody likes to talk about it. It’s uncomfortable. People don’t know how to talk about it.”

Money can be difficult to discuss because it is often surrounded by feelings of shame, guilt and embarrassment. Those feelings can be heightened in a crisis. Kelley encouraged people to find a safe space to talk about money with a friend, family member, financial advisor or therapist.

“Often when you’re just able to verbalize it or share it with someone else, that in itself relieves a lot of stress,” Kelley said.

3. Make a financial plan

Free budgeting apps can help families create and track budgets

“A budget is not just tracking their expenses,” Steliga said. “It’s spending every dollar on paper on purpose, before they ever hand it out to anyone at all.”

For those facing true financial hardship, it’s best to prioritize spending on basic needs including housing, utilities, food and transportation. Kelley suggested cutting down on nonessential spending and “really looking at what are the things that I can control in my spending and what are the things that are not essential that I can cut out.”

When it comes to shopping, shop intentionally, Steliga added. Take stock of products you have in your house; then, make a shopping list and stick to it.

4. Don’t focus on getting out of debt during a crisis

After meeting your basic needs, including bills and legal obligations, make your minimum payments on loans and credit lines but don’t worry about paying off debt.

“A lot of people would say, ‘Hurry up and get out of debt,’ which is a really big misconception,” said Wendy Wright, LMFT, a financial therapist based in Denver. She encourages clients to build savings while paying down debt.

It can be tempting to take on more debt when money is tight during a crisis, but try to minimize new debt. Don’t let short-term panic dictate long-term financial decisions.

5. Save money when you can

Wright suggested tracking how much money is required to meet basic obligations and then putting extra funds in a savings account for a set period of time. She encouraged using a timeline of three months and revisiting the situation after that time has passed. Having a set window to focus on saving can help reduce anxiety.

“Our brains like a beginning and an end,” Wright said.

Tips for Managing Financial Stress Combined With Other Anxiety

Financial stress from the coronavirus outbreak can compound general stress surrounding the pandemic. It can also exacerbate pre-existing mental health issues, such as anxiety or depression.

The following strategies can help mitigate financial stress when paired with other mental health concerns in a crisis.

Set a specific schedule

Creating and maintaining a schedule can provide structure for people who are home-schooling or caring for their children while dealing with struggles like job loss and financial insecurity. Schedules set boundaries and can help people avoid unhealthy coping mechanisms like binge-watching television, drinking too much or online shopping.

“Within that schedule, give yourself very specific time to job search and to get yourself on a budget,” Steliga said. “Be very specific.”

Rather than committing to looking for jobs without a real plan in place, Steliga suggested telling yourself, “I will job search for 30 minutes tomorrow morning at 9 a.m. at my kitchen table with my coffee while my kids are doing homework.”

Practice basic self-care

Eat well, exercise, and try to avoid round-the-clock binge-watching. Avoid heavy social media use and excessive news consumption.

“Do the things that bring you into a good place so that you can continue to make good choices,” Steliga said.

Treat yourself with compassion and practice gratitude

People are being asked to make important decisions while dealing with fatigue. Wright said that “pacing yourself, building a routine [and] sticking to your routine as much as possible” can help create a sense of steadiness during uncertain times. That can also include maintaining previously established mental health interventions.

She also said that it’s important to remember everybody is doing the best they can.

Recognize and address grief and worry

Crises can bring a heavy sense of loss. Identifying the stage of grief that you’re experiencing (denial, anger, bargaining, depression or acceptance) can help you build connections with others. People experience grief at different rates, so naming which stage you are in can allow you relate to people in different stages.

Melkumian also encouraged “scheduled worry sessions”—actually set aside 5 to 10 minutes during the day where you allow yourself to worry. The paradoxical intervention helps contain anxiety.

“You get your worries out for 10 minutes, but then the rest of the day you’re worry-free,” he said.

Although worrisome thoughts may still arise throughout the day, it’s up to you to guard your own mental well-being and protect yourself from those automatic thoughts, Melkumian said.

Lean on support systems

Staying connected in times of crisis is vital.

Seek financial advice from people who are grounded. Look for support from friends, family members and counselors who are financially stable. And if you are unable to see your regular counselor, look into telehealth options.

Additional Resources for Managing Stress Related to COVID-19

These resources can help alleviate financial and other stress-related to the coronavirus outbreak.

Financial Resources

Mental Health Resources

This article is for informational purposes only. Reach out to a financial professional before making any important financial decisions. If you are experiencing mental health issues related to financial concerns, consult a mental health professional.

Are you interested in supporting people through mental and emotional challenges? Learn more about how to become a counselor.