Hi, I'm Rick Kahler, thanks for joining me.
Somebody recently asked me, "How can people avoid
financial stress during this pandemic?"
As a financial planner and a financial therapist, my only
honest answer has to be, "Most Americans can't."
The economic fear and stress of the
COVID-19 crisis affects many of us
retirees living on income from investments,
business owners facing the impact
of the pandemic shutdowns on their workers and
their own livelihoods,
employees working from home, and those
who have lost their jobs and are struggling
to provide for their families' basic needs.
However, financial stress isn't the same
as emotional stress, although the two
are often conflated. The better question
might be, "How can people cope
with the emotional stress that can result from the
financial stress during this pandemic?"
Obviously, at least from my perspective,
seeing a financial therapist would be really helpful.
Just as obviously, this isn't an option
if your financial stress comes from struggling
to pay rent and buy groceries because
you're unemployed. But you still may be able to
use some of the tools of financial therapy
to help you cope.
The first is to accept the reality
of the stress. Move toward it, rather than depleting your
emotional resources by trying to avoid or resist
your feelings around it. Notice what you are saying
to yourself. What's the self-talk, the messages
that are going through your mind.
Scan your body for sensations like
tightness in your neck or shoulders or pain in your gut.
These are usually clues to your emotions.
They help you to become aware of your
feelings and when you are, name them.
Is this fear that I'm feeling, anger, shame,
hopelessness, or whatever they may be.
Naming the feeling is incredibly relieving. Just kind of
dumbfoundedly so. Then, allow yourself to feel
the feeling, to sit with it for a time.
When we do this, they typically pass.
Some research says within 45 to 90 seconds,
resulting in greater clarity and lightness.
The second thing is to bring yourself into
the present moment. Are you okay right now?
I mean ask yourself, am I okay in this moment?
Am I breathing? Am I able to function?
Am I not in immediate physical danger?
What's happening right now?
Naming the emotions that you're feeling right now
and grounding yourself in the present
can help restore your ability to think.
Then you can begin to problem solve.
Next, objectively observe your situation,
not interpreting it, [but] observing it.
Are your finances stable for now
but maybe you're worrying about the
security of your income.
Are you facing eviction or foreclosure right now?
Are your fears and worries realistic or
might they be out of proportion to the circumstances?
Then, assess your financial, occupational,
and emotional reserves.
Financial resources might include
emergency reserves, retirement accounts,
potential loans, help from family or friends,
social service programs, maybe possessions
that you could sell.
Occupational resources could include skills,
that might help you find alternative employment
or generate income.
Emotional resources include your own strength
and resilience as well as the friends and family
who are your support system.
Next, draw from past experiences.
You may have been seriously affected by
and emerged from market drops,
housing crisis of the 2008-2009 recession.
You may have experienced and learned
perspective and wisdom from personal life challenges
like these, serious illnesses, financial setbacks,
failed relationships, or the death of loved ones.
How did you make it through that?
What shifted for you?
You can apply those same skills to what
you're going through now.
Then focus on present needs.
Prioritize the most urgent, immediate needs.
Put your energy into providing food and housing
for your children, reducing your spending,
or finding creative ways
to keep the doors open at your business.
Next, leave future worries for the future.
You may need to temporarily set aside
longer term financial consequences like credit card
debt that you can't do anything about right now.
Worrying about future possibilities
that are out of our control. Like will the stock
market crash again, or will my employer
go out of business?
All this only depletes the energy we need to cope
with the present.
And finally, be open to possibilities.
Coping strategies like temporary jobs,
ventures into the gig economy, or shifts in the way
that your company may provide its services,
might turn out to be doorways to new careers
and income opportunities.
Thanks for joining me.