8 Tips To Manage Financial Stress

I am feeling poorly today, so I am posting something the brilliant blogger Therese Bouchard posted last week in her award winning blog "Beyond Blue'. If you have not seen her blog, follow the hyperlink on my blog roll. Thank you Therese for letting me post this!

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Like most dinner conversations last night, ours was about Wall Street and our course of action. As Eric and I talked about what best to do at a time of financial crisis, it occurred to me that the same tools that I use for my general anxiety disorder can be applied to Wall Street Anxiety: when you fret about losing your home, car, stocks, junk bonds, retirement savings, college funds, and everything else in the lyrics of a bad country song (truck, sorry forgot the truck).


1. Ignore Amy
The amygdala, the almond shaped group of neurons in the limbic system of the brain, is considered by most neurobiologists our fear system, and it acts like an ape or a how a human would have acted, say, back when we still had lots of hair all over. The adrenaline that you are feeling when you see stock exchange plummet is the amydala getting crazy, hosting a party in your head, whatever. I call my amygdala "Amy." And whenever I panic, I tell her to go take a nap, that I can't tolerate her noise and ruckus right now.


2. Distract Yourself
It's not easy to quiet your amygdala, which is why the best thing you can do for yourself at times is to distract yourself. My mom knew the importance of this point when she knitted 100 blankets the year my dad left. For every occasion for about 10 years, everyone would receive an afghan as a gift. Until she stopped getting invited. (Just kidding.) This activity pulled her through the worst years of her life.


3. Surrender Control
The most uncomfortable part of a Wall Street crash is the lack of control most of us feel. It's contrary to our human psychology. We want to drive the car, or at least be the passenger in the front seat giving directions. But in an economic downturn, we're not even in the car. We have no say on which rest stations we are stopping at. In fact, much of the time if feels like we are riding in the trailer hitched to the back of the car. With the horses. Admitting that we're not in control can be somewhat liberating. Because the stock market is life: you win some, you lose some, and you don't have a whole lot of say in the whole matter.


4. Know Thyself
This is a great point Eric made last night as we talked about a friend of ours who always freaks when the stock market dives. She sells all of her stocks and then invests again when they go back up. And she loses a lot of money in the process. Eric said, "Her problem is that she doesn't know her risk tolerance. If she would realize that she has a low risk tolerance, then she'd see that she'd be better off in bonds and more conservative investments. Instead, she pulls out whenever there's movement on Wall Street." Just like every other kind of anxiety, knowing yourself can lead you to a path of peace.


5. Turn It Off
Just like I said in my post "8 Ways to Manage Anxiety on an Anniversary," one of the worst things you can do for your amygdala, or fear system in the brain, is to keep the TV and radio tuned into the latest news on Wall Street, to keep checking cnn.com to find out what the newest number is. This kind of compulsive behavior is toxic for the obsessive, sensitive folks who are prone to anxiety even without a reporter telling them to run for cover. Treat your amygdala well. Turn the news off. Except for this piece, of course.


6. Get Greedy
This point may seem contrary to the others, but I have studied investment strategies, and think there's logic to what Warren Buffet once said: "When everyone is fearsome, that's the time to be greedy, and when everyone's greedy, that's the time to be fearsome." What does he mean? If after you analyze your risk tolerance and decide you do want to keep some stocks in the market, then this is the time to buy. It's the same sort of logic I describe in my "12 Depression Busters" : when the last thing you want to do is to get dressed and say hello to some folks, that is the time when doing so is more important than ever.


7. Do Nothing
If you realize that your risk tolerance is quite low or if you have absolutely no money to invest, you can relax and do nothing. A story I read the other day profiled a guy who threw away his PIN number so that he couldn't check his stocks any more. Just knowing that downturns are part of the economic process for the reward of high gains--that you have to risk volatility to acquire any profit and that this is all the nature of the beast--can sometimes help you sit tight and hang on during the wild ride.


8. Trust
I often make the point in dealing with severe depression that you absolutely have to trust that you won't always feel so horrible and hopeless, that you WILL get better. Part of successful cognitive behavioral therapy is trusting in that optimistic message. It has the power to pull you forward. So know this: the economy will run its course and the stock market WILL recover.