The Financial Crisis: Overcoming fear and stress

Ajay has a good job and a happy marriage. But lately he has been very anxious as he follows media coverage of the economic downturn. He is not sure if his job is secure, and worried about repaying the EMIs on his housing and personal loans and the children's fees. These days Ajay and his wife frequently quarrel over finances, the children grumble when they can’t have the ‘extras’ that they took for granted. He is tense and irritable, and finds it difficult to sleep, eat, or enjoy time with the family.

Ajay is not the only one in this position. News of the crashing stock-market, recession, layoffs, salary cuts… the uncertain financial situation is certainly a cause of great stress to most people. For those who until recently were very comfortably off, worries about how to handle day-to-day living as well as long-term financial commitments could be overwhelming. In the current economic situation the fear of unemployment is also very real. With so much emphasis on the financial crisis it is difficult to avoid feelings of anxiety and distress.

COMMON REACTIONS
Individuals could react to the situation in a variety of ways depending on the degree to which they are personally affected. The impact could be felt in many areas of one’s life:

At WORK it may be hard to maintain productivity. There could be a tendency not to give full commitment to the work because one is preoccupied with possible job loss and wondering whether other options should be checked out. At the same time there may be additional workload and pressure to prove oneself. Whether or not one’s job is directly affected, there may be anxiety about possible changes in the future.

On the PERSONAL front, individuals and families may struggle to cope on a reduced budget. Difficult decisions may have to be made regarding purchases, investments, housing – even marriage plans may have to be deferred. EMI’s, school fees, loans, credit card dues all need to be paid on an income that may be less than anticipated. It is not easy to explain to families that they can no longer afford the same holidays, clothing or schools. Disagreements related to finance may affect marital and other relationships.

PHYSICAL HEALTH may also be affected, with anxiety reactions, insomnia, headaches, back-ache, skin and digestive problems. Some individuals may resort to excessive use of alcohol or smoking as a way of escape, which in turn could lead to further problems.

COPING STRATEGIES
These difficult times are likely to stay for awhile. Instead of giving in to feelings of panic or denying the magnitude of the problem, one needs to face the situation squarely and take steps to get one’s life under control. Experts recommend a number of steps that could be helpful, and warn against others that are actually counter-productive. Let’s look at some of these.

DON’T . . .

• Don’t turn to substance abuse. Turning to alcohol, drugs or excessive smoking is one way in which individuals could try to escape their problems. This type of “solution” is only going to make matters worse. Drug addiction or alcoholism will leave the individual in no shape to recover financially when things do improve.
• Don’t take it out on loved ones. During times of stress there is often increased irritability and frustration and some individuals may resort to physical abuse of their partners or children as a means of coping. This of course is unacceptable and anyone who feels the urge to hurt their partner should seek help from a counselor to manage anger immediately.
• Don’t turn inward. Another possible reaction is to ‘clam up’ and withdraw from others. By doing this one is shutting off from people who want to help as well as from potential solutions to the problems.
• Don’t make sudden financial moves based on fear or stress. Proceed with caution and get expert advice before making impulsive decisions, such as selling your home, borrowing from your provident fund or changing investment options in your retirement savings plan.
• Avoid too much exposure to news about the economy. If this makes you worry. Limit how much financial news you read, listen to or watch.

DO . . .

• Stay positive. Those who maintain a positive mental attitude through tough financial times are the ones who bounce back the quickest. Try to recognize and appreciate all the positive things in your life. Focus on relationships with your friends and family, and your emotional and physical well-being. This will put things in a proper perspective and help you get through each day.
• Focus on what you can control. You cannot control the stock market or the economy, but you can control certain aspects of your personal finances. Remember that even in the past there have been financial highs and lows. The best way to get through the lows is to manage your money wisely and find ways to cope with uncertainty.
• Get financial counseling. Contact a financial expert (eg your chartered accountant) who can give you short-term solutions for your current financial problems without losing sight of your long-term financial goals so you’re not back in the same position a year from now.
• Learn to budget and use money wisely.
• Learn techniques to cope with anxiety and stress. Try relaxation, deep-breathing exercises, increase your physical activity and sleep and make an effort to be involved with some leisure activities.
• Upgrade your skills. This is a good time to carry out your plans to study further. This would not only serve to distract you from brooding over the crisis, but even more importantly, will be a great help in improving your prospects when the recession is over.
• Volunteering Helps. Studies have shown that helping others can improve the helpers own well being, getting involved with others can be stress relieving as it takes the focus off our selves. Volunteering makes people happier and more confident besides allowing them to learn a new skill and network with people. It could help keep things in perspective specially when helping those less fortunate than ourselves it reaffirms our self worth and gives us hope.
• Live one day at a time. Making a conscious effort to focus on the "here and now" rather than thinking about the future can help calm fears.
• Be a rock for the family. You will need to set the tone for everyone in the family. By staying positive, and being there to calmly address the concerns of family members, you can help everyone get through these stressful times without emotional downturns. The result will be a stronger family bond that serves everyone – in good times and bad.
• Manage your emotions. When facing financial difficulty, it's easy to panic and not think through decisions. Another common reaction is denial. Pretending the problem does not exist will not make financial issues and stress go away either. It's important to be aware of and handle your emotions so you can make informed choices.