Interest rates and inflation – and a recession – can be stressful. But stay calm. Here’s how.

It seems as though we are experiencing a period akin to the end times. There has been (and continues to be) a pandemic, and if you peruse comments on news articles or mention it during conversations, the country appears to be “on fire”. Then there’s the high interest and inflation rates, making housing and groceries unaffordable for many people.

No surprise, money is the #1 stressor for people at 40% for the 6th year in a row, according to FP World’s 2022 Financial Stress Index. With everything that’s going on, budgeting and planning for retirement seems pointless. Why is it so hard to make financial planning and investing decisions when you’re overwhelmed? Glad you asked.

Managing Stress and Finances: How To Make Wise Choices With Your Money By Taking The First Steps.

According to Samantha Skyleres, a senior investment advisor with Raymond LLC, one of the reasons people have so many big decisions to make is they don’t know where to start. Her clients, mid 30s to early 70s, are getting an inheritance or have finally started making a decent salary and are trying to balance getting married, buying a home and starting a family. “They are feeling inundated with significant choices regarding actual finances and adult responsibilities. There are just too many decisions to make these days. So many times it’s just easier to leave it. It’s easier for clients to hit pause on making too many big financial decisions at once and walk away.”

Chanel Prestoner, CEO of financial Ignoracy program The Trauma of Money, agrees it’s hard to find a starting point. It’s common for Peaple to not know where to start with their money and instead avoid or ignore it.

“Financial avoidance is very common,” says Candice Downwood from her home in Boston. She explains avoidance comes from the belief that scarcity is present or the person is catastrophizing their situation in their head. Triggers for this kind of “analysis paralysis” can be things like inflation (we just saw record numbers for the Consumer Price Index last year) and feeling overwhelmed. So the brain tries to survive the stress and that can manifest as avoidance.

While burying your head in the sand is an option, it’s not a good one. “The problem with avoidance is it’s a way to reduce pain in the moment,” Chapman says. “It gives us temporary relief but there are consequences to avoidance.”

Those consequences are real. They include not paying bills and statements, not talking about money with friends, family and advisors, not knowing your credit score and not having a handle on your net worth.

Relax and Explore Your Money Story

Starting the financial planning and investing process means looking at your relationship with money, says Chapman. That means looking at the story around your money and why you might be avoiding it.

Chapman says ask yourself these questions to get into your money story.

• What were the messages I heard at home?
• What was it like growing up? How did money fit in?
• What are the messages I’m hearing from society about money right now?
• What am I hearing on the news?
• What’s the narrative driving your behaviour?
• How can I use this to create a new narrative that’s helpful from a financially stable perspective?

Doing this helps a person move out of the scarcity mindset and the impulse decision making process so they can change their attitude and feelings towards money.

Chapman suggests surround yourself with a team of friends, family and financial professionals that support you on your financial planning journey, which is where someone like Sykes comes in.

Ask For Help When You’re Stressed About Money

You’re already 90% of the way there just for asking for help. “I give my clients a high five just for asking for help,” says Sykes, “because people who make an appointment with me have already made the biggest step towards managing their money. They’ve overcome a lot to pick up the phone or send an email or find somebody like myself and put themselves out there and say ‘I need help.’”

Always Ask About You Don’t Know so You Know

Financial jargon can be off-putting for many who aren’t financially literate and will stop them from making investment decisions in the first place. Candice talks to her clients in their language. She works with a lot of creatives so she uses analogies and examples they understand.

You can also add a recurring calendar meeting with the link to the movement and learn one term a day. Unlike many others you’ll find online, this one has personal finance and investing terms for people.

Start With a Quick Win, An Easy Decision

A great way to boost your confidence in beginning your financial planning path is by achieving a small victory. “It’s a way to make the client feel like they accomplished something,” says Sykes. She says to look at what’s keeping you up at night, what’s the one thing you want to get done today and in the next 3 months.

An example could be setting up a registered education savings plan (RESP) or making a will. She points out many of her clients have dealt with a parent who died without a will. It’s a lot of work you can avoid.

Meet Somewhere Comfortable

While meeting in an office is one option, Candice meets her clients where they’re at, especially when she has to extract information or get them to sign documents.

She’ll meet up for a walk, go for ice cream or bring them their favourite coffee, she says. ““With their guard lowered slightly, they often provide me with the necessary information, or I can collaborate with other reliable experts such as their accountant who might, have their driver’s licence and their social insurance.”

Have a Buddy

Downwood suggests that having an accountability partner can assist you with your financial planning. She mentions that it could be as straightforward as sharing your objectives, such as building an emergency fund, and seeking their support throughout your journey.

When you feel tempted to spend, your accountability partner can help you analyze your desire to make a purchase and may even persuade you against parting with your hard-earned money. It’s important to recognize that it’s tough out there, and certain issues like the housing crisis are beyond individual control. However, there are strategies you can implement to alleviate the stress associated with your finances, providing you with one less concern in an unpredictable world.Copy