The recent tariffs and economic uncertainty have caused significant stress for many Americans. However, behavioral financial expert Clements Evans advises that worrying isn’t productive. “Worrying doesn’t help, but being prepared does,” she says.
Evans offers three pieces of advice to help reduce financial anxiety. First, focus on what you can control, such as boosting emergency savings and revisiting budgets. Second, ignore the headlines when making money moves.
“People don’t make money mistakes because they’re dumb; they make mistakes because they’re emotional,” asserts Evans. Self-made millionaire Ramit Sethi agrees, advising against drastic financial changes unless facing an immediate emergency. “One of the most important things in a time like this is to slow down and be methodical,” Sethi says.
Finally, Evans recommends taking breaks from distressing news. “Go listen to something funny,” she suggests.
Financial experts urge calm strategies
This doesn’t mean ignoring reality but rather allowing yourself moments to de-stress. “Laughter has a real healing power,” Evans adds. By focusing on what one can control, avoiding emotionally-driven financial decisions, and ensuring to engage in activities that bring joy, it’s possible to mitigate stress amidst economic uncertainty.
These strategies won’t magically resolve external issues but can help manage personal anxiety levels effectively. Financial experts advise sticking to a strategy that reflects your ability to take risks both financially and emotionally. Settling on an investment strategy and sticking to it can help you feel confident that when you do make changes, they suit your investment goals.
Building a cash cushion is also top of mind for many investors. Retirees or those planning to stop working soon might want to take “some risk off the table” and have enough cash “to sustain withdrawals for a year.”
Even policymakers are uncertain about the economic impact of the tariff changes. To cope with the uncertainty, financial advisors recommend focusing on the fundamentals.
“Pay more attention to the data than the narrative,” said the founder of Delancey Wealth Management in Washington, D.C.
Sticking to these strategies can help you navigate through market volatility and keep your investments aligned with your financial goals. While the current economic situation may seem daunting, being prepared and making informed decisions can help reduce stress and protect your financial well-being.
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