To survive inflation, think about it like the weather
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Here's what: Inflation has a psychological toll
If you've been in your head a lot recently, worrying or ruminating or planning or calculating, you may be experiencing the psychological toll of inflation.
Surveys have found that when consumer prices tick up, so too does anxiety, and it can lead to impulsive behaviors that hurt you in the long run — like selling out of all your stocks because the market has dropped dramatically and you're terrified of losing more money.
"In therapy-speak we call it 'anticipatory anxiety,' where somebody has anxiety about things that they are anticipating," says Lindsay Bryan-Podvin, a social worker and financial therapist. "It can take up a lot of energy. We see a lot more exhaustion, and tiredness, and burnout, because the thoughts in their head are quite a bit busier."
With a lot of issues around money, like ups and downs in the stock market, we may realize they're happening in the background but they don't affect us on a day-to-day basis. But with inflation, Bryan-Podvin explains, the impact is obvious.
"With gas prices, it's a price they see daily or every other day. So when that number goes up or goes down, it's something we can really see," she says.
Another place where inflation is obvious is at the grocery store. There, anticipatory anxiety shows up in many ways, including suddenly having to worry about your grocery spending more than you ever did before.
"For a lot of my clients, they might have been the types of folks who'd just run in and out of the grocery store without thinking twice about it; now they're being a bit more thoughtful about their menus," says Bryan-Podvin.
While some old-school financial gurus might say, "That's good! You should have been meal-planning to begin with," Bryan-Podvin points out that that's not exactly helpful.
"If it wasn't very stressful for them and it wasn't harming them to run in and grab a few items, then it's not that big of a deal," she says. Now, though, having to think a lot about each purchase can lead to more stress.
How to 'dress for the weather' to deal with the toll
Think about inflation like inclement weather, Bryan-Podvin advises. "We can't change the weather, but we can dress for it," she says. "When it comes to dealing with things like a potential recession, inflation, stock prices falling — we have zero control over that. But we can financially dress for the weather."
Start by protecting yourself with an emergency fund: Even if you haven't saved a dime for emergency expenses up to this point, it's never too late to start. Don't beat yourself up — just start tucking away spare cash now that you can rely on if lean times continue.
"That provides psychological safety and literal financial safety," says Bryan-Podvin. "Even $20 a week is better than $0 a week. We want to build it up over time."
Take a look at your spending: You don't have control over inflation, but you do have control over your own output to a certain extent.
Bryan-Podvin recommends calling or chatting with your cell phone provider and internet provider; you may be able to downgrade your service or ask for a better deal as a loyal customer. And while you can't necessarily change how much you spend on utilities, your gas, electric, and other providers may be willing to charge a balanced rate every month so you have a more predictable bill.
"It can be helpful to look for duplicate subscriptions," adds Bryan-Podvin. At one point she and her husband were both paying for Netflix, for example. "Even financial therapists struggle with this."
See if there's a way to increase your income: Put simply, think about asking for a raise or doing some side work to temporarily bring in more money if you need to cover your expenses.
Don't look at your retirement accounts: If you have years before retirement, it's not worth the stress to look at your accounts now — the market will rise and fall many times before you're ready to leave work. Over the long term, it always goes up. And remember: You only lose money if you sell during a dip.
— Stephanie Hallett, senior editor of Personal Finance Insider
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