How to soothe financial anxiety during times of uncertainty

Periods of uncertainty, such as the cost of living crisis, could lead to overwhelming financial anxiety. Learn how to soothe these feelings and regain control.

The current economic climate may have led to overwhelming financial anxiety for you and some of your clients.

The cost of living crisis, global elections, and a change of government in the UK have made 2024 an uncertain and challenging time for many.

According to research published by the Money Advice Trust (2 January 2024), 47% of UK adults started the year worrying about money, and 32% expected their finances to worsen by the end of 2024.

So, how can you soothe any feelings of anxiety you and your clients might be feeling about your financial security?

Read on to learn how to remain calm and financially confident, even in the most uncertain times.

Identify the specific triggers of financial anxiety

There may be many potential triggers of financial anxiety. Uncertain times could lead to concerns about loss of income, underperforming investments, or saving enough for retirement.

Understanding the root cause of money worries is a crucial first step in learning how to overcome them.

However, during turbulent times, it may not be easy to pinpoint the most pressing issues.

So, it might help to write down a list of financial concerns. Seeing them on paper could make it easier to identify the issues that are causing the most anxiety. Prioritising concerns in this way and tackling them one at a time could ease feelings of worry and stress.

Talk through financial concerns with loved ones

Keeping financial concerns bottled up could allow them to spiral out of control. Whereas, talking money worries through with a trusted friend or family member might avoid such catastrophising (viewing a situation as considerably worse than it is).

What’s more, dealing with financial anxiety alone could be extremely isolating. So, sharing concerns with a loved one may provide welcome relief and support.

However, it might feel awkward and uncomfortable talking about personal finances with someone else. Indeed, it is still seen as taboo in many households to discuss money and wealth.

A helpful way to approach such apprehension is to prepare for the conversation by making notes and finding a quiet place to talk.

Remember that periods of volatility are unlikely to last indefinitely

A key financial concern for investors during periods of uncertainty is how fluctuations in the market could affect their portfolios.

During such times, it’s important to remember that market volatility is inevitable. Investments will perform well sometimes and less well at others.

Indeed, the global economy has faced many challenges, such as the financial crash of 2008 and the war in Ukraine. Yet, while the markets may fall in response to such events, they typically recover over the long term.

As an example, ABC News (12 August 2024) reported that on 5 August 2024, the US S&P 500 index suffered its worst trading day since 2022. Yet, within a week, the markets had almost fully recovered.

While such volatility may feel disconcerting, taking a long-term approach to investing could help alleviate any feelings of anxiety about short-term market fluctuations.

Tune out external “noise” and focus on personal goals

As seen above, it’s impossible to predict or control the many and varied external factors that could affect personal finances.

The government might amend certain tax laws in the next Budget, inflation could rise, or global conflicts could lead to market volatility.

Yet, worrying too much about these issues could result in feelings of powerlessness and overwhelm.

On the other hand, tuning out this external noise and focusing on personal goals may ease feelings of financial anxiety.

That’s why it is crucial to put a financial plan in place. Setting short-, medium- and long-term goals, and identifying how to achieve them, could provide a reassuring sense of control during uncertain times.

Work with a trusted financial expert

A financial expert can provide the knowledge, guidance, and support you and your clients need to overcome financial anxiety.

Often, a lack of confidence in making money decisions can lead to stress and worry. Working together with a financial expert could help boost your clients’ financial literacy and empower them to take control of their wealth.

What’s more, a financial professional can steer your clients away from focusing on negative, external factors, and provide an objective, balanced perspective. For example, if your clients are anxious about one of their investment funds underperforming, a financial expert can remind them that short-term fluctuations in the market are inevitable, and downturns are unlikely to last indefinitely.

Get in touch

If your clients are going through a divorce, their financial anxieties could be exacerbated. I can help them regain their financial confidence and put them back in control of their wealth. Please contact me at lottie@truefinancialdesign.co.uk or call 07824 554288.

I am also happy to discuss cases with solicitors first, before you refer your clients to me, or you can contact me by email and CC your client accordingly. I am happy to accommodate whatever mode of communication works best for you and your clients.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. 

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.