No debate, these are stressful times. While this pandemic continues to unfold, here are some suggestions I compiled for the clients of my planning firm for how to cope with the stress that all of us are feeling.
I have divided it into three sections: advice for all, advice for those already retired or close to retirement, and those still in their working years.
Advice for All
- Don’t panic. While it feels like this is unchartered territory (and the media hypes the situation that way), it is not. We’ve had major economic and health crises before in this country and in the world, and this too shall pass.
- Change your focus. Discipline yourself to remove or at least reduce your focus on the market. Don’t obsessively watch your investment accounts: it is better to forget about them for now and spend your time elsewhere.
- Limit your exposure to media. Stay up to date on the news but limit your exposure to it as much as possible. There is nothing to be gained from hours and hours of media exposure other than a whole bunch of anxiety and stress.
- Stay healthy. Focus on staying healthy. We have clearly gotten the message about hand washing and social distancing. But don’t forget to get enough sleep, eat well, and get some exercise. The easy trap is to sit on your behind all day and watch the drama unfold, eating unhealthy foods. Instead, use this time to focus your efforts on getting more sleep and maintaining a healthy diet. Don’t forget that exercise helps reduce your stress!
- Breathe. Just now writing the above, I caught myself breathing shallowly and feeling anxious. See, I’m not immune to stress! Stop a few times each day, close your eyes, and take some deep breaths. (Just not within six feet of anyone else, ha ha!)
- Keep yourself occupied. If you find yourself with more time on your hands due to self-isolation, find some meaningful things with which to occupy yourself. Read, take an online class, communicate with friends and loved ones, finish those house projects you’ve been avoiding, plant a garden, take a walk, love on your pets. The list of things you can do besides sit around and freak out about COVID-19 and the stock market is endless.
- Be grateful. If today you have good health and people you love and who love you, count yourself lucky.
- Don’t be greedy. For some, this market downturn might feel like a golden opportunity to buy into stocks “on sale.” Resist the urge to invest your emergency cash. Short-term savings should not be invested in stocks. The market may very well go down more before it recovers, and in the meantime, you might need that cash.
If You are Retired
- Cut your spending. If you are spending more than the recommended percentage (typically 4%) from your portfolio, cut back to 4% or less.
- Postpone large spending. If you have plans for home renovation, travel, or other large purchases, consider postponing them for a few weeks or months.
- Don’t worry about your portfolio. Remember that in 2008-2009, the market was down for many months, only to have a breathtaking rebound in a short number of months.
- Consider rebalancing your portfolio. Since your stock funds have dropped in value, consider rebalancing now to buy into the stock side low. If you are a nervous Nellie, the thought of buying MORE stock now might freak you out. If so, just stay put.
- Not retired, but close? If you are nearing retirement, evaluate whether working for another year or two might be wise.
If You are Still Working
- Assess the stability of your company. Depending on the recession, different types of businesses can suffer, while others are able to weather the storm. Certainly, we are seeing employees in the service industry suffering already as numerous businesses close due to governmental decree. Objectively evaluate the status of your industry and plan accordingly.
- Check your benefits. If you are concerned, examine your company benefits and determine what you might lose if you are laid off. Some benefits, such as health insurance, can be extended (group health insurance is extended through COBRA). Find out how much that will cost you in the event you lose your job. Your company might also offer outplacement services to help you find another position.
- Spend less and build savings. The mandated quarantines and business closures are making it much easier to cut our spending. Don’t make the mistake of redirecting your spending to online sources of shopping and entertainment, though! Instead, focus on building and maintaining your emergency fund with any spare income you have.
- Scan for opportunities. If your job is in jeopardy, or you are already out of work, watch for job opportunities cropping up as a result of this crisis. Companies that provide essential services and delivery, for example, are hiring temporary workers now. This might be a stopgap until things settle down and you can find something more permanent and to your liking.
- Definitely consider rebalancing your portfolio. Since your time horizon is longer, you should definitely consider rebalancing your portfolio to buy into the stock side while stocks are down. Remember that investing is for the long term. This downturn will eventually end, and the economic cycle will continue. While we don’t know the timing, we do know that what goes up eventually goes down, and what goes down eventually goes up.
Maintain a positive attitude. No one benefits from everyone being in a panicked, negative headspace. Stay focused on what is good in your life and what you have to be grateful for, and avoid dwelling on the negative. We’re all in this together!
How about you? How are you handling the stress of the moment? Share below! Or if you want to start a discussion with some like-minded friends, join the free SimpleMoney Community on Facebook to share your thoughts!
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