Whether you are retired or still working, here are some tips for managing this stressful time.
Welcome to the SimpleMoney Podcast, where we make personal finance less intimidating. I’m Dawn Starks, a financial planner and lover of the simple life. I’m here to talk about money and simplicity. Let’s dive in. This is Episode 129: Advice for this Stressful Time. So there’s no debate, this is a very stressful time for everybody. Whether it’s health concerns or economic concerns, we’re all worried about things. And, as this pandemic continues to unfold, I came up with a list of things to help my clients, to give them some guidance about what things they could do to help them cope with the stress that we’re all feeling.
So I thought I would share that with you. So I wrote this at the end of March, and I’m recording this on April 7th. So, these are things that I’ve divided into three different categories: advice for all people; advice for those who are already retired or close to retirement; and advice for those who are still in their working years. So advice for everybody. First and foremost, don’t panic. So I know it feels like we’re in uncharted territory. I hear that all the time when we have a big market event,
a stock market event, where the stock market starts to go crazy, and everybody’s like – “This is never happened before!” and it’s this whole “We’re in unchartered territory” – it’s that kind of attitude. And you know, certainly we have not had this exact set of circumstances, and never do, but the market tends to repeat itself, and it tends to act in a similar way when things are happening in the economy and in the world. So we’re not technically in unchartered territory in that regard, but the media will hype it up.
And so that’s the reason that I encourage people not to panic, because you just have to sort of take a step back and look at the bigger picture. And the market’s not going to go to zero. The economy is not going to go to zero. Everything will recover. The only question is when. So, don’t panic. The next piece of advice is to change your focus. If you can’t not focus on, I mean, if you can’t not pay attention to the news then, discipline yourself to remove, or reduce, that focus that you have on the market, of watching the news, or listening to it, or reading it on the Internet,
however it is, you like to consume your news. If it’s causing you stress to watch the market go up and down, and up and down, then just stop watching it. Change your focus. Put your attention somewhere else. Similarly, the next piece of advice is to limit your exposure to media. You want to stay up to date on the news, especially in circumstances like we are now, where we want to know what’s happening and things are happening fast and changing fast. But you’ll notice if you pay attention to the news throughout the course of a day,
for example, that it repeats itself. And so what you find yourself doing is watching the same things, and reading about the same things, over and over and over and over again. And that really drives up your anxiety, so really limiting your exposure and just, you know, catching the headlines in the morning, and then going about your day, and maybe checking in sometime in the middle part of the day, and maybe checking again in the evening. And not watching it all day long or, heaven forbid, putting your TV on in the background and listening to it all day long while you’re going about your business at your house.
Try to limit your exposure to the media. Another tip that applies to everyone is to stay healthy, okay? We need to focus on staying healthy.
That sounds really dumb, right? Sounds basic that we need to focus on staying healthy. We’ve gotten this message about hand washing and social distancing,
but don’t forget about eating well, and sleeping well, and getting exercise. You know, it’s easy for us to kind of move into this
state of just being frozen, and not wanting to do anything, because everything has been kind of turned on its head, and we’re not really sure how to react.
But instead you just need to focus on making sure you’re going to bed at a good time, and getting up at a good time, and make sure you’re getting steady and stable sleep.
Make sure you’re eating healthfully, and not loading up on comfort food and carbs, and making sure you’re getting some exercise every day.
I mean, surely, now, more than ever, you have the time and the opportunity to get exercise that maybe when you’re going to work every day,
you don’t have as much time. So you don’t really have much excuse for not getting your exercise. So just focus on that and remember that getting exercise also helps reduce your stress.
So if you’re feeling anxious and stressful, getting exercise will help with that. Relatedly, another tip is to make sure you’re breathing.
When I was typing this up a few weeks ago – I think things have improved for me
since then – I caught myself breathing shallowly and feeling anxious. And so, you know, that was kind of my tip for myself to say,
“You know, Dawn, you’re not immune to the stress. You know, just because you tend to be good in a crisis and can manage things, doesn’t mean you’re not feeling anxious and stressed.”
So I encourage myself, I do, I encourage myself. I try to remind myself to stop a few times every day, and close my eyes, and take some deep breaths.
Of course, just by yourself, not around other people, you don’t want to be giving big exhales right next to your your friends and family.
But you do want to try to take some time where you can take some deep, cleansing breaths and get some of that anxiety out.
And it will help relax your body too, because you’ll recognize and realize that you are holding tension in your shoulders and your neck while you’re doing that shallow breathing.
Another tip is to keep yourself occupied. If you find yourself with more time on your hands than you’re used to, then find something meaningful to occupy yourself with.
Don’t fall into the trap of filling those times, that extra time you have now, with watching the news, or reading other sources of media, or listening to media or whatnot.
You might think about reading, or taking an online class. Making sure you’re staying in communication with your friends and family.
Maybe you want to work on your house projects that you’ve been avoiding or claiming you didn’t have time for. We’re at the springtime so you could plant a garden.
You could take a walk. You can just love on your pets, give them a good grooming and and just snuggle with your pets on the sofa,
if that makes you happy. So find things to keep yourself occupied that are not related to sitting around and feeling freaked out about COVID-19, and the stock market, and the economy and all of those things.
Along with these other tips, I encourage you to always remember to be grateful. Remember that if today, if you have good health, and you have people who love you and you love them,
then consider yourself lucky, because you have more than some people in the world. So always try to remember that.
And instead of feeling, “Oh, woe is me” about your current circumstances, remember the good parts. Remember the things that you have to be grateful for,
and I find that gets me out of many a funk. When I am not feeling super happy and optimistic about things,
I remind myself just how lucky I am, and that helps me put everything into perspective. So this last general tip that applies to everyone is to not be greedy.
So for some people, this downturn in the market might feel like a golden opportunity to buy stocks on sale.
And I would suggest you resist the urge to do that. I definitely think you should not use your emergency cash.
Remember that your emergency fund, your emergency cash, has been created and accumulated for emergencies: to pay for your bills
if you’re laid off of work; or if you’re out with illness; or whatever is causing you to have less income,
that’s what your emergency fund is for. If you take your short-term money, your emergency money, and start sticking it in the market –
as volatile as the market is – that’s very, very dangerous. So I would encourage you to keep those two types of money
separate, your short-term emergency money, and your longer-term investing money. Now, if you have longer-term investing money, that for whatever reason is just sitting on the sidelines and is not in the stock market, and is sitting in cash for some reason,
then when you feel comfortable, you can go ahead and get that invested. As I said, I’m recording this on April 7th,
and so the market has rebounded in the last few days, but it’s still not back to where it was in terms of its high, and I feel positive
we’re going to see more market volatility over the next few months. So you definitely may see more market downturn before we actually have a full recovery.
All right, so now I have some tips for you if you are already retired. So the first one is to think about cutting your spending.
If you’re retired and you’re living on your retirement portfolio, then this becomes a scary time because you’re watching your portfolio balance go down when the market is volatile, and you’re concerned because you’re drawing off of that portfolio to live on every month.
So if you can watch your spending and cut your spending down – it may just be temporarily,
it may just be for the next few months, it might be for a year – but if you can focus on that,
that’s the thing that you can control. So focus on your spending and just cutting back in that area.
Another thing you can do if you’re retired is to postpone large spending. So if you had big travel plans,
those kind of got curtailed on their own, you didn’t have to do anything about that. But if you had plans for home renovation or other large purchases,
perhaps you could just consider postponing those for a few weeks, or months, and just wait and see,
you know, what the lay of the land is in a few more months. We might be starting to see some market recovery,
or it may be several months more after that. Another tip for the retired folks would be to not worry about your portfolio.
So remember that back in 2008 and 2009, when the market was down, it was down for a lot of months,
was down for close to eight months. And so, that’s a long time. I mean, we’ve been having this market volatility now for about six weeks.
But back then it was about eight months, so we could still be in for a long haul of market volatility.
You’ll get used to it. Everybody does, eventually, kind of get into the groove, and that you get a little numb to it,
I think. But remember that, after that, eight months of being down in the middle of March of 2009, is when the bottom hit.
And then the recovery, the market was up in a very, it rebounded in a very short number of months.
So just remember that – that the market can go down really quickly, and it can also go up really quickly.
And so that’s why I’m always suggesting stop paying attention to it on a day to day basis. It’s just going to cause you a lot of stress.
Another tip for the retired is to consider rebalancing your portfolio. So, if your stock funds over the last several weeks have dropped in value, then this is the opportunity to –
because now your bond investments, or cash investments are higher – you could take some of those bonds or cash investments and buy into the stock market,
and that’s called rebalancing. You’re getting back to your target percentage in stocks and bonds. That’s the appropriate thing to do when we have a big market adjustment.
But if you’re a nervous Nellie, and that freaks you out, the idea of taking more of your hard earned money and sticking it in the stocks that continue to go down,
then just sit tight, just sit tight where you are and wait for things to rebound. What if you’re not retired,
but you’re close to retirement? So if you are nearing retirement, this is the time when you should be reevaluating whether or not you need to work for another year or two.
This is the worst possible scenario, when you’re just about to pull the trigger on retirement, and then the market goes into chaos, or the economy goes into chaos.
So if you have the flexibility, and need it, because if your situation, your financial situation, is a little tight, if it’s close,
maybe it will just make you feel better if you could just say “Okay, well, given the circumstances now, I’m going to postpone my retirement for six months or a year”. Because the longer you can hold off having to start tapping into that portfolio,
the better chance it will have to recover. All right, well, so what about tips for people who are still working?
Well, the first one, I would say, is to assess the stability of your company. So depending on the recession,
because we’ve had quite a few recessions in the history of the United States and the stock market here,
different types of businesses suffer in different recessions, so it’s not always the same types of businesses.
Sometimes it is, but it’s not always the same. So some businesses will suffer and others will weather the storm just fine through through a recession and a down market.
So your task is to evaluate the business for the company that you work for, and the industry that you work in, and see how the recession is likely to impact that.
And that way you can start to evaluate, ” What is the safety of my job?” You know, “Am I likely to potentially face a layoff,
or is work just going to be slow for the next period of time?” So figure that out. And then relatedly
you want to check your benefits. If you work for a major company, your company benefits might give you certain
continuation options. So you might be able to continue your health insurance through Cobra. You might be able to continue
some other insurance coverages. There are other things, like employment placement services that your company might offer.
So check out and see what your company offers, in the event that you were to be laid off, or furloughed, or
if you had your hours reduced, or whatnot. Another thing you can do is spend less and build your savings.
So, this is sort of what I was saying before about retired people. This is the time, if your money situation is tight, or if your income has just been reduced or eliminated,
then you need to start really taking a look at your budget and looking at ways to spend less. And start piling up a little bit of cash if you can,
because we don’t know how much longer the crisis, the health crisis, is going to be going on,
and we don’t know how long the economy will stay in recession. So if you can start stockpiling a little bit of savings cushion, if you don’t already have one, and spending less. So, you’re just sort of pulling back a little bit and saying “Okay,
we have to cut back and we have to, you know, kind of reassess things that we’re spending our money on.”
So that’s certainly where the Starks family is, our income is going to be down now for some period of time,
and so we’re finding ways to save money. Alright, you also want to scan for some opportunities.
So if your job is in jeopardy, or you’re not sure, or if you’re already out of work due to the recession,
then watch for job opportunities that are cropping up is a result of the crisis. So I have found,
you know, reports about delivery companies, and companies that provide essential services, there are places that are actually hiring because they need extra workers because of
the rapid increase in demand that they’ve had for their services. So it may not be your chosen career,
but it may be something that gets you over the hurdle of being out of work and not having income for some period of time.
And then also, just like the folks in retirement, consider rebalancing your portfolio. So, your time horizon is probably longer cause you’ve not already retired,
but you should also consider rebalancing. And even if you are nervous, I would encourage you to look at the opportunities to go ahead and buy into the stock side with your bond, or cash, or fixed income holdings that are a little higher now because of the downturn of stocks. And rebalance back into stocks
because then when the stock market recovers, you’re going to have bought in more shares, and so you’ll benefit from that recovery.
But always remember that investing is for the long term. So this downturn that we’re having now will eventually end.
This economic cycle will continue to turn. We don’t know the timing, but we know that what goes down, eventually goes up, and what goes up, eventually goes down.
So we know that that happens. We know that it’s a cycle. So to sum up here,
I think kind of across all the cases, whether you’re retired or not, I really encourage you to try to maintain a positive attitude.
So no one benefits from being panicked and negative all the time and worrying, worrying, worrying. So instead, stay focused on what’s good in your life right now and what you can feel grateful for right now and avoid dwelling on all the negativity that you could possibly be dwelling on now. Because there’s lots of negative news out there.
But remember that we’re all in this together, and everybody seems to be pulling together and trying to help each other.
And those are all good things. So let’s try to maintain a positive attitude throughout this. Okay, so what about you?
How are you handling the stress of these days that we’re having right now? You can email me at email@example.com.
I’d love to hear from you. You’re also welcome, if you’re on Facebook to join our free community,
the SimpleMoney Community, you can share your thoughts there. So that’s it for today. We’ll see you same time next week.
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