Building and Economic Battle Plan

Long ago, in a distant galaxy, psychologists made the distinction between reality anxiety and neurotic anxiety. Not to worry, this article is not intended to explore Freudian stage theories of how we handle our money. However, the distinction does raise an important point. While deep breathing exercises and stress management techniques will not put food on the table or restore your retirement account, a combination of stress management, coping skills, financial planning, and an action plan may be critical to survive the very real economic crisis we face.

Well before the mounting economic crisis of late 2008 and 2009, (and later the sequester of 2012, and political nonsense of the government shutdown in 2013, and more recently hyper-inflation and rising interest rates of 2023) the American Psychological Association’s 2007 survey of “Stress in America” indicated that stress related to money was significant and increasing. An American Psychological Association’s study indicated that by Sept. 2008, 80% of Americans reported the economy was a significant source of stress. Sara Martin (“Rolling with the Changes”, American Psychologist, Jan. 2009) notes that clinicians are now reporting they are seeing stress levels similar to post 9/11 levels. A follow up survey in 2010 demonstrated economic factors continue to rank high in parent's stress levels.

The impact of economic downturns is both immediate and long-term. Tori DeAngelis, in a January, 2009 American Psychologist article “Tools for Tough Times”, described studies of families who endured losses of farms during the crisis of the 1980. Families often entered a spiral of not being able to pay their bills, cutting back on essentials such as food, clothing, healthcare, and becoming displaced often needing to move in with relatives or relocate.

While studies note that doing without health care is often a consequence of losing employment or other financial crises, cutting back on routine and preventative health care and even medication may result in more expensive emergency procedures and intervention as well as serious or permanent health consequences.

Follow-up of the impacted families found results consistent with studies of other historical financial crises. This included adverse psychological adjustment, poorer academic achievement, and a negative impact on social adjustment. Studies of the Iowa farm families suggested that tighter-knit families which placed an emphasis on children’s and family member’s needs and who had good communication tended to fare better than others.

Not surprisingly, those where high levels of anger, irritability and conflict prevailed, fared worse. Having established roles in the community (such as church, school, and other organizations) also seemed to help reduce negative impact on the family and children.

In general, there is a higher risk of relapses of alcoholism, mood disorders, other psychiatric illness, heart attacks, other illness, and even injuries when there is high rate of stressful life events.

George Howe, Ph.D., a researcher who studies those who experience job loss, found that personality characteristics play a role in terms of who endures the most difficulties and stress. Individuals who do not have firm and supportive attachments and those who tend to internalize or blame themselves for their situation, have greater difficulties coping with job loss.

Warning Signs of Stress

The APA Stress in America survey suggested that women may be more aware of their stress and tend to express more fearfulness about the economy and finances than men. The survey found women are more prone than men to develop mood swings, spending sprees, headaches, sleep disorders, and appetite disturbances in response to stress. However, it is important to remember both sexes report high rates of stress related difficulties in the face of the current financial crisis. Men may be more likely to exhibit depression through irritability, anger, isolation, alcohol or drug use and even through compulsive sexual behaviors.

While many of these strategies have been repeated and common-sense, improving coping and the importance of minimizing the impact of stress is highlighted by American Psychological Association studies that found the negative psychological impact of 9/11 was still present for many people several years later.

Rany Weigel ( University of Wyoming Cooperative Extension Service) in “Coping with Financial Stress” recommends acting immediately if a person is laid off. Weigel notes a family needs to keep children involved, and needs to decide what is necessary and what can be done without.

While Weigel notes shock, disbelief and even withdrawal may be common initial reactions, Weigel cautions that taking action to limit the immediate loss of income is important.

Searching for inexpensive alternatives to expensive vacations such as local sights can help reconnect us with our state and local parks, communities, and provide some stress-relieving exercise and fresh air. Those in communities with University or public sponsored art or sports events can also find some inexpensive entertainment, thrills, arts, and culture while providing some needed distraction. Such events can expand horizons as well as provide important sense of unity for couples and families.

Employer Health Services: Many large employers offer free health screenings, diet and fitness programs, or even reduced or low cost bloodwork though their employee health departments. Taking advantage of these programs help reduce your overall healthcare costs as well as every-critical employer costs.