Gabriella Braddock and her husband Tyler are young entrepreneurs who spent the past three years building a music studio and recording business in their New Jersey hometown. For more information, see How We Make Money. We're not sure again if we're going to back to work in a matter of months or if it can take longer. Fifty-nine percent of survey respondents predict that it will take at least six months for the economy to return to normal, and another 13% expect that the normal we knew before the outbreak occurred will never return. Our guest, Dr. Brad Klontz, is a financial psychologist and a certified financial planner. Our numbers predicted it; we were consistently hitting our goals.”. Then I'd have to go live with my parents or my sibling. Then the COVID-19 pandemic derailed every financial plan they had in place for 2020. Note: Percentages may not total 100 due to rounding. 2008 may not be the right comparison. The coronavirus disease 2019 (COVID-19) pandemic may be stressful for people. Even for those people whose wallets have not been directly impacted, who are able to work from home and retain their same income, the anxiety can be just as present. It's like, depending on the degree to which your self-esteem and your self worth is built into your job or your role, for example, when that is gone, it creates a crisis for many people like how do I get this need to feel productive, this need to feel like I'm doing something good in the world, that my social needs met, my connection needs met? Welcome to Speaking of Psychology, the flagship podcast of the American Psychological Association that explores how the science of psychology affects everyday life. I would like to subscribe to the NextAdvisor newsletter. So we should all be buying right now? I guess you've got some good endorphins going up there in the brain that you're able to carry on and not focus on the negative, but I'm hearing that that's pretty much the bottom line of what it is that you are advising people right now, to look on the bright side, to hang on, and not to lose hope through all this. The 'anxiety and inspiration' of running a high-risk meat business during a pandemic — Maple Leaf CEO Michael McCain. I don't think it's it's rose-colored glasses, but I do think it's important to look for those opportunities. In addition to these options, 14% of total respondents chose “Other” and 30% chose “None of these.”. The coronavirus pandemic is global, and it's likely that we are only just beginning to see its economic impact, so what can we do to cope? Back in 2008, we did a study of financial planners during the last big recession. What are you hearing? Keep seeing your friends, keep your CV up to date, and try to keep paying the bills. Humanity has been faced with this type of thing. Brad: Do that worst-case scenario exercise, dive into the pain of everything bad that can happen. Brad: Mills holds a bachelor’s degree in biology from Barnard College and a master’s in journalism from New York University. We are an independent publisher. Ahead of the Nov. 3 U.S. presidential election, former Vice President Joe Biden leads President Donald Trump in national opinion polls. Just, for example, my son the other day was like, "Hey, can I help with the dishes?" I really can't go beyond that, but I hear it was the same one we had back in '87 and on and on, so this is built in it. It's not like you actually need a psychologist to tell you which stock to buy, that's not what a psychologist would do, and that's really not your issue. Many of these people are hourly or blue-collar workers, their jobs may never come back. Survey: Most Americans Are Feeling Anxious About Their Money. But New Jersey’s stay-at-home order forced the Braddocks to close their studio’s doors and move business to limited services they could offer virtually. In time, these symptoms can worsen and eventually contribute to more persistent anxiety or depression. Amanda Clayman, a licensed psychotherapist and financial wellness advocate for Prudential, says in a new video message that now is the time to cut yourself some slack. Kim: It depends on what your portfolio looks like, but almost certainly, this is great too, look back to 2008, and if you look back at charts on what happened in 2008, it took a huge hit, bounced around a little bit, and then it was just a steady path right on up, so it really depends on your frame of reference. Is that an accurate summary? Anxiety is a normal reaction to uncertainty and things that may harm us. Brad: And mental health disorders, including anxiety and depression, can worsen. The survey data shows that the number of Americans whose primary financial goal is continuing to pay for housing and basic necessities has jumped 11 percentage points, from 21% when reflecting on their priorities as of January 2020 to 32% in June. “There’s a level of uncertainty now, because we don’t know where the economy is headed,” Doe says. Nick Cosky is a Certified Financial Planner™ professional, and one of the owners of BDF LLC, an independent private wealth management firm in Chicago. “We have dealt with loss of income, taken on more debt, and used our savings to make our usual payments,” Gabriella, 25, says. Frankly, a lot of people back in 2008 had to do something like that. Even before the coronavirus struck, many of us were prone to do unwise things with our money. CNBC: How is the financial fallout from coronavirus pandemic affecting people's mental health? Save the MP3 file linked above to listen to it on your computer or mobile device. Nearly three in 10 Americans’ financial situation (29%) has been negatively impacted since the pandemic began. “This is all still happening,” Clayman says. Kim Mills: You've looked at concepts like overconfidence bias where people have too narrow a frame of reference, if they don't look at markets over the long term, which is what we're talking about, an anchoring bias. Kim: Kim: We’re also seeing the strengths and limitations in our system in being able to respond to collective problems.”. A great question. Some links on this page — clearly marked — may take you to a partner website and may result in us earning a referral commission. That's where our brain goes. And the advertised offers may be subject to additional terms and conditions of the advertiser. The other opportunity that's happening here too, is more and more telehealth opportunities are being presented. People worry about their own health and the health of their loved ones, both here and abroad. “Even if that’s not a worry today, the anxiety about that happening next month or the month after is just as profound as for someone who doesn’t have money now. Progress Notes I think that psychologists back in 2008, and this is anecdotal, I think maybe even for the first time as a profession, we really started to take seriously this whole idea of financial anxiety and people struggling with money, frankly, because most of our clients were struggling with that. For our listeners, if you have any comments or ideas you'd like to share about our podcast, send an email to The compensation we receive and other factors, such as your location, may impact what ads and links appear on our site, and how, where, and in what order ads and links appear. What do you wish you had done? One of the problems we have as human beings and when it comes to investing is it's called a narrow frame of reference. “Even though they’re in a position where everything is OK on paper, they don’t feel financially secure.”. We're wired to do the absolute wrong things, which are buy high and sell low. They were hit really hard, they lost a house, they had to do that, and it took them a few years to recover. And the advertised offers may be subject to additional terms and conditions of the advertiser. He died in his 90s, never put a dollar in the bank the rest of his life. So the team at Shine, in partnership with Mental Health America, have vetted and compiled a wealth of research-backed and helpful tools for you—articles, meditations, access to mental health experts, anxiety screenings, and more. Now, I will say this too, and the research on post-traumatic growth is very clear, there are all sorts of opportunities built into this, too. All information is presented without any warranty or guarantee to you. When it comes to financial decisions, however, those instincts are absolutely the wrong thing to do at every possible level. Are you worried about your financial future in the face of the COVID-19 pandemic? This is the premier interdisciplinary venue for emerging research in the role psychology plays in the design, use, and impact of new technology. Young baby boomers approaching retirement (ages 56–65) as well as members of Generation Z (the youngest adults, ranging from ages 18–23) are the age groups most likely to report their personal financial situation as negatively impacted (36% and 33%, respectively). But the sectors of the economy that were hit the hardest, such as entertainment and travel, are expected to recover much more slowly. Kim: And while lender assistance and relief programs have provided help in the short term, questions about long-term, sustainable solutions remain. First of all, the American Psychological Association Stress in America Survey consistently has shown since 2007 that money is one of the biggest sources of stress in the lives of Americans around three out of four, and when times are great. Sure, well, I think if you had an overconfidence bias, chances are it's shaken up a little bit, which is probably good for you. Think about on the other side of this looking back to who you are right now and what you're doing right now, and just try to build into that, how would you feel really good about how you went through this. It's called the worst-case scenario. He was so traumatized by losing his money. There was a significant indirect effect of job insecurity due to COVID-19 on anxiety symptoms through financial concern (b = 0.19, 95% CI [0.09, 0.33]). You're going to see a bunch of red lines, it looks like our entire life fell off a cliff. Thanks for having me. At NextAdvisor we’re firm believers in transparency and editorial independence. If you lost your job, then what would happen? My grandfather lost all of his money when he went to the bank one day, and all of a sudden, the money's not there. Helping people meet their financial and life goals is what drives him every day. He is also an associate professor of practice in financial psychology and behavioral finance at Creighton University in Omaha, Nebraska. Your next move: Sign up for our newsletter. You've been avoiding looking at it and now, all of a sudden, you have some stress related to your finances. I would say so, but I'm also not trying to diminish the fear and the anxiety. Now, you could use this experience to grow closer. That wider frame of reference really can help settle that your emotional brain, calm it down so you don't do the wrong thing. “Stress and anxiety in our financial lives has a direct impact on our physical and mental health,” Doe says. It's the combination. Kim: The Braddocks are among the more than half of all Americans feeling increased levels of anxiety regarding their personal financial situations in the months since the first confirmed cases of COVID-19 appeared in the U.S. . If you have any final advice or words you'd like to impart, please do. According to the survey, 21% of those who report an annual income of $30,000 or less are “very anxious” about their current financial situation, compared to an average 14% of those reporting higher income levels. This is going to be over, it's going to be over soon. Brad: You've done a lot of research into how people manage their money, the emotions that go into it and the psychological constructs that you've been describing. The survey was carried out online and meets rigorous quality standards. I also feel like there are other things happening right now and what you pay attention to gets bigger. Among Americans who say debt, lack of savings, loss of employment or income, saving for retirement, and additional childcare costs have caused anxiety following the pandemic, here’s how responses break down by generation: Note: Respondents could select up to three options. Surveys show a major increase in the number of U.S. adults who report symptoms of stress, anxiety and depression during the pandemic, compared with surveys before the pandemic. Lower-income respondents are also less likely than respondents in other income brackets to know where to turn for financial assistance or counseling (21% say “not confident at all” about where to get help, compared to a 12% average of other respondents). I don't feel like there's a ton of value in lingering there. Kim: Editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by our partners. “The reverberations to our society and our economy are going to be felt for a long time. 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