News about the recession, layoffs, salary cuts, and the uncertain financial situation is certainly a cause of great stress to most people. For those who until recently were very comfortably off, worries about how to handle day-to-day living as well as long-term financial commitments could be overwhelming upon hearing such news. In the current economic situation, the fear of unemployment is also very real. With so much emphasis on the financial crisis, it is difficult to avoid feelings of anxiety and distress. 

Common Reactions on Facing a Financial Crisis 

Individuals could react to the situation in a variety of ways depending on the degree to which they are personally affected. The impact could be felt in many areas of one's life: 
 
- At WORK, it may be hard to maintain productivity. There could be a tendency not to give full commitment to the work because one is preoccupied with possible job loss and wondering whether other options should be checked out. At the same time, there may be additional workload and pressure to prove oneself. Whether or not one's job is directly affected, there may be anxiety about possible changes in the future. 
 
- On the PERSONAL front, individuals and families may struggle to cope with a reduced budget. Difficult decisions may have to be made regarding purchases, investments, and housing; even marriage plans may have to be deferred. EMIs, school fees, loans, and credit card dues - all need to be paid on an income that may be less than anticipated. It is not easy to explain to families that they can no longer afford the same holidays, clothing, or schools. Disagreements related to finance may affect marital and other relationships. 
 
- PHYSICAL HEALTH may also be affected, with anxiety reactions, insomnia, headaches, backache, skin, and digestive problems. Some individuals may resort to excessive use of alcohol or smoking as a way of escape, which in turn could lead to further problems. 

Coping Strategies 

These difficult times are likely to stay for a while. Instead of giving in to feelings of panic or denying the magnitude of the problem, one needs to face the situation squarely and take steps to get one's life under control. Experts recommend several steps that could be helpful and warn against others that are actually counter productive. Let's look at some of these. 

 
Avoid... 
 
- Don't turn to substance abuse. Turning to alcohol, drugs or excessive smoking are some of the ways in which individuals could try to escape their problems. This type of "solution" is only going to make matters worse. Drug addiction or alcoholism will leave the individual in no shape to recover financially when things do improve. 
 
- Don't take it out on loved ones. During times of stress, there is often increased irritability and frustration, and some individuals may resort to physical abuse of their partners or children as a means of coping. This of course is unacceptable and anyone who feels the urge to hurt their partner should seek help from a counsellor to manage their anger immediately. 
 
- Don't turn inward. Another possible reaction is to ‘clam up' and withdraw from others. By doing this, one is shutting off from people who want to help as well as from potential solutions to the problems. 
 
- Don't make sudden financial moves based on fear or stress. Proceed with caution and get expert advice before making impulsive decisions, such as selling your home, borrowing from your provident fund, or changing investment options in your retirement savings plan. Avoid too much exposure to news about the economy. If this makes you worry, limit how much financial news you read, listen to, or watch. 

Do... 
 
- Stay positive. Those who maintain a positive mental attitude through tough financial times are the ones who bounce back the quickest. Try to recognize and appreciate all the positive things in your life. Focus on relationships with your friends and family, and your emotional and physical well-being. This will put things in a proper perspective and help you get through each day.  
 
- Focus on what you can control. You cannot control the stock market or the economy, but you can control certain aspects of your personal finances. Remember that even in the past there have been financial highs and lows. The best way to get through the lows is to manage your money wisely and find ways to cope with uncertainty. 
 
- Get financial counselling. Contact a financial expert (e.g., your chartered accountant) who can give you short-term solutions for your current financial problems without losing sight of your long-term financial goals so you're not back in the same position a year from now. Learn to budget and use money wisely. The articles on our website on Fiscal Fitness and Why you need to save could help you with this. You could also find ways to budget each week, analyze your spendings and figure out where you can cut back a little to save even a small amount of money.  
 
- Learn techniques to cope with anxiety and stress. Try relaxation and deep-breathing exercises, increase your physical activity and sleep, and try to be involved with some leisure activities. 
 
- Upgrade your skills. This is a good time to carry out your plans to study further. This would not only serve to distract you from brooding over the crisis, but more importantly, it can be a great help in improving your prospects when the recession is over. 
 
- Volunteer. Studies have shown that helping others can improve the helpers' own well-being. Getting involved with others can be stress relieving as it takes the focus off us. Volunteering makes people happier and more confident besides allowing them to learn a new skill and network with people. It could help keep things in perspective, especially when helping those less fortunate than ourselves; it reaffirms our self-worth and gives us hope. 
 
- Live one day at a time. Making a conscious effort to focus on the "here and now" rather than thinking about the future can help calm fears. 
 
- Be a rock for your family. You will need to set the tone for everyone in the family. By staying positive and being there to calmly address the concerns of family members, you can help everyone get through these stressful times without emotional downturns. The result will be a stronger family bond that serves everyone, both in good times and bad. 
 
- Manage your emotions. When facing financial difficulty, it's easy to panic and not think through decisions. Another common reaction is denial; pretending that the problem does not exist will not make your financial issues and stress go away. It's important to be aware of and manage your emotions so that you can make informed choices. 

Facing a financial crisis can indeed be a daunting prospect. However, by following these tips, you and your family can surely get through it! 

If you would like to discuss this further or need some help or support in this or any other area, our counsellors would be happy to help.