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Rising gas and food prices, a struggling economy, real estate woes - it's pretty easy to get yourself all revved up on stress in today's unstable world, only to feel like you're just spinning your wheels. Sure, anxiety and skepticism are an understandable response, but they don't do much to remedy the situation. Instead, staying calm and moving forward, even if you have to do it slowly, is the way to eventually win the race.
"There's no question that our economy is facing headwinds from several directions, but it's important to remember that the economy moves in cycles just like the seasons of the year - although with less predictable timing," says Karin Maloney Stifler, CFP, president of True Wealth Advisors, LLC, Hudson, Ohio, and a member of the National Board of Directors for the Financial Planning Association. "However dire this current 'cold, hard' winter seems, we can take comfort and confidence from the fact that the markets have always rebounded just like spring always follows winter."
But in addition to striving for a positive attitude, it's also important to take solid, practical steps toward making your own position within a precarious economy as stable as you can. While it may feel counter-intuitive, Stifler's number one piece of advice for good personal financial health is to keep your money in the market. She compares it to the weight loss game - if you're overweight, starving yourself is not the way back to a healthy weight.
"Instead, you need to adopt healthy habits, like a balanced diet and regular exercise, or, in financial terms, a diversified investment strategy and disciplined savings and management practices," Stifler says. "This may not be a quick fix, but is more likely to bring lasting benefits."
Stifler's five "healthy habits" for achieving financial security even when times are tough, include:
1. Keep money in perspective. One of the first steps in "managing money" is to understand your relationship with it (which starts with your money roots during your youth) and how your feelings and experiences with money impact your behaviors and decisions. Your relationship with money and your "total well being" will start to improve once you accept that your money issues are less about how much you have or don't have, and more about what you choose to do with what you have and why, Stifler says.
2. Focus on your investment portfolio. Assess whether you have the right asset mix for your investment goals and time horizon. If you are properly diversified, chances are your portfolio will not decline as much as the stock market, Stifler says. But above all, try not to liquidate your retirement assets prematurely to raise cash.
3. Keep your home. If you don't have to move, don't. "Home values, like stocks, moves in cycles," Stifler says. "Remember that first and foremost, a home is a roof over your head, not an investment."
4. Don't scrimp on health insurance. Keep the best coverage you can afford because you never know what might happen and just one uninsured visit to the hospital could be financially disastrous for years to come.
5. Make an overall financial plan. A comprehensive plan, like a head-to-toe medical check-up, is the best way to ensure that you're making the most of your financial resources, says Stifler. If you don't have a plan and want expert help, you can find a Certified Financial Planner at FPAForFinancialPlanning.org.
And if all this sounds appealing, but you're still stuck on the maintaining a positive attitude part, you might also want to consider investing your resources in a life coach.
According to psychologist and master certified life coach, Dr. Patrick Williams, founder and CEO of the Institute for Life Coach Training, Palm Coast, Fla., the goal of life coaching is to teach people how to focus on their strengths in the present, even as they gain additional skills for facing the future. Unlike a counselor, a life coach only gets the Cliff Notes version of your background, and then quickly shifts the focus to what you want for your future, broken down into the next 30 days, six months and two years. The goal is long term objectives with short term doable plans.
"A life coach will help you determine what's realistic with your resources (including money, time and friends) and what's a pipe dream," Williams says. "You gain control of a design for the future so that you don't feel so oppressed in a crisis."
A lot of coaches give a free 30 minute session so consider trying it out, or get started by taking the University of Pennsylvania Positive Psychology Center's Signature Strengths Questionnaire, at AuthenticHappiness.org. Feeling just a little less frazzled is as easy as getting online.
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