Tips to Help Manage Your Money During Hard Times

In times of financial hardship, it can be difficult to focus on savings goals. And understandably, many tend to dig into their existing savings, in hopes of offsetting a loss of income or a job. 

But at the same time, it can be even more critical to manage spending carefully and, if possible, continue to build up a buffer should another financial crisis occur.

“Often, we panic and start making decisions in a state of fear, temporarily losing the practical side of the brain that makes logical decisions—the thinking brain—that really needs to be front and center,” explains Deborah Price, founder and CEO of the Money Coaching Institute^†.

“Reacting emotionally can lead to counterproductive behavior, such as panicking and overspending, which can ultimately hurt your long-term savings goals.” There are ways to help safeguard against getting overwhelmed by emotions and impulsive habits.

Here are five ways to help manage money stress and keep you on track with your savings goals:

1. Address your stress.

Taking note of your emotional state and your physiological response can help you bring down your level of stress and make more thoughtful financial decisions.

“Find ways to self-care,” suggests Price, who recommends breathing techniques, exercise, and viewing an upbeat comedy as healthy ways to manage stress.

“The urge to act is basic, but we need to learn strategies to calm down and get back to a place of rational decisions.”   

2. Manage what is manageable.

It can be difficult not to catastrophize, but “the one thing that’s clear is that nobody really knows what the future will hold,” says Price, who suggests resisting decision paralysis by focusing on what you can do.

“We are inherently creative and capable of overcoming almost anything if we stay calm and simply ask ourselves, ‘what is the best way to help myself and my family right now and in the future?’”

Rather than let uncertainty lead to decision paralysis or impulsive decisions, identify proactive steps you can take—taking an online course, polishing up your resume—to position yourself financially for the future.  

3. Seek out savings.

Take time to conduct a budget reassessment. Look for opportunities to trim costs, such as subscriptions you can eliminate or making adjustments to your cable TV or cell phone plan.

Unsubscribing from text alerts and emails with tempting promotional offers can also help curb impulse buying.  

4. Be ready for your rebound.

Whether you’ve experienced being furloughed from a job, working reduced or fluctuating hours, or are living paycheck to paycheck, millions of Americans have had to adjust their finances and future savings strategies due to COVID-19^‡.

Awareness that the challenges you’re facing are both shared and temporary can help you weather them, notes Price, who advises setting and sticking to a routine.

“Creating a structure can help us be more resilient and recover from a setback faster,” says Price. “Get up and get dressed on a set schedule—imposing order in a time of chaos is empowering.” 

5. Look for the opportunity.

Change, even change stemming from a crisis, invariably brings opportunity for those who look.

“Whether you’ve struggled to find new work or just working remotely and spending less time commuting, this might be the perfect time to tackle passion projects or consider that career change you always wanted but weren’t sure how to make happen,” says Price.

“Do you have a talent or hobby that you can create a business around? Now is the time to figure out how to make those dreams happen.”