Rachel, a normally level-headed 32-year-old executive at a large NYC consulting firm, suddenly feels short of breath when she picks up a newspaper or skims news sites online. With a master’s degree and a rapidly-advancing career, she’s used to pressure and deadlines, but between watching the debt ceiling debacle and seeing her 401(k) shrink before her eyes, she’s feeling panicked.
Whether you’re feeling like Rachel—or you’re just trying to make sense of the news headlines lately—you don’t need to be overwhelmed. Here are some simple steps to help you feel in control of your finances and keep your cool through market turmoil.
1. Check In
I’m an independent financial planner. Most of the calls and emails I’ve received during these past few weeks have been from clients who just needed to touch base with another human being. They felt better immediately after hearing someone else’s thoughts on the markets and how to react. If the market is making you feel stressed, turn off the news and talk to a financial professional or trusted friend about small steps you can take—or just to reassure yourself that you’re not the only one who’s affected.
2. Organize Your Statements
Do you have multiple accounts, maybe at a couple different banks? Have you switched jobs and left lingering 401(k)s with a previous employer? Not knowing where all your money is can lead to a panic—and it sure won’t be soothed by the staggering number of statements you’re getting each month. One easy way to combat this disorganization is to register with an online budget and account aggregate site like Mint, Manilla, or Pageonce to see all of your statements on one page. (Your bank or mutual fund company may offer similar services.) Then, when the market starts to stress you out, you can see all of your assets in one place (and hopefully realize you have more than you thought you did!)
3. Simplify Your Banking
Once you’ve organized and combined your statements, do the same for your banking! Consolidate your accounts and 401(k)s in just one or two financial institutions. Choose a bank that won’t charge you fees and a no-load mutual fund company (one that won’t take a cut of your investments upfront). Fewer envelopes and electronic statements every month will reduce your anxiety every time you check your mailbox or email.
4. Keep Buying
If you’re actively investing, keep in mind the common investment advice to buy at the “low.” Investment guru Warren Buffett recently told Fortune Magazine, “The lower things go, the more I buy.” Personally, I advise buying investments yourself, going through no-load mutual fund companies like Vanguard and Fidelity. By pulling the trigger on the "buy" button, you physically involve yourself in the purchase process. If that thought makes you nervous, invest less than you otherwise would have so that if the market takes another dive, you haven’t risked too much. And if it goes higher again, you’ll have taken advantage of a bottom market.
5. Sleep Soundly
Financial worries are the biggest reason women have trouble sleeping. Nearly one in three women says she can’t sleep because of money woes, according to a recent study by Manilla. But getting enough sleep helps you manage stress and think more clearly. So, hit the sack! And if you’ve followed the steps above, you should have no trouble drifting off.
Whether you’re dabbling in investing or you’ve been avoiding balancing your checkbook at all costs, personal finance expert Galia Gichon will help you confidently take control of your money. She’ll share her practical (and inspiring) tips for financial empowerment with us in her column, "Simply Money," which runs bi-weekly on Mondays.
Photo courtesy of Mike McCune.