Ways to Deal With Financially Stressful Times

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Nobody likes to hear or deal with the kind of financial news and stock market woes (although Monday’s gains made people feel a little better, I’m sure) that are going on right now, but besides the presidential election, it is about all that is on the news and is the most popular topic of conversation these days. But ups and downs in the stock market, even wild swings similar to what we are seeing lately, do happen, and they often make us feel a little stressed out or uneasy about our financial future. Taking steps to identify and alleviate worries about our finances can go a long way to making this roller coaster ride a little more bearable.

Examine your goals- If you have a very long time horizon, which could be as short as 10 years, or longer, you really should not panic. You will not need the money for a long time, which should give the stock market a long time to RECOVER. Looking at a long-term goal over a short period of time is not the way to do it. Not to mention, if much of the damage has already been done, there is really nothing you can do about that.

Learn from this experience- Remember how this makes you feel. If you are having trouble sleeping because of a large drop in your 401k, but still have 30 years to retirement, you investment allocation may not match your risk tolerance. Going forward, you may want to put new investments in a lower risk category to match your asset allocation to your risk threshold.

Boost your cash savings- One thing the economic downturn brings to light is the fact that cash really is king. If you feel uncomfortable with the size of your emergency fund or what your cash reserves are, find ways to increase your available cash to make you feel a little more secure.

Make smart money moves- Now may be a good time to buy a CD, open a high interest savings account like ING Direct or HSBC, or pay down debt, if it makes you feel more comfortable than investing.

Remember the fundamentals of investing- I haven’t heard to many people saying “Buy Low and Sell High” lately. Although some people are certainly taking advantage of the reduction in price of the overall stock market, you might think more people would actually be excited at the buying opportunity that seems to here right now. If you have extra cash, you might want to consider it. (Although I am not recommending it for anyone in particular, as every one’s situation is different)

Focus on the present- Don’t worry too much about what is happening to money you are not planning on using for 30 years. Make sure you are taking care of things today, first. Focus on the present and make sure you have everything covered.

Plan for the future- Keep you savings and investments in perspective. By the same token, however, if you don’t feel you are saving enough for the type of retirement you want, take steps to correct the situation.

Are you feeling stressed out or uneasy due to the volatility in the stock market and problems with the financial sector? How are you dealing with all of the “bad news” we have been getting lately?