Sunnu Rebecca Choi/For NPR
The tens of thousands of federal workers who have been cut from their jobs are not the only ones dealing with financial uncertainty. With people afraid to look at their retirement accounts and others fretting about a possible recession and layoffs — fear around our individual and collective financial future can feel overwhelming.
There’s no denying having financial reserves helps people get through financial instability, but some research suggests there are other factors that matter as much — or in some cases more — when it comes to people’s physical and mental health.
The way people think about their financial circumstances makes a significant difference in how well they weather the situation, says Jeffrey Anvari-Clark, a professor of social work at the University of North Dakota. He studies the way financial instability impacts people.
A study he published in 2023 showed that how a person felt about a decline in income mattered to their emotional well-being 20 times more than the actual financial change itself.
“ It was the perception that — was it a catastrophe or was it a minor thing?” says Anvari-Clark, describing the way that people in his research approached the problem of financial insecurity. He says the narratives people told themselves about money “played a much bigger role in determining how a person was feeling about their financial health,” than their actual financial reserves.
People who can experience a financial setback as temporary, he says, may be able to remain relatively calm and move through it, while some might experience the same setback as a disaster — one that triggers intense stress that can spiral into serious health problems, like depression, substance abuse, high-blood pressure and heart problems.
This is not to suggest that money doesn’t matter, Anvari-Clark says. If people can’t pay the mortgage or get food on the table, that’s a crisis. But he says his research shows that how people deal with that crisis can make things better — or worse.
“ Money often is an emotional problem presenting itself as a thinking problem,” says Amanda Clayman, a therapist who specializes in helping people manage financial distress.
Her clients often come to her feeling exhausted or paralyzed — not just from job loss, but from dealing with all kinds of financial uncertainty.
Reigning in these feelings, says Clayman, requires that people take steps to channel their energy in a productive direction after a financial setback.
After a job loss, grieve then construct a new identity
One of the factors that keeps people from moving on after a job loss is the grief they can feel for the identity they built around the job, says Anvari-Clark.
Recognizing and processing this grief is important, he says.
“ People who didn’t know how to handle that loss of identity,” struggled to move on after job loss, he says. “That’s what made it perhaps an even bigger catastrophe than just simply having a reduction in income.”
That said, it’s not necessarily an easy process.
“The work and the mission is something that I’m really mourning,” says one federal worker, Michelle, who was fired from her job working to prevent child sex trafficking at the Centers for Disease Control and Prevention. Michelle asked to use only her middle name for fear of jeopardizing the severance pay she is still receiving from CDC.
Given that her whole team was cut, she worried no one would continue the work they were doing.
“I’m heartbroken for what this means for our country and, and the safety of the people in it,” she says.
Still, she’s beginning to think about work she could do in other countries, at a child advocacy center, or in the field of sex education.
“ I’ve been trying to think of paths that still feel in service of the larger goal of public service,” she says.
Grief can be necessary in situations other than job loss. Financial therapist Amanda Clay takes an example from her own life.
“ I have a kid going to college this fall and we have been growing her 529 for years.” Now that the markets are so volatile, says Clayman, “We’ve just watched a big chunk of her savings disappear.”
Clayman says she’s trying to “grieve the hope of what our financial position was going to be.” Experiencing and processing the resentment and the feeling that “I did everything right,” she says is painful, but she believes it’s the most constructive step she can take in order to move on and embrace the new financial reality in which she finds herself.
Pick up a side hustle
One thing that can help ameliorate job loss specifically is finding new ways to use existing skills through things like side hustles or volunteering, says Anvari Clark. Even if the jobs don’t pay, these kinds of activities can help people find new paths forward, he says. They help give people purpose, and allow people to eventually reinvent themselves.
Michelle, who was laid off from the CDC, has been working on several side hustles, teaching a class at a university and another related to standardized testing.
“It has been helpful to at least feel like I am doing something to earn money,” she says “I have always been someone who has kind of put my head down and worked really hard.”
As difficult as this process can be, Anvari-Clark says, “getting out into the community will put people back onto the job track so much faster than if they’re simply wallowing at home.”
He says other positive coping mechanisms — when facing job loss specifically — can include reaching out to professional connections to ask about potential opportunities.
“ The beauty of networking is that you find out about those opportunities before perhaps they’ve even been made public,” he says. “At the same time, you definitely do want to send out your application, brush up on your interviewing skills, and brush up the resume.”
Grow your ability to embrace uncertainty
“ Our hunter gatherer ancestors were not existentialists,” says Clayman. People are designed, when they sense a threat, to “identify the things that we can do that are going to help the threat go away.” Lacking the ability to solve the problem with concrete solutions that are out of our control — landing a new job, restoring the markets to previous levels — people often resort to unhealthy habits like collapsing into despair or even self destructive behaviors like drinking or bingeing on food and media.
“What we’re looking for is emotional relief,” says Clayman “but we don’t know that.”
Learning to channel these fight or flight instincts into productive habits, says Clayman, often means acquiring new skill sets.
She suggests when facing financial uncertainty to first carve out a discrete time period to focus on it, such as one month or three months, rather than getting overwhelmed about things that are often years away such as retirement savings. Give yourself permission not to worry about things in the future, she says, and try to keep your eye trained on the immediate present.
Secondly, Clayman suggests embarking on a period of inquiry.
“The gathering information phase is actually a really critical step, because it requires us to self-regulate,” says Clayman.
For people dealing with debt or sudden loss of income for example, she says, make a list of all financial resources available in this short time period, and then set goals around savings or outcomes.
In the case of job loss, it could also mean making an assessment of all the potential fields in which one might find work, and then applying to a certain number of jobs in that time period.
Experts stress that these behaviors help people to become more flexible and nimble at handling uncertainty.
Self care matters
For people dealing with economic and financial tsunamis such as job loss, it’s also important to focus on day-to-day health, says Anvari Clark. Things like getting enough sleep, exercising and maintaining social connections all make a difference in improving one’s outlook – which can in turn make a significant difference in weathering financial uncertainty or landing a new job.
“This is a time where we don’t necessarily have control over the external environment,” says Clayman. “So we can exercise control on things like making sure that you are keeping up social contacts, eating as nutritionally as you can — treating your own body as a precious resource that needs to be managed,” as opposed to a “dumping ground for emotional stress.”
In the best case scenario, says Clayman, people can learn new skills and become better versions of themselves after financial setbacks.
This is often not advice clients want to hear when they’re in distress. “I’ve had many clients vent their anger at me” for making this suggestion, she says.
But she says she’s also seen people who stop thinking of themselves as a victim or someone who made poor choices. People can learn to think of themselves as “heroically dealing with a challenge and calling out to my strongest, best self.”
Realizing these better selves, she says, can be empowering. “ Financial crisis is often the thing that kind of opens the door for us to look at money in a different way.”
Edited by Jane Greenhalgh
