How to Handle Financial Stress in 2023

I was saddened, but not terribly surprised, to hear that just one in three adults recently surveyed by New York Life say they are hopeful about their finances.

If you’re in the other two-thirds who are battling some level of money stress, I want you to stand in this truth: you deserve better, and you can make it better.

I don’t have some magical powers to transform your financial life in a snap, but I know how to make you more hopeful starting today.

Know that you are a warrior.

Reducing your financial stress starts with reminding yourself that you are strong, you are capable, and you have what it takes to build a more secure future. That’s not me being a cheerleader. I believe with every ounce of my being that we all have it within us to be the ultimate caregiver who nurtures our own well-being, so we are happier, which also will help us better care for those in our lives who rely on us.

Eyes forward.

You can’t rewrite the past. You can’t undo the past. But you sure have 100% control over how you navigate the future. For example, you can spend your energy beating yourself up over unpaid credit card bills. Or you can take a deep breath and decide today is the day you start making financial decisions that will enable you to reduce your credit card debt. You have the power to write a better script going forward. Don’t ever lose sight of that.

Focus on needs to battle inflation.

The biggest financial stress cited in the survey was worry about rising costs. That’s understandable after the spike in the price of just about everything in 2022. Some good news is that the rate of inflation is coming down from its peak. It’s still higher than the 3% or so that is considered “normal” but it’s encouraging it is not racing ahead at such a fast clip.

Of course, any inflation makes it harder to cover your essential living costs. I hope you are laser-focused on being a shopping ninja. Having a list when grocery shopping can help avoid impulse buys. I also want you to stop before agreeing to any buy-now, pay-later offer. I think it is a too-tempting gimmick that gets you to buy something you can’t really afford, or kid yourself that it’s not really that expensive. My challenge is to ask yourself at checkout: “If I had to pay 100% of the cost right now, rather than just 25%, would I still buy it? Could I buy it without it becoming unpaid credit card debt?” If either answer is no, that’s a sign you’re about to make a costly mistake.

Build recession protection.

The second biggest financial stress reported in the survey was the concern that we could have a recession in 2023.

On some level I was pleased to see that so many people have this on their radar. It is indeed a possibility in 2023.

The biggest risk in a recession is a job layoff. There is no better stress reducer than to have an emergency savings fund. Don’t worry about not being able to save a lot in a hurry. I want you to push yourself to save as much as you can, but I also want to be clear that consistently saving something each week, or each month, is a big win. When you commit to saving you are doing what you can right now to help you in the future.

But the key is to push yourself to save more. When you cut out wants and spend the least amount on needs, I think you will be pleasantly surprised by how much money you might be able to redirect into savings.

And think hard about what you might be able to do to boost your job security. Yes, management has the upper hand. If a decision is to slash an entire group or pull the plug on a specific project, there’s nothing you can do to save your job. But often what happens in a recession is that managers are tasked with deciding who among their direct reports to let go. My challenge to you is to make yourself the last person your manager would want to let go. Even if you do end up being laid off, you know that manager will likely give you a glowing recommendation for your next chapter.