Living in Fear and Making Financial Decisions Based on Your Emotions

Living in Fear and Making Financial Decisions Based on Your EmotionsThe current situation in this country is causing a lot of fear and anxiety among people. People are fearful of losing their job or getting sick. In either case, if they cannot work, they won’t have money to pay their bills. Lots of people are living in fear because of these things and making bad financial decisions.

Some people are fearful of losing their retirement savings. The stock market was down 30%, and this causes people to worry and even panic. When people are fearful and panicking, they make some very bad decisions. Never make financial decisions based on your emotions.

Fear of Losing a Job

I have read that 1 out of 4 US workers have been let go from their job or furloughed as of this writing. The unemployment rate may be greater than 30% when this is over. Losing a job is a reason to be concerned for these people.

Some people who work in fields that will not lose their jobs (e.g. health care workers) are still fearful of losing them. This fear is not based on facts but on their emotions. It does you no good living in fear like this. If you have a real concern about losing your job in the next six months, then you need to plan for that. Otherwise, continue your financial plan and build wealth.

Retirement Accounts Losing Value

When your retirement account loses 30% of its value, it’s concerning. Always remember that markets go up over time. This is not the time to cash out your investments just because you are spooked by the volatile markets. Hopefully you are investing for the long-term. Markets go up over time, so do not cash out because of fear. Talk to an investment advisor or a financial planner if you are retired and have some concerns.

If you are retired, instead of being fearful about having enough money to last you through retirement, see if there is part-time work that you can do. Maybe there isn’t anything right now, but maybe you can find something over this next year. Be flexible with your retirement and you will be just fine.

Fear of Getting Sick

World Health Organization (WHO) chief Tedros Adhanom Ghebreyesus said in February that using the word “pandemic” can cause fear. He said, “Using the word ‘pandemic’ may also signal that we can no longer contain the virus, which is not true.” Whether you get sick or not, just hearing that word can cause you to be afraid. That’s unjustified fear.

Now, I am no doctor, and I am not downplaying the situation, but there is no need to live in fear of getting sick. Not too many of us in the US have a fear of a heart attack or other health issues that come from being overweight, or we would do something about it and eat right and exercise. Why live your life in fear of contracting this virus if you aren’t concerned of other health problems from the way you have been living your life? Living in fear and being stressed can cause health issues on its own.

I am all for flattening the curve based on what I have read about our hospitals not being able to handle the situation if we did nothing. There is a concern for my wife since she is pregnant and being pregnant means her immune system is weakened or at least in flux. We wash our hands a little more than we used to, but when our church resumes having Sunday service again, we will venture out of the house and attend like we always have. When the city opens the parks, we will take our children to the parks. We will take what we consider normal precautions, but we won’t live our lives in fear.

Financial Decisions Based on Your Emotions

Some of your fears might be justified based on your situation. If you just lost your job and cannot make ends meet for your family, it’s a scary time. There are things you can do. You still don’t panic and live in fear because this can cause you to make bad financial decisions. When things around you change, now is a good time to change as well. Maybe there’s a skill you can learn while you are out of work.

Don’t start saving your money and holding onto your debt when your job is safe. Don’t panic sell your investments. Stop making emotional choices with your finances. Living in fear is not healthy for you or your finances. Living in fear won’t fix your situation.


Let’s not be afraid, but let’s use this situation as a wake-up call. Start budgeting and learning how to budget. Increase your skills so that you can increase your income. Take care of your health. Quit holding onto your debt and pay it off. Save a 3-6 months emergency fund and build wealth so that you can weather the next storm.


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