During this global pandemic, the herd effect has been in full force causing a lot of financial anxiety. In a herd of sheep, if they hear something scary, they panic and run away. Ultimately, they could jump off a cliff, and they would all go together. Carrie Rattle, a financial counselor and CEO of Behavioral Cents, discerned this herd effect in how people are dealing with their money now. But life is mind over money, and the fear is in your head. The amygdala in the brain overrides rationality when you’re afraid. Rattle chats with Bold TV about how to have stable mental health in times like these and how to override financial fear.
How to Break Away From the Herd Effect
When you realize fear is making you irrational, there are three things you can do to calm down. First, have compassion for yourself. It’s easy to live in the past. (“I should not have taken that vacation. I could have started an emergency fund. I would not have bought that house.”) Recognize that you’re standing on your past. You can’t change it. But your future is above. You’re wiser now, so figure out how to move forward with the knowledge you have. Second, practice gratitude. Rewire your brain by thinking positively. Third, do something kind for someone every day. It could be as simple as calling them. The point of all these rituals is to extract yourself from fear. Once you get to a better place, you can think clearly and live your life!
The New Normal to Ease Your Financial Anxiety
Once your mind is in a better place, you need to think about money. Money can be scary to think about, but life will continue changing. You should be prepared. Think of the positive things that come from your quarantined life. You’re not paying for transportation. You’re not eating out as much. You’re not paying for concerts or sporting events or other live events. Look at what you’re not spending. Then, take control of your money. How can you budget differently? Could you finally start that emergency fund? How will your finances shift to a new normal? For more financial advice, check out Rattle’s resources on Behavioral Cents!