5 Smart Moves to Make in Times of Financial Anxiety

Nearly everyone experiences financial anxiety at some point. Here's how to control it so it doesn't control you.

If you turn on the nightly news or read enough news articles, you may feel as though the sky is falling. Spoiler alert: Mankind has always believed the sky is falling. When external forces push at you, it's natural to feel anxious. The problem with anxiety, though, is that it can muddle your thoughts. Here, we're covering five smart moves you can make regarding your finances, even when your anxious mind tries to talk you into doing something else.

1. Take a beat

We humans tend to make truly awful decisions in times of stress. Ask yourself the following question when stress arrives: "Am I about to do something rash because I'm anxious?"

Sometimes, the hardest thing to do is nothing. Say you have faithfully contributed to your retirement account for years, and for as long as you can remember, the account balance climbed. The economy hits a rough patch, and your account suddenly loses thousands of dollars in value.

It would be rash to sell everything, tuck your money into a savings account, and wait until the market appears "healthy" again.

Not only would that be rash, but it could cost you big. Investing in the stock market is like flying a crop duster. You feel every dip, twist, and turn. If you focus on the movement, you begin to believe that it will surely crash each time the plane dips.

That's not the case. Investment values rise and fall regularly. Watching every change can make you believe that you need to do something. Reacting before you've had time to investigate is likely to be costly.

2. Allow your head to overrule your heart

None of us likes peeking in on our portfolio only to find a sea of red indicating recent losses. If we process it emotionally, we're going to make mistakes. Here's what to remember:

• When the U.S. finds itself in a bear market (a decline of 20% or more), it doesn't necessarily mean the country is in a recession. It means the stock market is acting like it always does -- the economic equivalent of a roller coaster, with tons of ups and downs.
• Even if we do enter a recession (another naturally occurring event), the S&P 500 is likely to experience a dramatic rebound. Historically, in a year following a recession, the S&P 500 has been up over 15%.

3. Avoid knee-jerk reactions

Could it take you a few years to recoup money lost during a rough patch? Absolutely. But while your investments are in a ditch, staying the course can profit you. That's because you can pick up stocks at a bargain price if you just keep investing.

If you can't stomach staying in entirely, slowly wade back in until you feel more

comfortable. Based on the historical highs and lows of the market, you would probably end up ahead by buying stocks while prices are low. If you can't do it, though, make it a point to invest as much as you can handle, and diversify. That is, make sure your investments are spread out, that your portfolio includes different asset classes and sectors. Like your mom might have said a time or two, "Don't put all your eggs in one basket."

Without sounding Pollyanna about this, losing money in the market is one way to figure out how diversified you should be, the asset classes and sectors you're most comfortable buying, and what your risk tolerance is.

Consider any investment you make long-term, and don't allow the natural rhythm of highs and lows to knock you off course.

4. Be careful where you get your news

Tales of impending doom from a pessimistic uncle or an Eeyore-like coworker can get under your skin, even if you don't notice. Eventually, you absorb their negativity. That's not to say you should ignore signs of trouble ahead, but make sure the source of your financial news is reputable and has a proven track record.

Another great question to ask yourself before responding to an anxiety-producing financial situation is, "Am I doing this out of fear?"

If fear is driving your behavior, it's time to take control by gaining knowledge. And nothing against the pessimistic uncle or Eeyore-like coworker, but they are unlikely to provide you with any legitimate advice (and Facebook posts don't count).

Calling a professional -- a financial planner who charges by the hour and does not receive a commission for the products they sell -- is an excellent place to start. After a single hour, you're likely to find that you're on a much better path than you imagined. Even if you have to tweak your financial plans, you'll probably leave the appointment knowing more than when you went in.

5. Take breaks for self-care

Focusing on one thing for too long is unhealthy. No matter what gets you financially anxious, make a plan, stick with it, and build in time to take care of yourself. For one person, that may mean more time to exercise. For another, it might be a phone call with a friend.

Financial anxiety is a normal part of life. It's not always investments that get us down. Sometimes it's job loss, an unexpected expense, divorce, or overwhelming debt. No matter what's keeping you up at night, take back control by learning as much as you can, creating a plan that makes sense to you, and knowing that you're doing everything in your power to move in the right direction and put money in the bank.