When the United States began its war with Iran, Merry Renduchintala’s first impulse was to “buy everything now,” before prices increased.
“I’m feeling panicked because I grew up really poor,” Ms. Renduchintala, 54, said. Her father died when she was young, leaving her family with a mountain of debt. Now, as headlines induce worry, Ms. Renduchintala, who works in communications for a Connecticut food bank, feels her old anxieties about money rising.
She isn’t alone. Roughly two-thirds of Americans feel stressed about money, and a March survey by the University of Michigan found that Americans’ overall confidence about their personal finances over the next year fell by 10 percent, partly because of the war.
With fluctuating oil prices and interest rates, and fears about wars and a recession, staying optimistic about your financial prospects isn’t easy.
One way to calm your financial anxieties is to focus on what you can control. Taking stock of your bank account with a “financial spring cleaning” timed to the season of renewal can help. This overhaul of your spending and savings helps you adjust your budget (if needed) so you can stay on track.
Ditch the Doomsday Mentality
Start by auditing your expenses. Experts suggest dividing items into necessities — like shelter, food, clothing and transportation — and nice-to-haves. Budgeting apps can help, though most charge subscription fees. For those who prefer a free option and don’t mind going old-school, spreadsheets work just as well.
Faith Strongheart, 52, a single mother of two in Los Angeles, recently reviewed her monthly spending. “There were a lot of things that I’d been doing out of convenience, like having auto subscriptions on Amazon for household supplies,” she said. Once she took note of what she actually needed and didn’t, cutting back was easy.
Although adjusting her budget in small ways has helped, it wasn’t enough to close the gap. Unemployed for nearly eight months, Ms. Strongheart, who works in the film industry, recently liquidated two I.R.A. accounts and her children’s college funds to cover mounting bills like rent and utilities. It was a “devastating” choice, she said, made after she had exhausted other options.
There is relief on the horizon, however. She snagged a production supervisor role on a new movie that she expects to start next week, and the payout from a small legal settlement will go toward rebuilding her savings. Longer term, Ms. Strongheart might return to school for a new career.
Financial volatility often incites overwhelming fears, which can impair rational decision making because of what experts call a “cognitive bandwidth tax.” It’s like “having a thousand tabs open on your computer,” said Chantel Chapman, a financial expert and the author of “The Trauma of Money.” And it can push you toward decisions that ultimately backfire. For example, you might decide to “live for today” and spend beyond your means or pull back on your retirement contributions.
Reactive choices, according to Ms. Chapman, are “stress responses” that arise when scary emotions take over. Remembering that feelings aren’t facts is a good place to start. Just this pause can create “psychological distance” in the brain, leaving you feeling calmer. This small shift can help you make “wise” choices that aren’t informed by “catastrophic thinking,” Ms. Chapman said.
Ms. Renduchintala can relate. With so much uncertainty in the world, her thoughts can volley between spending and saving. “Sometimes, I think, ‘Let’s take the money and go do something we deserve,’” she said. But she doesn’t let the impulse take over. Instead, Ms. Renduchintala makes “tiny tweaks” to her budget and puts more into savings.
Remember Your ‘Why’
Reassessing your financial goals — like buying a house or saving for retirement — can also help curb shortsighted thinking. These check-ins ensure that you stay on track as circumstances and needs change, too. Budgeting apps like YNAB and Monarch can help here, too — many automate transfers in the background so you can reach your goals faster.
Financial experts advise saving six months’ worth of expenses, but don’t be discouraged if that feels out of reach right now. Even if you “can only put a few dollars per month into savings, it’s important to keep doing it,” said Kate Bulger, a vice president of business development at Money Management International, a nonprofit credit counseling agency.
If you’ve mapped out your budget and trimmed the fat but still feel stressed, don’t fret. Give yourself permission to step back, Ms. Bulger said. “Sometimes taking a break from cable news, or however you’re getting your information, can be a really healthy thing, too.”
Ms. Bulger also recommends monitoring changes in your month-to-month spending. Doing so can help you feel more in control, even when it seems like the world is on fire. “Slow increases over time, and across a lot of different categories, can really add up for folks,” she said.
Make Strategic Adjustments
In times of crisis, experts recommend pulling back on discretionary spending through strategic cuts to your budget. Many streaming services and gyms, for example, offer the option to pause your monthly membership. This makes it a lot easier to pivot when you need to adjust your budget very quickly, said Bruce McClary, a spokesman for the National Foundation for Credit Counseling.
Cody Bortle, 24, a high school math teacher in Phoenix, feels the financial pinch. He recently spent $60 on gas for his car, up from $45 last month, and while he supplements his income with a cross-country coaching gig, he still lives paycheck to paycheck.
He’s been able to stretch his grocery budget with the help of his school’s food bank. “I’ve been getting food packages that have canned and boxed items, which has been incredible,” Mr. Bortle said. With the staples covered, his limited funds can now go toward fresh produce. He’s accustomed to such adjustments — for example, last year Mr. Bortle moved to central Phoenix, paying $100 a month more in rent, to reduce his commute to 10 minutes from 45. “I feel more comfortable living in an area where I’m really close to work, and I’m surrounded by my community members and my friends,” he said.
The key is to figure out your priorities.
Ms. Renduchintala and her family forgo their favorite $60 Vietnamese takeout when money is tight, but only after talking it through together. Getting everyone’s buy-in can help prevent resentment, she said. “We have to have that conversation upfront, so they’re actively choosing where we want to spend money.”
Address Your Debt
A weekly date night or a routine grocery run might not feel different now compared with a year ago, but the bill often is. Price increases, whether from typical inflation or because of tariffs or being at war, may tempt you to use your credit card more often.
“We hear about people who are using credit cards for all sorts of expenses that they would have otherwise used cash for,” Mr. McClary said.
Making judicious cuts can help your monthly budget, but there’s more to the equation. Financial resilience, or the ability to take a financial hit and recover, also comes from bolstering savings and reducing debt.
Ms. Bulger suggests starting with unsecured debt, like credit cards, which typically carries higher interest rates than secured debt like mortgages or auto loans.
Paying down credit card debt can quickly improve your credit score, increasing your access to credit and personal loans should you need them. “That gives people more flexibility with their budget during times of rapid change,” Ms. Bulger explained.
And if you’re struggling to pay off debt, let your creditors know sooner rather than later, Mr. McClary said. Your creditor may allow you to skip a payment or two without incurring a late fee as you weather the financial setback.
Temporarily switching to minimum payments is OK, too, according to Mr. McClary. “Do what you can to protect your credit rating while at the same time taking care of the necessities,” he said. It’s also worth keeping an eye on your credit score.
Nonprofit credit counseling agencies like the National Foundation for Credit Counseling or Money Management International can connect you to financial professionals who can help review your budget and manage your debt. These organizations often partner with major creditors to reduce your monthly payments or stop late fees on your credit cards. A caveat: Some moves they suggest, such as closing accounts, tend to hurt your credit score but can be a lifeline if you’re really struggling.
For Mr. Bortle, who is working with Money Management International to resolve $18,000 in credit card debt, seeing some movement in this area has been “awesome,” he said.
“Before, it felt like I was stuck, just making minimum payments where most of the money went to interest, so my balance barely moved,” he said. “It was frustrating, and if I missed even one payment, the consequences felt overwhelming. Now I can actually see progress.”
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