How to BeHappy! in a Bad Economy or in Times of Financial Stress

As I write this article in September 2008, our economy in the US is going through a tough period.

Gas prices are the highest they’ve ever been, home values have fallen dramatically, inflation has been increasing, foreclosures are commonplace, and unemployment is rising.

This can obviously be a very stressful situation. Many people are anxious and scared about how to pay the bills every month, or whether they’ll even have a job in the new year.

And I won’t mislead you … it’s really tough out there right now (you’re probably thinking, “tell me something I don’t know”). Like many of you, I feel the effects of this economic downturn myself since I am in a career transition as I work to get this website up and running, and have two other businesses which are negatively affected by the economy. So I know how many of you feel.

This prompted the question I asked myself (which resulted in this article) … and that is, how is it possible to stay positive and “happy” during these tough economic times?

The best answer to that question won’t help most people right now since it requires foresight and planning (which generally only a relatively few people do - and it’s too late during this “cycle”, given that we’re in the midst of a bad economy today).

That answer is “preparation”. I discuss this at length in BeHappy! since being prepared for life’s “tough times” – whether economic or otherwise - is one component of living the happiest possible life. Preparing adequately for financially challenging times makes the experience at least easier to get through, and at best, actually a positive or favorable situation. I’ll get back to this in a few minutes.

But first, since most people are not as prepared as possible for the tough financial times we are facing today, what can we do right now to stay positive and happy anyway?

The answer is not simple, since we are each under different levels of stress and we all have different financial conditions. It’s also very complex since the anxiety associated with financial pressure is very real and emotionally distressing – and we all respond differently to that pressure. Finally, the answer can also be difficult since it requires some work, honest introspection, and sacrifice. But for most people, it’s worth the effort.

Here's what to do:

The first step is a mental (intangible) one. It requires us to look at the big picture and consider what is positive in our life right now (in other words, the powerful “gratitude and appreciation” tool of happiness). I call it the “It’s A Wonderful Life” perspective.

Have you seen the classic 1940’s movie, It’s A Wonderful Life? If not, go rent it right away. It’s shown several times every year around the holiday season (even though it’s not really a holiday movie).

The main message of the movie is exactly what we’re discussing here. George Bailey (played by Jimmy Stewart) gets into serious financial difficulty and is having many personal challenges – like the death of his father, a struggling business, a bad economy, and the need to support his wife and 3 small children. The situation is so bad, he even contemplates suicide. Now I don’t want to give away the plot of the movie for those of you who haven’t seen it yet, so I’ll just say that he has a revelation, and realizes - at the deepest level - that it really is A Wonderful Life, even though times are very tough and he’s in serious financial trouble. His life is put into perspective for him (in a very interesting way) and so the financial stresses which have been consuming him seem small by comparison. In fact, at the end of the movie, his brother calls him “the richest man in town” – even though the financial crisis is not totally over for him.

I discuss some of the other great messages from the movie in other articles throughout this site (like in the “relationships” and “job happiness” sections). For now, though, if you haven’t seen the movie yet, go rent it. And if you have seen it, go rent it anyway and watch it again. Or just do what I do and watch it every year during the holiday season. Each time I watch it, I get inspired and “prepared” for the next wonderful year. It reminds me of how grateful I should be – always - and how much there is to appreciate in life – even when times are tough, like right now. I’m sure it will have the same effect on you.

In fact, as part of this "Wonderful Life" process, before you go on reading this article, stop right now and write down on a sheet of paper at least three things you can appreciate in your life today. What are some of the things you are grateful for (or can be grateful for) right now?

Is it your children? What about your spouse; or your relationship with your parents or siblings? Could it be your health? Maybe it’s your home or the community where you live. Do you have some great friends? Have you experienced a recent success? Is there something that’s made you proud recently? Are you grateful for your job or career? Have you contributed something lately – even something small?

Whatever it is, there are always things to appreciate in your life right now. It’s a matter of identifying them and keeping them right in front of you – constantly in your mind - as you make your way through the financially challenging times. So please, don’t skip this little “exercise”. As simple, and perhaps silly, as it may sound to you, it really helps and can make a profound difference in your outlook … and ultimately your happiness. So just do it! And do it now. Don’t wait.

Think about it. I mean really think about it. If you do, you will realize how many things there are in your life to appreciate; even when your financial condition is tight or downright bad. Because it really is A Wonderful Life, even if you can’t see it under the current circumstances.

OK, now that you’ve written down the three (or more) things you can be grateful for in your life right now (you’ve done it, right?), the second, and more tangible thing to do to stay happy during tough financial times – if you haven’t done it already – is to get a solid handle on your expenses.

Financial stress – which can suppress happiness - comes partly from expenses being higher than the dollars available to pay them. I know, that’s not a very profound or enlightening statement, but some people need to hear it anyway. So the next thing to do is to write down all your expenses, in detail. Just writing them down – and then evaluating and allocating the dollars that are available to pay those expenses - can help put things in perspective and change your outlook. If you’re lucky, it may indicate that you’re not as bad off as you thought, which will certainly reduce stress. On the other hand, for many people, it can add even more stress if there’s really a large mismatch between available dollars and expenses and the situation is worse than expected. Even in this situation, though, it is important that you know these expenses very clearly, because there are still things you can do to reduce the stress and stay happy - which is the objective here.

So where are you spending your money? What are your most immediate and essential financial obligations? Are there any expenses which can be reduced relatively easily, at least temporarily (like a monthly club membership or some regularly occurring non-essential expenses - like getting your hair done professionally or having that high-definition sports cable package)? Can you carpool to save money on the terribly high gas prices today? If you purchased a home when interest rates were high, can you refinance your mortgage to reduce your monthly payments? What about all the miscellaneous expenses – like a lawn or pool service? Can you handle these things yourself until your financial situation is improved?

Do you have significant debt – especially credit card debt? If so, one strategy is to explore the many companies which help with debt reduction or restructuring. These can possibly help reduce your monthly credit card bills, sometimes to a fraction of your current obligations. It’s generally worth a look if you have $10,000 or more in credit card or other high interest debt.

The bottom line is that you must get a clear handle on your expenses. And even if you can’t reduce them much immediately, just knowing your expense situation is a step in the right direction. Then it’s a matter of taking action – maybe creative action – towards improving the situation. This can surely make you happier, or at least less stressed, anxious, and “unhappy”.

Google has a great "Budget Template" at:
http://spreadsheets.google.com/ccc?key=p9R24K-6xIl38cBGPRnzyZw which includes a ready-made expense organizer and calculator to help you get clear perspective on your financial obligations.

Once you have a clear picture of your expense situation, next is the income side of the financial equation. Is there a source of stress, anxiety, and unhappiness associated with this aspect of your life? Are you unemployed right now? Are you concerned about soon being unemployed? Is your current income stream in jeopardy, or is it just completely insufficient for you to meet your obligations?

If you are dealing with these issues, life can be very tough – especially if you have a family to support and your expenses are high. So, what do you do to stay happy if these are issues for you?

Again, looking at the positives in your life is the first thing to do in any of these situations – which you’ve already done here, right? And, the tougher life is, the tougher it is to even acknowledge the positives. But please, don’t minimize this part of the process. It really can be a powerful, motivating source of well being. In addition, you will be much more effective at meeting any challenge with a positive, grateful attitude - rather than with an anxious, negative perspective.

But I know that’s not enough to “pay the bills”. Unfortunately, an article like this cannot provide all the answers since, again, everyone’s situation is different. What everyone needs to do, though, is optimize revenue (cash flow) and maximize earning potential.

This is again not an easy process. Much of it relates to that best solution I mentioned at the beginning of the article – preparation – which I will touch upon in more detail next.

But even if you were not prepared for the current economic downturn, there are some things you can do to enhance your income stream.

The simplest and most immediate thing that can be done is to take on additional work. Can you seek out some consulting work in your field of expertise, for example? Can you get a part-time job? What about getting involved in a network marketing organization for additional income (NOTE: for those of you who don’t know much about this business opportunity, please click on this link - Network Marketing - to get an understanding of how you can make an additional $300, $1000, or even $10,000 a month - or more - with this strategy). In my opinion (and I am involved in network marketing as one of my several sources of income) – this is something everyone should explore to derive passive, recurring, long-term income, regardless of the economy.

Again, use the Google Template at:
http://spreadsheets.google.com/ccc?key=p9R24K-6xIl38cBGPRnzyZw
for a ready-made budget creator and calculator to help you combine your expense details with your income to build a detailed spending plan. This can go a long way toward keeping you in the best financial position during tight times (and it’s a good practice to use this spending plan all the time – not only during difficult times).

OK, so far I have identified some of the specific challenges to “being happy” when financial issues create stress and anxiety. And, associated with those issues are some ideas and tools to help reduce the stress and anxiety a bit (although it usually takes some work and sacrifice to achieve some of them).

One final strategy which is again not a “tangible” or action-oriented strategy is something called transformational vocabulary. I learned this tool during my business partnership with Tony Robbins, the well-known personal development coach. Tony teaches this strategy for all parts of life, but it can be especially effective in these times of financial stress. It relates to the vocabulary we use to describe the events, circumstances, and feelings in our lives; and how this vocabulary can directly effect our emotions and overall outlook. I won’t go into it in detail here in this article, but if you’re interested in finding out how this strategy works – and how to use it to be happier when times are tough - click on this transformational vocabulary link if you want to learn more about this effective technique for reducing the negative emotions financial stress can produce.

OK, now … I said earlier in this article that I’d get back to the “preparation” aspect of staying happy in negative financial times, so I want to touch on a few important points for those who have prepared, and also to help those who weren’t prepared this time, so you can be prepared next time financial conditions are difficult.

Again, the situation is different for everyone. For some, adequate preparation might just help you get through the challenging time a bit less painfully. For others, bad economic times can create tremendous opportunities to actually build more wealth – sometimes significant wealth if you’re very well prepared.

For example, for some people it might just mean establishing a combination of fiscal flexibility and controlled expense management – so that in tight economic times like now, expenses can be easily, quickly, and effectively restructured or trimmed to a level that maintains a positive cash flow and reduces the stress of the situation. This is especially true if you maintain a relatively low debt load.

The ability to quickly augment your income is another way to be better prepared. One strategy for this (and a great strategy for everyone in general) is to set up your life so you have multiple streams of income from which to derive revenue. This is a fundamental strategy for everyone, so that when economic conditions are unfavorable, you have several sources from which to draw income. And most of the time - even in a bad economy, chances are that one or more of your revenue sources will not suffer as much as others.

Obviously, having sufficient cash savings is another clear advantage to keep you prepared for when financially challenging times come around. This requires a certain degree of discipline and forethought.

Finally, as a last-resort (emergency-only) preparatory measure, maintaining good credit can help augment your finances temporarily when it’s warranted. A good credit rating provides the opportunity to borrow prudently if necessary to get through a temporary financial short-fall.

Now, for those who are very well prepared for difficult economic conditions and have some additional available cash – economic down times can create opportunities to build wealth for the future. For example, if you’re in this position you could buy a few rental properties at favorable prices (during a “buyers market”) and develop a steady, long-term positive cash flow for the future as well as add equity to your net worth.

If you’re a business owner, you could consider investing available cash in growth during these times when it might cost less to acquire new locations or expand an existing one. This could give you a great competitive advantage when times improve, since those less-prepared business owners might have taken a step back, or even gone under. This assumes you are prepared enough to “weather the storm”.

Either way, preparation can help you be happier during tough economic and financial times and create tremendous gratification during good economic conditions. So if you were prepared for this cycle we’re in right now, congratulations. Make sure you take maximum advantage of it. You’ll be happy you did.

And if you weren’t prepared, then use the strategies and tools in this article, in my BeHappy! Newsletter, in my book, BeHappy!, and throughout this website to get through it in the best possible way. Most importantly, make sure to be prepared for the next difficult financial cycle – since there will definitely be one, or more, in the future.

To conclude this article, let me summarize a few of the most important strategies to being happy – and staying happy - when financial conditions are tough and cash flow is tight or uncertain:

• Watch the movie, It’s A Wonderful Life;
  
• Think about the positives in your life right now and appreciate what you do have rather than focusing on what you don’t have (make sure to write down the positive things in your life as I had you do a little while ago as part of this article);
  
• Use transformational vocabulary to affect your emotional responses to the situation;
  
• Know and understand your expenses and do whatever possible to reduce or restructure them. Consult a debt-reduction or debt-consolidation company if it could help;
  
• Do whatever you can to augment your income if necessary. There are many ways, including a network marketing strategy;
  
• To prepare for the next bad financial cycle, create multiple streams of income, build a sufficient savings account, and maintain a low debt ratio;
  
• Create and maintain a spending plan at all times, but especially when your financial situation is tight or the economy is depressed;
  
• If you were prepared for the current economic downturn, take maximum advantage of it to build even more wealth (and possibly greater happiness) for the future.

While these are all things to do to improve your outlook and your situation, I realize that life can still be difficult when money is a big issue.

I don’t want to minimize that feeling – which is real and understandable. So, if you need more than an article like this can provide (many people do), please contact us and we’ll point you in the right direction. The goal is for you to be happy, regardless of the situation. So however we can help you achieve that, it’s our mission to do so.

BeHappy! my friends.

PS: Go to Overcoming Fear to Thrive in the Current Downward Economic Cycle to access a powerful series of articles which provides many tools to stay happy during tough financial times.

Also, The BeHappy! Newsletter typically has many tips and techniques for staying happy – even when times are tough. So, if you don’t yet subscribe, do it now right here:

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