Is your money making you crazy?

By Liz Pulliam Weston

A deteriorating economy, the volatile stock market and plunging home prices have plenty of people worried. But some folks are really going off the rails.

Bad financial news can create overwhelming anxiety, obsessive thoughts and extreme pessimism in people who have a troubled relationship with money, therapists and financial planners say. For example:

• When the stock market takes a dive, they predict an epic crash.

• When forecasters discuss a recession, they're convinced the second Great Depression is days away.

• If the unemployment rate ticks up, they picture themselves on the streets with a shopping cart.

Financial planner Brent Kessel calls these hyperalert, anxious folks "guardians" and says they are particularly vulnerable to overreacting to gloomy money news.

"This is exactly the kind of situation their unconscious mind has been waiting for," said Kessel, the author of "It's Not About the Money: Unlock Your Money Type to Achieve Spiritual and Financial Abundance." "Inside they're saying, 'I told you this would happen!'"

Of course, said Washington, D.C., money therapist Olivia Mellan, some of those in a cold sweat over the economy or the markets have good reason to be.

That includes people who are living beyond their means, have little savings or are facing big debt payments, such as a mortgage they can't quite manage, said Mellan, the author of "Money Harmony: Resolving Money Conflicts in Your Life and Relationships."

Compulsive actions

But others experience outsized emotional and physical reactions to money uncertainty, even if their basic financial situations are under control.

What's more, they often end up doing the very things that make their anxieties even worse, Kessel said, such as compulsively checking their portfolios or concocting "doomsday scenarios" in a futile effort to feel in control.

"They respond by saying, 'I'm going to be superalert. I'm going to watch all the instruments and dials every second,''' Kessel said.

Typically, these people suffered some emotional blow in childhood or early adulthood, said Los Angeles psychiatrist James Gottfurcht. The trauma may not have been related to money, Gottfurcht said, but it likely was. Their parents may have gone bankrupt or lost the family home; as children they may have experienced want or deprivation; perhaps they were disowned or otherwise cut off before they were able to take care of themselves.

Often their bodies begin reacting to financial distress even before their minds have fully processed the actual threat.

"People who have had some abuse or trauma . . . their nervous system is conditioned to go to a bad place more quickly," said Gottfurcht, the founder of Psychology of Money Consultants, which coaches people on financial issues. "You might experience tightness with your breathing, constriction in the chest, heart palpitations, facial tics or twitches. Once you start to react in your body, your mind tries to rationalize it whether you're aware of it or not."

That creates a kind of endless feedback loop: Your body tenses, so you begin imagining impending doom, which causes your body to seize up even more.

"It feels like a threat to your survival," Kessel said. "When my sense of security with money is threatened, it's like you're holding a knife to my throat."

How to get a grip

The problem, of course, is that you can't assess the reality of your situation when your mind and body are in a tizzy. Whether your anxieties are based in fact or are mostly fantasy, here are some ideas for getting yourself in hand:

Separate what you can control from what you can't. Obsessing over matters you can't influence is pointless. You need to switch focus to what you can control before you can begin feeling any mastery over a situation.

What's beyond your control? Among other things:

• The economy.

• The investment markets (stocks, bonds, commodities, whatever).

• Interest rates (unless you're the Fed chief).

• Housing prices.

What's within your control?

• What you choose to think about and dwell upon.

• What you eat, how much you exercise, whether you take time to relax, your sleeping patterns.

• How much of your paycheck you spend.

• How your investments are deployed.

Switching your focus to these latter areas and taking concrete steps to improve your situation can help you battle your anxiety.

Continued: You need a break

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