Even before this year’s economic turmoil hit, financial anxiety among Americans was running high. Really high. Four of 5 Americans in a survey for Discover last year said they were worried about their money situation, with inflation, everyday expenses, and the state of the economy leading a litany of concerns.

Nearly two-thirds said they would be financially unprepared if they lost their job, and more than half felt the same way about a recession.

Now, tariffs and a global trade war, which could raise prices and discourage consumer and corporate spending, have economists raising their odds of such a downturn this year. Coupled with wild swings in the stock market, which is down about 9 percent for the year, it’s no wonder that financial anxiety is spiking to new heights.

“Since Covid, we’ve all just been waiting for the next shoe to drop, moneywise,” said Megan McCoy, a financial therapist and an associate professor of personal financial planning at Kansas State University. “For years now, it’s been one kind of painful financial situation after another. We can’t catch our breath.”

The danger is not just the financial anxiety, which has been linked to a higher risk of various health problems, from depression to heart attacks. It’s also possible that the pressure can drive you to take actions that could make your financial situation worse.

“The urge people feel to do something to make themselves feel better can be overwhelming,” said Anne Lester, former head of retirement solutions for J.P. Morgan Asset Management and author of the book “Your Best Financial Life”. “But it’s hard to make sound decisions when you’re scared.”

Here are six strategies that experts say will help you keep a cool head and protect your money when anxiety is heating up.

Adjust your perspective

It’s hard not to focus on the most recent hairpin turns of the stock market. In the span of just five trading days this month, the S&P 500 had one of the worst two-day drops on record (10.5pc), followed by its best one-day climb since 2008 (9.5pc).

Add it up, though, and the index is down 4.4 per cent for the month — and April isn’t even half over. But what happens to stock prices in a single week, month, or even year won’t matter in the long run to retirement savers, many of whom have decades before they stop working, said Brad Klontz, a financial psychologist and author of the book “Start Thinking Rich”.

Even retirees often have an investment time frame that could span 20 or 30 years or more.

From that perspective, stocks still look like a smart investment for long-term growth, particularly when paired with fixed-income assets for stability. Over the past 100 years or so, stocks have returned 10 per cent annually on average, Klontz said, handily beating other assets.

And although recessions are painful, he said, they’re a routine part of an economic cycle, happening every few years or so, and the country has always bounced back from them.

 “What feels in the short term like you’re headed off a cliff is more like a speed bump when you look at it with a long-term perspective,” Klontz said.

 Slow your roll.

 For some 401(k) investors, the urge to sell stocks as prices tumbled has proved too powerful to resist. With these savers shifting money from stocks to fixed-income funds, the volume of 401(k) trading during the first quarter of 2025 was the highest in nearly five years, according to Alight Solutions, which tracks workplace retirement plan activity.

(The activity involved less than 1 percent of the total 401(k) plan balances, but the jump is notable.)

The sell-off picked up additional steam after the free-fall in the market on April 3 and 4, with 10 times the usual volume on April 7, the next trading day, the most transactions in a single day since March 2020. This shows how easy it is for anxiety to spur action that may not be in your best interest since those sellers missed out on the surge in stock prices later in the week, which allowed the major indexes to recover a big chunk of the losses incurred so far this year.

“All decisions are bets; we never know if they’re wise or not until time has passed,” said Naomi Win, a clinical psychologist and behavioural analyst with Orion Advisor Solutions, a wealth management tech firm.

“Resist the culture of immediacy by learning to pause and be thoughtful and take time on decisions rather than reacting on emotion.”

Don’t look at your balances. (Really, don’t.)

 The pain of losing money is more powerful than the pleasure of making it — a cognitive bias that behavioural finance experts call loss aversion. That’s why constantly checking your 401(k) when the market is falling is a bad idea; seeing your lower balances only makes you feel worse.

 Imagine the worst.

 It may sound counterintuitive, but identifying your biggest fear about your financial situation now, then thinking about how you’d manage the fallout, can be a calming exercise. “Psychologically, simply knowing there are options reduces anxiety in an otherwise paralysing situation,” Win said.

 Identify one move.

 You cannot control stock prices or whether the economy will tip into a recession. So, focus on what you can control, especially actions that could improve your financial situation in a downturn. Take spending.

“If you don’t have enough cash set aside to cover your expenses for three to six months in case you’re laid off, you should be looking aggressively to cut back discretionary spending and get that emergency savings built,” Lester said.

“You may feel like every nickel is already allocated, but for anybody who is getting takeout, travelling or who has more than zero subscription services, you can find places to cut back.”

If you’re worried you might lose your job in a recession, try to make yourself more indispensable by learning a new skill that is in high demand in your field. Or warm up your professional network by connecting with other people in your industry, or develop a side hustle for extra income, Klontz suggested.

Practice self-compassion.

 Sometimes, compounding the financial anxiety is a sense that you may be partly to blame for your money struggles. “At times like these, people often see financial failures as personal failures:

The market is crashing, and now I’m not going to have enough money because I didn’t make enough or save enough or I didn’t work hard enough or I’m not good enough at managing this stuff,” McCoy said. She encourages a gentle reframing: “Tell yourself, ‘I did the best with what I knew at the time.’”