Baseball sportscaster Vin Scully lamented, “Losing feels worse than winning feels good.” Isn’t this so true? It is shown the pain of losing $20 is psychologically twice as powerful as the joy of finding $20. This is referred to as loss aversion. Loss aversion is a natural human tendency that happens in our brains. The same parts of the brain that process fear and prediction activate when we experience financial loss. To our brains it is like we stepped on a snake and we start to predict there is a hidden snake lurking with each step to follow. Loss of income doesn’t just impact how we feel today but it influences how we will act tomorrow. Therefore, it is common for people who have lost work or income to experience a wide range of strong emotions.
How Loss of Income Affects Your Mental Health
When experiencing loss of income, you may go through emotions similar to the five stages of grief. At first you may be shocked that this happened to you and deny the truth. If you have bills due, you may feel despair. If fraud was involved, you may feel guilty for not being more cautious. You may become angry at yourself or others and need to cast blame for the injustice that was done to you. Finally, you may feel fear, anxiety and possibly even experience panic attacks. It is not uncommon for people experiencing job or income loss to fall into depression if they don’t employ strategies to deal with these difficult emotions.
Strategies to Recover from Loss of Income
First, allow yourself to feel your emotions. Suppressing your sadness or anger over the loss of income or employment may prolong the recovery process. Second, remain diligent in looking after your physical health. Prioritize good sleep, a healthy diet and exercise. Taking care of yourself mentally and physically prepares you to take action. This is no time for isolation, draw upon your network for help. Solicit help from family, friends, and business contacts. As hard as it is for you to ask for assistance, know that people get joy from helping others. If you feel too overwhelmed to begin the recovery process, consider joining a support group or talking to a counselor.
Practical Steps to Improve Mental Health
Take a deep breath! Examine your current financial situation. How much money do you have on hand to cover on-going expenses? Is this loss of income manageable? Make immediate adjustments to your budget while you formulate a recovery plan. Is this loss of income substantial? Implement your emergency budget. It is critical you prioritize essential spending. Knowing you can meet your immediate financial needs should allow you the mental space to process the loss and chart a course for recovery.
Strategies to Prepare for Loss of Income
No one is immune from possible loss of income or employment. Advance preparation is the key to how easily you’ll navigate this circumstance should it occur. Starting an emergency fund is critical. Typically, financial planners recommend you save 3 to 6 months of living expenses in your emergency savings account. Preparing an emergency budget will help you stretch your savings even further. If you need advice on how to start an emergency fund or prepare an emergency budget, don’t hesitate to ask for help. Our Financial Specialists at Apprisen will assist you no matter where you are on your financial journey.