How to Navigate Economic Uncertainty and Financial Anxiety

If you’ve found your way to this article, chances are the current economy is really stressing you out. As of this writing, prediction markets reflect a 55% likelihood of a recession. J.P. Morgan reports a 60% chance, and the Economic Policy Uncertainty Index shows that Americans haven't experienced this level of uncertainty since the onset of the COVID-19 pandemic. Across the country, people are expressing concern that the economy is not on the right track, and they’re really anxious about it.

So, does that mean it’s time to panic? No. But does that mean everything will be fine? Not necessarily. Instead, it means we must learn how to navigate uncertainty as it stands today, rather than trying to control every possible outcome.

A phrase I often use in treatment is, “I’m not necessarily teaching you how to be calm, I’m teaching you how to be anxious in a way that works.” Anxiety itself isn’t the enemy, it’s how we respond to it that matters. Some responses can make things worse, while others help us move forward.

What Makes Anxiety Worse

Sugar Coating Your Fears

Let’s be honest, if you were to lose your job, it would be difficult and painful. Pretending otherwise doesn’t help; in fact, it’s a form of emotional invalidation. Minimizing the potential impact of such a loss may feel like an attempt at optimism, but it can actually increase distress. Acknowledging your fears with honesty and compassion is more helpful than trying to convince yourself you wouldn’t be affected.

Catastrophizing

Imagining worst-case scenarios from morning to night may feel like preparation, but research suggests that excessive worry impairs our ability to cope. People who habitually catastrophize often feel even less prepared when their fears do materialize. This doesn’t mean you shouldn’t make plans (as we will discuss later), but catastrophizing isn't the same as constructive planning.

Reassurance Seeking

We all feel comforted when someone offers us assurance. For instance, if we’re nervous about giving a presentation, it helps to hear someone say, “Hey, it’ll be alright.” But what happens when we start relying on assurances more and more to get through our stressors? At that point, it turns into reassurance seeking, which only makes it harder to cope over time.

If reassurance seeking truly relieved anxious distress, I’d recommend repeating, “Everything will work out,” for 30 minutes a day, along with trying to receive five affirming messages from loved ones. But it doesn’t work that way. Over time, the need for positive affirmations grows exponentially, and the strategy quickly loses its effectiveness, leaving you feeling panicked.

Chasing Certainty

Anxiety disorders are often rooted in the relentless pursuit of certainty. If you could just be sure everything would turn out fine, you’d feel better, right? But life doesn’t offer perfect foresight. We can barely predict national economic trends, let alone its impact on our individual lives. When we chase certainty, we end up feeding a cycle of overthinking and exhaustion.

Actively Worrying

Worrying about events that are uncertain or beyond your control doesn’t make you more prepared, it makes you more anxious. Dr. Sally Winston’s book Overcoming Anticipatory Anxiety includes a helpful activity called “The Voices of the Mind,” where she highlights the back-and-forth dynamic between two internal voices: the “Worried Voice” and the “False Comfort” voice. The Worried Voice is constantly arguing about all the what-ifs, and the False Comfort voice unsuccessfully tries to get the Worried Voice to shut up. This dialogue often traps people in a loop that leads nowhere.

Here’s an example:

• Worried Voice: What if we get laid off?

• False Comfort: Things will work out.

• Worried Voice: How do you know? What if we run out of money?

• False Comfort: That won’t happen

• Worried Voice: But what if we lose everything?

·         False Comfort: That won’t happen. Just distract yourself with video games, it’ll all be ok.

·         Worried Voice: I can’t! Every time I try not to think about it, I think about it more. Oh my god… look, JP Morgan just released a report that a recession is high likely, we’re screwed!

·         False Comfort: Ok, well, let’s look up jobs that we could have if things go south.

·         Worried Voice: All of these jobs suck! Also, if everyone is laid off, then it would be almost impossible to find a job. Nothing is working!

·         False Comfort: Ugh! Just stop thinking about it!

The more we engage in this conversation, the more entangled we become. Healing doesn’t come from finding the perfect answer. It’s about stepping away from the argument altogether.

What Actually Helps

Focus on What’s in Your Control

Navigating financial anxiety is like driving a car. Early in my career, I worked on an inpatient rehabilitation unit where many patients had experienced severe spinal or orthopedic injuries from car accidents. Understandably, this exposure made me feel anxious about driving. But telling myself I’d be okay with becoming paralyzed was neither practical nor comforting. On the other hand, obsessively researching home renovations or medical equipment "just in case" would have added unnecessary stress.

What helped was focusing on what I could do: wearing my seatbelt, following traffic laws, and choosing safe routes. None of this guaranteed safety, but it helped me make reasonable, grounded choices in the present.

When it comes to finances, the same principle applies. If you’ve assessed your situation and realized you need to build an emergency fund, that’s a practical step. Does it guarantee you’ll be financially secure in every situation? No. But it’s a responsible and effective action based on what’s in your control today. Or if you’re subscribed to services you no longer use, canceling those can free up some funds. Again, these actions WILL NOT eliminate all financial stress and worried thoughts (because nothing will), but they represent ways to channel anxiety into meaningful behavior.

You might tell yourself:

“I notice I’m feeling anxious about the economy. My mind wants 100% certainty that everything will be okay, but I know that’s not realistic. Instead, I will review my budget and cancel unused subscriptions. This won’t silence my doubt completely, but it’s a step in the right direction.”

Set Boundaries with Worry

Telling yourself to “stop worrying” doesn’t work. In fact, it often makes the worry louder. I often compare active worrying to writing essays in your head for hours at a time. If someone asked you to research and write about the economy for ten hours a day, every day, you’d eventually feel exhausted and hopeless.

One useful strategy is to designate a time and space for worry. Write down your financial concerns and questions on a piece of paper, and let that be your boundary for further analysis. Remind yourself, “This is when and where I’ll think about the economy. Outside of this time, I’ll gently redirect my focus to whatever else is in front of me.” Avoid questions that require perfect answers, those tend to be traps for anxiety.

Expect to be Triggered Again

More unsettling news will come. You’ll likely come across TikToks titled, “There is no precedent for what we are experiencing,” or read leaked memos from the Treasury Department that paint a bleak picture. This will trigger your anxiety. The goal is not to avoid these feelings, but to learn how to respond in a way that supports the life you currently have instead of leaving you stuck in a cycle of constant worry.

When the news feels overwhelming again, ask yourself: Will scrolling through hundreds of tweets actually help me get through the week? Or would it serve me better to acknowledge my feelings, remind myself that I’ve done what I can—even if doubts linger that more could be done—and gently return my focus to living in the present?

Final Thoughts

Financial anxiety and economic uncertainty are very real and emotionally taxing. Our careers, stability, and relationships are all deeply connected to our financial lives. A strong economy can support our ability to care for ourselves and others. Therefore, the goal of overcoming financial anxiety isn’t to stop caring. The goal is to care in a way that helps you function, respond with clarity, and stay grounded.

I hope this article serves as a guide for navigating these difficult feelings and helps you see that it is possible to live with financial anxiety in a way that supports, not hinders, your well-being.