fear of recession
With inflation at 40-year highs, recession fears are growing daily, driven by economists debating about the next big downturn. According to recent studies, more than half of Americans already think we’re in a recession, with nearly three-quarters of CFOs expecting an imminent economic crash. It’s hard not to worry about the state of the economy and our financial futures, but overcoming our fear of recession is the only way to get through it.
Why we have a fear of recession
Recessions can be scary, and fear is a normal reaction when we detect a potential threat. Inflation and unemployment are crushingly real problems with huge financial implications for millions across the country. However, there is a deeper reason for our recession fears.
The true root of all fear is our deep human need for certainty. At our core, most people take comfort in knowing what comes next. And when the world is spinning out of control, our need for certainty becomes more intense, and that’s what really drives our fear of recession.
Certainty provides stability in life but can also hold us back by creating the illusion of safety, trapping us in unfulfilling jobs and lackluster relationships. We may not love coming to work every day, but at least we know we have a job.
Effects of recession fears
As many leaders know, fear breeds more fear, and economists believe that fear of a global recession plays a significant role in creating a recession. When people are worried about an economic downturn, they change their spending habits and contribute to a decline in GDP – a surefire sign of an impending recession.
Fear of recession can also cause analysis paralysis, push us to make bad decisions, or panic-sell our stocks when we should actually invest more. In addition, business owners may pull back on marketing and sales when they should be spending more to get ahead of the competition. Many people also commit the deadly business sin of stopping innovation and forward progress because they’re stuck in survival mode.
Recession fears can also affect us personally. For example, layoff fears can keep us stuck in jobs we dislike, while stress impacts our relationships – money is often one of the biggest and most common relationship stressors. However, even with these issues, our careers, relationships and mindset are ultimately under our control.
How to overcome recession fear
The good news is that you don’t have to live in fear of recession. Fear is an emotion, and we have the power to control our emotions. Here’s how to keep moving forward no matter what.
Take a long-term view
Historically, the economy is cyclical, with bull markets, bear markets, downturns, and rebounds. According to historian Neil Howe, history also operates on a cycle, with a high, an awakening, exciting periods of innovation and creativity followed by an unraveling and then a crisis. However, we’re built to be adaptable, and taking a long-term view helps us understand when it feels like the world is ending, it’s a new beginning.
Become the master of your own destiny
History may work in cycles, but that doesn’t mean we have no control. It’s tempting to use economic downturns as an excuse for the problems in our lives, but the only way to overcome recession fear is to take charge of your life. Stop hiding behind excuses and face your challenges head-on. As Tony says, “Focus on where you want to go, not on what you fear.” Take action and move forward.
Be proactive, not reactive
The best way to stop recession fear is to prepare financially and mentally. Focus on saving and cut back your spending. Rework your budget. Organize your finances and ensure your investments are allocated appropriately. Understand the patterns of the market. The best trading days often happen within ten days of the worst trading days because scared investors panic-sell and exit the market. Overreactions always lead to corrections, so use that knowledge to your advantage.
Find opportunities among the obstacles
Life doesn’t happen to us; it happens for us. This small change in mindset can create a massive shift in the meaning you give your experiences – and meaning is everything. When you believe adverse events can have positive outcomes, you’ll begin to see opportunities everywhere you look. Even in a recession, there are opportunities to start a business, advance your career, and work on building an unshakeable mindset.
Enjoy today
When you live in fear, you live in the past or future, worried about what might happen or what’s already happened. You can’t change the past, and you can’t know the future – the only thing you can control is the present, so start living there. Succumb to fear of recession, and you risk missing out on life. Instead, cultivate gratitude and live in the present, where there’s no room for negative emotions.
Recession fears are normal but don’t allow limiting thoughts to take over your life. Living in fear will cause you to make bad decisions or even worse, trap you in a cycle of inaction. No matter what happens with your life or the economic climate, you are always in control of your emotions.