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What to Do When Anxiety Is the Root of All Evil - Not Money

What to Do When Anxiety Is the Root of All Evil - Not Money

By Sunday, 03 April 2016 08:37 PM Current | Bio | Archive

Thembi Buthelezi grew up in a one car garage in Soweto, South Africa.

The 30-something-year-old moved to the U.S. in 2002, became a stock market trader on Wall Street and yet deep down inside she feared being rich.

“My family history was that of business people who made a lot of money and then lost it,” Buthelezi told Newsmax Finance. “I feared having a lot of money because I didn’t want to be a has-been like my family members."

Buthelezi is among the 75% of Americans who cite stress due to money, according to an American Psychology Association study, compared to 70% who mentioned work as a stressor and 67% the economy.

“Money anxiety is a silent killer because most of us think it’s a normal part of life to worry or have fears about money but I believe it’s not healthy nor is it normal,” said Buthelezi who now lives in Las Vegas.  “Our bodies are not designed to experience extended periods of anxiety and fear. Our brains cannot make coherent decisions when it’s constantly under stress or fear.”

Created by behavioral finance scientist Dr. Dan Geller, the Money Anxiety Index indicates that the current level of public anxiety about finances at 65.7 has drastically improved since the Great Recession of 2008 when the index hovered at 97.2.

“Financial confidence is a major driver in the shopping habit of consumers,” Geller told Newsmax Finance. “When financial confidence increases, consumers spend more money and when their financial confidence drops, they spend less.”

Historically, the Money Anxiety Index fluctuated from a high of 135.3 during the recession of the early 1980s to a low of 38.7 in the mid 1960s. “It provides us with an early-warning system of shifts in the economy, allowing people and businesses time to react in time to changes in the economic cycle,” Geller said.

“Economic cycles of boom and bust are inevitable but if we can see in advance that a cycle is approaching, we can prepare and minimize the financial damages to people and businesses.”

That damage can mar marriages, work relationships and family dynamics.

“Usually, before you experience financial ruin, the warning signs are that creditors will start calling and your lines of credit will dry up,” said Buthelezi. “But that is not the time to hide and get despondent. It’s the time to take massive action to fix the financial problems so you don’t end up ruining your financial future.”

Consumers tend to react right away after a change in their level of financial confidence.

For example, consumers shifted their bank savings from CDs to checking, savings and money market accounts when the recession started in 2008. As a result, consumers lost nearly $60 billion in interest income.

"This move was strictly instinctive because consumers wanted to feel that their money is readily available to them even though they knew that they are going to lose half the interest income by this move," said Geller. "Our initial reaction is to protect ourselves financially and in most cases it's the wrong financial decisions."

Juliette Fairley is an author, lecturer and TV host based in New York. To read more of her work, Click Here Now.

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Consumers tend to react right away after a change in their level of financial confidence.
money, Anxiety, Root, Evil
Sunday, 03 April 2016 08:37 PM
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