How Do You Cope in a World of Uncertainty?

“Uncertainty is an uncomfortable position. But certainty is an absurd one.” ~ Voltaire

We sometimes forget that how we live and work today wasn’t always the case.

Here are a few examples:

In the 1980s, you got on a NYC subway with a token, which was $0.75. Today, we use a metro card and a single ride is $2.75. Soon, you’ll be able to use an app on your phone.

In the 1980s, ATMs were still pretty novel and only able to give you money. Today, they are ubiquitous and are now equipped to take deposits – making a visit to a teller for basic banking transactions almost unnecessary.

In the 1980s, you needed a lot of money to buy individual stocks. Today, not only can you buy fractional shares, but the cost to do so is incredibly cheaper, too.

Mutual funds have existed since the 1800s, mostly for wealthy families. But they really caught on in 1980s and 90s for the “retail” market (read for people who weren’t high-net-worth) and have grown exponentially ever since.

Closely tied to the explosive growth of mutual funds is the shift from defined-benefit plans (employer-funded pensions) to defined-contribution plans (employee-funded retirement savings).

In the 1980s, I would have a hard time getting a taxi to take me from Manhattan to Brooklyn because cabs didn’t like going to the outer boroughs.  Today, a tap on my phone and a Lyft driver is just a few minutes away.

Why the trip down memory lane?

As I listen to the debates surrounding healthcare and tax reform, there’s a critical point missing from the conversations: The ones I’ve heard don’t take into account today’s economic and employment landscape.

More important, they don’t capture how these changes have shifted and altered both the risks and the responsibilities taken on by individuals, families, corporations and the government.

By now, you’re probably tired of me reminding you of this. But the matter is far too important to not bring it up as often as I can. Because the shift in how you and I live and work today (versus 30, 20, 10 and even just 5 years ago) amplifies the economic and employment uncertainty you and I already face. Every Day.

Am I being a little dramatic? Perhaps.

But as I said in a recent media interview, most financial products, services and regulations are based on how we lived and worked pre- the 1980s. They don’t reflect the evolution and innovation that shape the employment and economic realities of today.

The truth is you enjoy many of these changes (and the conveniences they bring), and probably can’t even imagine managing many aspects of your life without them.

The flip side: You are now responsible for managing some risks that you didn’t choose and likely are not fully prepared for.

Sometimes, uncertainty comes on the heels of an unexpected lay off?  At other times, it is because your business grew slower than you had projected? Or, maybe you added to your debt when your goal was to reduce it, but cashflow challenges preempted that from happening? Or, perhaps you faced a health crisis? Maybe you’re mapping out a new financial plan in preparation for a separation?

These are some of the ways uncertainty showed up in the lives of my clients.

And perhaps the specifics of how uncertainty showed up in your life this year are different from theirs. But here’s what I am curious to know: how did you respond when you encountered the unexpected?

Furthermore, will the approach you’ve used thus far serve you as you plan for a world that doesn’t yet exist?

When life throws you a curve ball, do this

Don’t try to avoid or overcome uncertainty

Instead, embrace that you are not in complete control of how things will turn out and/or what will happen next. And, use this awareness to focus on and prepare for several possibilities.

Make a list of the skills & tools you’ve used in the past

You’ve successfully dealt with uncertainty and the ripple effect thereof in the past. It’s why I asked you above: ‘How did you respond when you encountered the unexpected?’ When you make a list of the resources you’ve used before – skills, tools and help from others – it reminds you that you’re not a newbie at adapting to change. Even if the new circumstances would have you believing otherwise.

Lean into your emotional intelligence (EQ)

Use the self-awareness you have about your emotions and emotional triggers to help you avoid knee-jerk reactions. After all, they are rarely ever beneficial.

Acknowledge your emotions; decide on the facts

All of the decisions you and I make are influenced by our emotions. And dealing with uncertainty is bound to unearth both the emotions of which you are aware (and those you may be discovering for the first time). So be sure to take stock of the facts as you decide what actions to take next.

All of the above suggestions are bolstered by this one that follows…

Focus on mitigation and adaptation

When it comes to uncertainty and disruption, it’s almost like “the chicken and egg” causality analogy of which comes first. Enter the roles of mitigation and adaptation.

Mitigation is all about reducing your vulnerability to the disruption of what is “normal” to you. When you think about your life, work and money, where are you most vulnerable…right now? And what are 1-3 actions you can take to reduce this vulnerability?

Adaptation is all about what you need to do to be agile and resilient. When you think about the ways in which you cope with uncertainty, what is your practice for identifying and seizing opportunities that currently reside in your blind-spot?

Preparation prevents a multitude of…

The uncertainty that comes with the realities of today’s financial, economic, and employment landscape are only going to be more amplified as we move further into the 21st century. Heck, if we couldn’t imagine five years ago some of the shifts that are afoot today, just think of the surprises that await us five years from now. To be sure, they all won’t have negative consequences – but those are the ones we pay attention to the most, right?

And while we wait on better financial products to help us out, and on consumer-focused regulations to protect us, you have to take matters into your hand. (They already are, actually!)

That means improving your decision-making process in order to improve the quality of your decisions. Because the biggest challenge to making decisions in the midst of uncertainty is feeling good about the decisions you make – regardless of the consequences and whether or not you like them.

The strategies noted above will absolutely help.

So will this: You could also book a complimentary chat with me to create a custom financial game-plan so that you are as prepared as possible for the uncertainty that will show up in your life and with your money. Click here to get started. After you complete the form, you’ll get a link to book a time on my calendar.

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