There is no question that we are living in very uncertain times (e.g., inflation, stock market volatility) and few things make people more uneasy than uncertainty about the future.

What to do? Below are eight suggested strategies to deal with uncertainty:

Check Emotional Reactive Responses

Emotional stress often makes people make poor decisions. The stressful event sucks up their mental “bandwidth” and they can overlook viable options that are available to them. An effective way to “slow yourself down” and prevent hasty decisions is to develop a personal habit of writing down three ways to handle an uncertain situation and the pros and cons of each option. Also take the time to conduct the research (online and/or via personal contacts) necessary to inform the list of three options.

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Develop a Proactive Mindset

This means acknowledging, learning about, and planning for likely future outcomes rather than ignoring the possibility that they could happen. An example is retirement planning. Among the uncertainties that older adults face (and younger adults need to plan for) are longevity (having savings last a lifetime), health care risks, long-term care expenses, the impact of inflation over time, and retirement savings withdrawals.

Get Comfortable Planning Again

When people are uncertain, they often do…. nothing. Like the proverbial “deer in the headlights,” there is a tendency to “stand pat” and “see what happens.”

Unfortunately, many people have been in “financial limbo” for over two years.

The key to start making plans again is to “start small” with short-term goals, such as a vacation in a nearby state with the ability to cancel reservations without penalty beforehand, if necessary. Of course, investing for long-term goals should, ideally, have occurred without interruption during the pandemic.

Build Financial Resilience

Multiple sources of income can help. For example, salary or steady self-employment earnings, rental properties, investment returns, and/or a “side hustle” (freelancing). Marketable job skills that can move to another work setting are also important. A third resiliency resource is a low consumer debt-to-income ratio (total of monthly payments ÷ net monthly income) and a fourth is an adequate emergency fund (3 to 6 months of essential living expenses). Finally, personal characteristics, such as focus and optimism, are also resiliency resources.

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Keep History in Mind

The U.S. stock market and economy in general has a long history of “bouncing back” after “shocks” including wars, natural disasters, recessions, inflation, and political changes. The worst 20-year time frame return for the Standard & Poor’s 500 index, a benchmark for large U.S. company stocks, was 6.4% for the twenty years ending in May 1979. The worst 15-year time frame return was 3.7% for the fifteen years ending in August 2015.

Have an Investor’s Mindset

Be prepared, psychologically, to see your net worth decline during stock market downturns and plan to simply “ride it out” and stay invested. To avoid having to pull money out of stocks at an inopportune time, place some money in less volatile cash equivalent assets such as a money market fund. This is especially important for retirees and asset segmenting is often referred to as a “bucketing” strategy. Remember that a “paper loss” is quite different than a realized capital loss that occurs when investments are sold.

Make Small Changes

If inflation or job changes are pinching household finances, it is time to revisit cash flow. The most precise way to do this is to track income and spending for a month or two; Then calculate the percentage of income spent on various expense categories such as housing and gasoline.

Many budgeting apps can do this math very efficiently.

With data in hand, the next step is to identify expense cutting strategies.

Examples might include:

  1. Ordering water with restaurant meals
  2. Eliminating a streaming service (if you have several)
  3. Telecommuting one more day

Get Information and Support

In times of uncertainty and stress, it is useful to hear the perspectives of other people. For example, 60-something baby boomers sharing their experiences with high inflation in the late 1970s/early 1980s with young adults who are experiencing it for the first time. Experts also recommend building and maintaining a social support network (i.e., people who care about you) and reaching out to local non-profit and government agencies for financial support. To find the names of local non-profits, call 211 or visit

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