MoneyWatch talks to Stanford Professor Jennifer Aaker about the psychological toll of the economy's dips and dives and tips for staying stress-free.
>> On Tuesday I'll get the pink slip.
>> The challenge is real. Making the mortgage. Just getting food on the table.
>> My family in general has lost quite a bit from the stock market crash.
>> Sumi Das: Like a dark cloud looming, the economy is sobering the nation's mood. Experts say while reactions to the economic crisis run the gamut, withdrawal is common.
>> There's an increased level in anxiety for some individuals, fear for other individuals. Some people disengage.
>> Sumi Das: Jennifer Aaker is a professor at Stanford's Graduate School of Business. She's working with Cassie Mogilner: an incoming professor at Wharton. Their research looks at the psychology of money and happiness.
>> The thing that's happening with the current state of the economy is that there's a lot of focus on money. And research has found that when people focus on money, then some negative consequences happen.
>> Sumi Das: For example, people are less likely to ask for help when they need it. They are also more likely to blame others for their misfortune. Aaker and Mogilner's research also suggests that the way people react to a financial downturn varies over one's lifespan.
>> What we see is that as people age for example, they more calmly mediate the emotional roller coaster. The things in life that you would think would get them down, don't get them down nearly as much. So it's younger individuals in general that are more emotionally volatile that react to these external circumstances or events in life.
>> Sumi Das: But young or old, for some individuals a silver lining has emerged amidst the doom and gloom.
>> There is a certain segment of individuals that have realized that income and happiness don't necessarily correlate: that even though they may have decreases in wealth over the last 6 months that, that is uncoupled from how happy they are.
>> Sumi Das: Still if you are feeling down, Mogilner and Aaker offer tips for managing stress and living a happier life during these tough times.
>> Refocusing on the small things in life: what really brings you pleasure. It might be a small cappuccino or a Starbucks. It might be something as simple as a toy.
>> Sumi Das: Aaker adds, giving is also important, whether it's to a charity or a gift to a friend. In addition, the American Psychological Association or APA offers these strategies. First, pause but don't panic. There are many negative stories about the economy. Try to refrain from getting caught up in the depressing hype and remain calm. Second, turn these challenging times into opportunities for personal growth. They recommend exercise and learning a new skill. Third, recognize how to handle financially induced stress. If you respond to economic woes by drinking, gambling or over eating, pay close attention to early signs of these behaviors. And finally, Mogilner recommends shifting your attention away from what you've lost.
>> It's a focusing on what you have. It's a sense of gratitude. So instead of focusing on what you're losing, focus on what you have. And those are the things that are probably more influential in your general well being.
>> Sumi Das: For Moneywatch.com, I'm Sumi Das.
==== Transcribed by Automatic Sync Techologies ====
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