12 Steps To Protect Your Financial Health During Financial Crisis

Financial crises can be overwhelming, but with the right approach, you can navigate these tough times while maintaining your mental well-being. It’s important to remember that you’re not alone; unity and support from friends, family, and community can make a significant difference.

When the exchange rate increased, Emeka* became skeptical about restocking his shop because the landing cost of goods would influence the selling price, which could drastically reduce sales. However, with the support of his local business community, Emeka found innovative ways to sustain his business. Similarly, Dele stopped his construction projects due to the high cost of building materials, but with the advice and support of industry peers, he found alternative solutions. For Simbi, who resigned from her job due to inadequate salary, the encouragement from her network helped her explore new career opportunities.

“A smooth sea never made a skilled sailor.”

Franklin D. Roosevelt

These situations are common in most countries in the world. As of March 2023, the World Bank recorded that 44 million people live in poverty, with South Asia and Sub-Saharan Africa taking the lead.  A financial crisis in this context is not limited to poverty but lacking adequate financial resources to handle your needs, which could be personal, career, or business needs. Even the rich can encounter financial crises due to several factors, including fraud, business failure, debt, illness, divorce, war, and economic crises.

Economic downturns, job loss, or unexpected expenses can create a heavy burden. During this challenging moment, it is crucial to prevent stress and anxiety which can quickly take a toll on your mental health.

Have you ever felt overwhelmed by financial stress? You’re not alone. Let’s explore some practical steps you can take to regain control and protect your mental health.

1. Acknowledge Your Emotions

It is natural to develop negative emotions during a financial crisis, from fear and anxiety to frustration and sadness. Acknowledging these feelings rather than suppressing them can be a critical first step. Allow yourself to experience and express your emotions – whether through interacting with a trusted friend, journaling, or engaging in creative activities. Do not allow your feelings to pull you into unproductive isolation but productive association and activities.

2. Create a Realistic Budget

Taking control of your finances can provide a sense of empowerment and clarity. Start by assessing your financial situation and creating a realistic budget. Identify essential expenses and look for areas where you can cut back. When struggling to handle your basic needs, you might decide to eat home-cooked food, do your laundry, or reduce your shopping expenses. For business, you might reduce your workforce or acquire needed skills to execute some tasks by yourself until you can employ more hands. Can you put some projects on hold until you can conveniently handle them? Avoid buying luxury until you break even or declare profit. This process helps to control your finances, reduces uncertainty, and alleviates stress.

3. Seek Professional Advice

Sometimes, managing financial issues on your own can be challenging. Do not hesitate to seek advice from financial advisors, business experts, or credit counselling services. They can offer guidance tailored to your situation and help you make informed decisions to reduce anxiety and provide a clearer path forward. Depending on your circumstances, they may guide you on how to avoid or reduce debts, earn more money, get a credit facility or loan, secure a grant, or find reliable business partners or equity investors to mitigate risk. 

4. Practice Mindfulness and Stress-Reduction Techniques

Mindfulness practices such as meditation and deep breathing exercises can help you stay grounded and reduce stress. These techniques can be effective in managing anxiety and maintaining mental clarity. Even a few minutes of mindfulness each day can make a significant difference. We give practical tips in the article Becoming: The Power of Your Mantra.

5. Stay Connected with Support Networks

Isolation can intensify feelings of stress and anxiety. Stay connected with friends, family, and support groups. Talking to others who understand your situation can provide emotional support and practical advice. Social interactions can also offer a valuable distraction from financial worries. You may watch our interview with Emmanuel Onyebu, who overcame financial stress by following business advice from a friend. Watch the video here.

6. Focus on Physical Health

Physical health and mental health are closely linked. Ensure you maintain a balanced diet, exercise regularly, and prioritise sleep. Physical activity releases endorphins, which can improve mood and reduce stress. Avoid excessive consumption of alcohol or other substances as a coping mechanism. Indulgence in alcohol can lead to addiction and intensify your problem.

7. Set Small, Achievable Goals

Setting and achieving small goals can provide a sense of accomplishment and progressive momentum. Even saving a small amount of money each week or finding ways to supplement your income can boost your happiness, confidence, and morale.

8. Limit Exposure to Stressors

While it is important to stay informed, constant exposure to negative news can heighten anxiety. Set boundaries on how much time you spend consuming news or discussing financial worries. Allocate specific times for these activities and ensure you engage in positive and enjoyable activities throughout the day. Read the article Mental Health Tips for Everyday Life for more tips.

9. Explore Ways to Earn More

Finding additional sources of income can help alleviate financial stress. Here are some ideas:

  • Freelancing: Utilise your skills in writing, graphic design, programming, or marketing on platforms like Upwork, Fiverr, or Freelancer.
  • Part-Time Jobs: Look for part-time opportunities in your local area or remote positions that can be done from home.
  • Gig Economy: Consider driving for ride-sharing services, delivering food, or performing tasks through platforms like Uber, Lyft, DoorDash, or TaskRabbit.
  • Online Selling: Sell unused items on eBay, Craigslist, Jiji, or Facebook Marketplace. Alternatively, consider creating and selling handmade products on Etsy, or dropshipping.
  • Tutoring: Offer tutoring services in your areas of proficiency, either locally or through online platforms such as or Wyzant.
  • Renting Out Space: If you have extra space, consider renting it out on Airbnb or offering storage space.
  • Monetise Hobbies: Turn hobbies like photography, crafting, or cooking into side income by selling your products or services.
  • Collaborate: Selling or recommending other people’s products and services could earn you a mouth-watering commission. We provide helpful tips in the article Pivoting, Expanding, and Collaborating in the Present-Day Economy.

10. Rely on Spiritual Strength

During financial crises, turning to spirituality can provide a deep sense of comfort and resilience. Here are some ways to harness spiritual strength:

  • Develop Faith and Hope: Engage in practices that strengthen your faith, whether through prayer, meditation, or reading spiritual texts. Cultivating hope can provide a sense of purpose and direction during tough times.
  • Join Spiritual Communities: Being part of a spiritual or religious community can offer support, encouragement, and a sense of belonging. Participate in community activities, attend services, or join study groups. You may connect with leaders or mentors who can offer wisdom, guidance, and support tailored to your spiritual beliefs and practices.
  • Practice Gratitude: Many spiritual traditions emphasize the importance of gratitude. Regularly acknowledging and giving thanks for the positives in your life, no matter how small, can shift your focus from what you lack to what you have.

If you are struggling with your belief, read the article Africans Are Religious, But Who Else?

11. Avoid Get-Rich-Quick Schemes

Financial distress often makes quick-fix solutions tempting. It is wise to avoid schemes that promise easy and rapid wealth, even if you enjoy a reward on your first attempt. Getting busy with get-rich-quick tasks can limit your dedication to real, ideal solutions. These schemes prey on individuals in vulnerable situations and can lead to greater financial loss and stress. Here is how to stay safe:

  • Be Skeptical of Unrealistic Promises: If an opportunity sounds too good to be true, it likely is. Avoid schemes or businesses that promise high returns with little effort.
  • Research Thoroughly: Before investing time or money, research the opportunity, check reviews, and look for any red flags. Use reputable sources and consult financial experts if needed.
  • Focus on Sustainable Income Sources: Choose income-generating activities that are legitimate, reliable, and align with your skills and interests.
  • Educate Yourself: Every investment carries a degree of risk. However, increasing your financial literacy can help you understand how to manage and grow your money with minimal risk.

12. Consider Professional Mental Health Support

If your stress and anxiety become overwhelming, consider seeking help from a mental health professional. Therapists and counsellors can provide strategies to manage stress, anxiety, and depression, and offer a safe space to discuss your concerns.

In summary, financial crises are undeniably challenging, but prioritising your mental health is essential to navigating these tough times. By acknowledging your emotions, seeking support, practicing mindfulness, maintaining healthy habits, exploring additional income sources, and relying on spiritual strength, you can protect your well-being, emerge stronger, and empower your community. Remember, any financial crisis is temporary if you keep taking action. Together as Huggers, we can overcome these challenges and support each other toward better financial and mental health.

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* The names have been changed.


March 2023 Global Poverty Update

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