Sometimes, you lose a sock in the dryer. Or you look at your wrist and realize your hair tie has vanished. Sometimes, you might even lose your cool (ugh, sorry, I had to).
These small but frustrating losses can start to add up. Suddenly, none of your socks match. The stack of hair ties on your gear shifter disappears. Your friends start to hate you.
But you know what might actually be worse than losing those things? Losing money. And losing even the smallest amount of money can have a big impact on your psyche.
The Psychological Effects of Losing Money
Maybe you misplaced your wallet full of cash or an investment went wrong. Perhaps you were suddenly faced with a giant bill you could only afford by knocking out your entire emergency fund.
Or maybe you even forgot your Bitcoin password (yes, that really happens). There are folks out there who bought Bitcoin years ago before it blew up — and now that its price is booming, they can’t remember the passwords to their digital wallets. As a result, they are left with large sums of their money sitting on the internet somewhere –– and are missing out on big returns as a result.
The Wall Street Journal reports:
“James Howells, an IT worker in Newport, Wales, lost 7,500 bitcoin he mined in 2009 after a hard drive with his private key was accidentally thrown away during an office cleanup. His story went viral this month as the value of the hard drive’s contents rocketed to more than $100 million. Now he’s attempting to excavate the landfill and dig through four years’ worth of trash to find it.”
Others have turned to hypnosis and “brute-force attacks” with a supercomputer, according to the WSJ.
No matter how you lose a chunk of change, it still burns the same. And a financial loss can have damaging effects on your mental game.
If you’re seriously P.O.’ed that you lost your money, you might take big risks to recover it.
Maybe you’ll start investing more. Maybe you’ll borrow some money from your 401(k). You could start to feel desperate, panicked and alone, ready to react instead of act.
How to Recover From a Big Financial Blow
The most important move you can make after taking a hard hit to your finances? It might not be what you think.
The first thing you should do is take a step back. Yes, you’re angry and emotionally invested in the situation, but an Ohio State University study found that taking a moment to see tough situations objectively can help lower anger levels, which could ultimately lead to clearer decision-making.
Think about it: Are you in the best position to make big financial decisions while upset? Are you putting your best interests forward or just trying to recover what’s gone?
Probably more of the latter. So take a step back, sleep on it or whatever else you need to do to let the dust settle, but don’t make any knee-jerk reactions!
After you’ve simmered down, consider these ways to recover your losses:
Re-evaluate your budget. If you’re already on a tight budget, this might not be the best option for you. However, if you have some wiggle room, it might help to cut back on personal spending, like dining out at restaurants or shopping. Funnel that money back to wherever you lost big.
Pick up a side hustle. If you don’t want to change your day-to-day spending habits, consider picking up a side hustle. By adding more income, you’ll have more means to rebuild whatever funds you lost.
Get strategic. Want to work smarter, not harder? Get strategic with your finances. Consider using things like Ebates or cash-back rewards credit cards — responsibly, of course — to slowly make money without even trying.
And remember: We’re here for you every step of the way.
Kelly Anne Smith is a junior writer and engagement specialist at The Penny Hoarder. Catch her on Twitter at @keywordkelly.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
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