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A woman pushes a shopping cart through the grocery aisle at Target in Annapolis, Maryland, on May 16, 2022, as Americans brace for summer sticker shock as inflation continues to grow.
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Many Americans feel anxious about money, especially when inflation is high, interest rates are rising and markets are whiplashing.
More than 40% of U.S. adults said that money concerns have a negative impact on their mental health, according to a recent survey from Bankrate. Of those who said money took a toll, most cited feeling stressed, anxious and overwhelmed.

“When individuals suffer money challenges or they’re working through money issues, there’s tremendous potential for stress,” said Mark Hamrick, senior economic analyst at Bankrate.
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A primary concern for many households now is high inflation, which has hit most major expenses and outpaced wage gains. Here’s what financial experts say can help.
How to manage anxiety
When faced with difficult financial environments, it’s important to consider what is within your control and what isn’t, according to Preston Cherry, a certified financial planner, certified financial therapist and founder of Concurrent Financial Planning in Omaha, Nebraska.
“We can’t control things like inflation, war, market cycles or economic cycles — those things are going to happen,” he said. “Uncertainty is certain.”

Knowing that can help people take some of the blame and shame for financial strife off themselves and better process what’s happening in the environment, he said.
“That allows thinking about what we can do about it to make it through,” he said.
What money adjustments to make
One of the issues people face with inflation currently hitting so many sectors is that it’s unavoidable, said Jason Steeno, president at CoreCap Advisors & CoreCap Investments in Southfield, Michigan.
“It’s almost a grin-and-bear-it type of situation,” he said.
To ensure you aren’t consistently overspending, however, now is a good time to check that your monthly budget is sufficient to meet your needs, according to Katie Nixon, executive vice president and chief investment officer for the wealth management business at Northern Trust.
“It’s always a healthy thing to do but more so given the inflationary pressures,” she said. “You have to make sure that your budget accommodates the fact that your needs have gotten more expensive.”

Keeping spending within your budget may mean you have to cut certain extra things such as entertainment, travel or dining out. Many Americans have already made such cuts.
Experts also recommend building up emergency savings, if you can, and paying down debt, especially from high-interest credit cards. Doing this will help better your financial situation for whatever comes next.
Generally, advisors suggest that your emergency fund should have somewhere between three and six months of living expenses.
“You want to have a cash cushion in order to have a guard rail against any large pendulum swings back,” Cherry said.
Remember that cycles happen
It’s also important for Americans to keep in mind that economic cycles are just that — cyclical. There may be better times ahead.
“Our view is that we have seen at or close to peak inflation, and that’s good news,” Nixon said. “There’s been a lot of damage done, but it may be coming to an end.”
She also pointed to recent earnings reports from Walmart and Target, which showed shifting consumer spending and that the big-box retailers are absorbing some of the higher prices of goods instead of passing them on to shoppers.
Still, she suggests that people continue to watch their cash inflows and outflows over the coming months, as prices are likely to remain elevated even as inflation cools off.
“It doesn’t mean that we’re going back to 2% in the next year or so, but it does mean we’re coming off these high levels,” Nixon said.
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If you’re chasing portfolio income, you may be eyeing U.S. high-yield bonds, which are paying about 7.5% interest.
However, high-yield bonds have greater default risk than their investment-grade counterparts.
And the Federal Reserve’s plans to combat inflation may boost default risk, financial experts say.

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If you’re chasing portfolio income, you may be eyeing high-yield bonds, also known as junk bonds, which typically pay more interest but carry greater risk.
Since interest rates and bond prices move in opposite directions, U.S. junk bond values have dipped to the lowest levels since May 2020. But yields are at 7.5% as of May 17, up from 4.42% since the beginning of January, according to the ICE Bank of America U.S. High-Yield Index. 

However, high-yield bonds have greater default risk than their investment-grade counterparts, meaning issuers may be less likely to cover interest payments and loans by the maturity date.
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“There’s a reason they are called junk,” said certified financial planner Charles Sachs, chief investment officer at Kaufman Rossin Wealth in Miami, explaining how the assets may behave like stocks “when markets misbehave.”
While some say default risk is built into junk bonds’ higher yields, Sach said these assets generally have more downside potential when comparing risk versus reward.
“Short of a distinct strategy, I would not allocate to the space,” he said.

Rising interest rates

The central bank’s continued tightening may present risks for high-yield bonds, according to Matthew Gelfand, a CFP and executive director of Tricolor Capital Advisors in Bethesda, Maryland. 
“Default rates tend to increase as the economy slows,” he said. If the Fed keeps raising rates to cool the economy, some challenged junk bond issuers may struggle further, especially if the economy slows or goes into a recession, Gelfand said. 

Default rates tend to increase as the economy slows.

Matthew Gelfand
Executive director of Tricolor Capital Advisors

“Moreover, some junk issuers who need to refinance maturing bonds might be less able to do so at higher interest rates, leaving default as their only choice,” he added.

Comparing the ‘spread’

When assessing high-yield bonds, advisors may compare the “spread” in coupon rates between a junk bond and a less risky asset, such as U.S. Treasurys. Generally, the wider the spread, the more attractive high-yield bonds become.

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With high-yield bonds paying that 7.5% or so as of May 17, an investor may receive $75 per year on a $1,000 face value bond, whereas the 7-year Treasury, currently offering 2.99%, provides $29.99 annually for the same $1,000 bond.
In this example, the yield spread is roughly 4.51 percentage points, offering a so-called income premium of $45.01, which is $75 from the high-yield bond minus $29.99 from the Treasury.
Over the past 40 years, the average spread between these assets has been about 4.8 percentage points, according to Gelfand, making the narrower spread less appealing.

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Since 2010, the Social Security Administration’s funding has declined while the number of beneficiaries it serves has grown.
The federal agency’s already thin resources were further challenged during the Covid-19 pandemic, when long waits on its toll-free number became the norm.
This week, Congressional leaders held a hearing to explore ways to help resolve those issues.

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Many people who have dialed the Social Security Administration’s toll-free number during the Covid-19 pandemic have faced long wait times.
In an effort to alleviate the customer service issues, Congress this week held a hearing to identify ways in fix the problems.

The issues are something leaders on both sides of the aisle are hearing from constituents about regularly, according to Tuesday’s testimony on Capitol Hill.
“In my home district in Oklahoma, seniors are completely unable to reach the Social Security Administration by phone,” said Rep. Kevin Hern, R-Okla.
“As a result, my elderly constituents end up calling my staff after many failed attempts to call the office at the Social Security Administration,” he said. “By extension, we have become the Social Security Administration call center.”
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The SSA failed to provide adequate customer service even before the pandemic due to the fact that its budget has not kept pace with inflation, according to Rep. John Larson, D-Conn. He serves as chair of the House Ways and Means subcommittee on Social Security.

Wait times to receive an answer on Social Security’s toll-free number have increased over the years, even prior to the pandemic. In 2010, the average wait time was around three minutes. That increased to average wait times of 20 minutes in 2019, 16 minutes in 2020 and 13 minutes in 2021.
Since 2010, the federal agency’s budget has fallen 14%, adjusted for inflation, while it has 13% fewer employees, he said.
The agency also closed 67 field offices, cut its hours at existing offices and postponed updates to its technology and phone systems.
Yet since 2010, the number of beneficiaries participating in the program has jumped by 21% to 65 million, from 54 million .
Social Security’s customer service delays can have serious consequences.
Between fiscal years 2008 and 2019, more than 109,000 applicants for disability benefits died while waiting for appeals, according to the Government Accountability Office.
“Thousands more have died waiting for their decisions since then,” said Rebecca Vallas, senior fellow at the Century Foundation.

“Delivering on Social Security’s promises also requires ensuring that eligible individuals and families are able to access SSA’s vital programs in their time of need,” Vallas said.
The onset of the Covid-19 pandemic led Social Security to close its field offices to in-person meetings due to health and safety concerns, which put further strain on its services.
On April 7, Social Security reopened 98% of its 1,200 field offices. Yet just about 50% to 60% of its staff currently work on site in those locations, according to Grace Kim, deputy commissioner for operations at the Social Security Administration.
“SSA has been underfunded for too long,” said Kim during her testimony. “Without an adequate level of funding, we will not be able to continue our level of service or improve service to the level that really I would want to see us be able to deliver to the public.”
More money would enable the agency to fund hiring, overtime for existing employees and upgrade its technology, she said.

“Those are the three key areas that I see need to be funded to carry out our mission, and do it in a way that does not burn out our employees, because our employees are dedicated public servants,” Kim said.
President Joe Biden’s proposed budget for 2023 includes increased funds aimed at helping Social Security resolve its customer service issues.
Separately, Larson has proposed a bill to reform the program, titled Social Security 2100: A Sacred Trust, which seeks to set stricter requirements before field offices are closed, among other changes.
Other suggestions for improving the agency’s services were mentioned during the hearing.
That includes the creation of a beneficiary advocate position within the agency to help ensure Americans’ concerns are voiced within the agency. This would be similar to the taxpayer advocate position that exists within the IRS.
Advocates also called for reducing delays for Social Security disability coverage, as well as making it possible for Supplemental Security Income, or SSI, applicants to be able to apply for benefits online.

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Gen Z and millennials, like millions of other Americans, are looking for a new way to work.
Stressed and burned out, many have walked away from their jobs. Others still plan to do so, according the Deloitte Global 2022 Gen Z and millennial survey.

Some 40% of Gen Zers and 24% of millennials would like to leave their jobs within two years. About a third would quit without another job lined up, the global survey found. More than 14,000 Gen Z members and over 7,400 millennials from 46 countries were polled between November and January.
Pay was the No. 1 reason younger people left their jobs in the last two years, followed by feeling the workplace was detrimental to their mental health and burnout. Some 46% of Gen Zers and 45% of millennials reported feeling burned out due to their work environment.

When choosing a new employer, good work-life balance and learning and development opportunities were the top priorities. About three-quarters would prefer a hybrid or remote work situation.
They are also willing to turn down job offers that don’t align with their values. In addition, those who are satisfied with their employers’ environmental and societal impact, as well as their efforts to create an inclusive culture, are more likely to stay with their employer for five years or more.
“The expectations of business to drive societal change [and] environmental change has never been higher,” said Michele Parmelee, Deloitte Global deputy CEO and chief people and purpose officer.

Older generations may not have expected organizations to take a stand on social topics, but younger generations now do, she added.
“They are more empowered to ask for things,” Parmelee said. “They have always demonstrated they are willing to leave … and they expect more.”
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Climate change ranks high as a concern among Gen Z and millennials, with about three-quarters agreeing the world is at a tipping point in responding to climate change. Only 15% of Gen Zers and 14% of millennials believe large companies are taking substantive actions to combat the issue, the survey found.
A year into the Great Resignation, also known as the Great Reshuffle, employers are responding to what they’re hearing from workers and job seekers. Millions of Americans have quit their jobs, with a record 4.5 million walking away in March alone.
Companies are looking to add flexibility around hours worked and location. Some 43% of companies are offering hybrid models, PWC’s Pulse Survey of C-suite executives found. Benefits focusing on financial and mental wellness are becoming more popular, and other perks like four-day workweeks, sabbaticals and work-from-anywhere are popping up.

In order to stay competitive, especially when it comes to attracting and retaining the younger generations, employers should implement those hybrid work strategies, Parmelee said.
They should also prioritize climate action, and empower their employees to help fight climate change, as well as support better workplace mental health, Deloitte’s survey suggested.
That can entail being transparent about the decisions the company is making, being clear about mental health benefits and having a plan to combat burnout, Parmelee said. For instance, Deloitte has “disconnect days,” where the entire company is given the day off.
“It’s also creativity around certain benefits that really drive to the heart of what the concerns are today,” she said.
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Gary Gensler, Chair of the U.S. Securities and Exchange Commission, takes his seat before the start of the Senate Banking, Housing, and Urban Affairs Committee hearing on Oversight of the U.S. Securities and Exchange Commission on Tuesday, Sept. 14, 2021.
Bill Clark | CQ-Roll Call, Inc. | Getty Images

SEC Chair Gary Gensler is testifying in the House Appropriations Subcommittee on Financial Services and General Government at 10 a.m. ET Wednesday.
The head of the Securities and Exchange Commission is likely to face questioning by several House members who are unhappy with his aggressive regulatory agenda, which some believe is now threatening to inundate the business world with a tidal wave of new rules around climate disclosure, ESG, shortening the settlement cycle, updating electronic record keeping, cryptocurrencies and many other issues.

“Judging by the first quarter, Washington’s policymaking center of gravity in 2022 may be the Securities and Exchange Commission (SEC), which issued 16 proposed rules in the first three months of the year,” Kenneth E. Bentsen, Jr., president and CEO of the Securities Industry and Financial Markets Association said in an April 15 editorial in The Hill.
That may only be the beginning. Bentsen noted that last fall, the SEC released its list of upcoming new rules with 54 separate items on the list.

A plea for more money, particularly for enforcement

On the surface, these are routine budgetary hearings, part of Congress’ oversight of federal agencies. The President Joe Biden’s 2023 budget calls for an 8% increase in the SEC’s funding, but Gensler will ask for more money, even though the agency is primarily funded by fees on securities transactions.
“The sheer growth and added complexity in the capital markets continue to necessitate greater resources for the SEC,” Gensler said in prepared remarks for the subcommittee, noting a particular need for more staff at the Division of Enforcement. 
“The additional staff will provide the Division with more capacity to investigate misconduct and accelerate enforcement actions,” Gensler said.

Gensler’s agenda is aggressive. Wall Street is not happy

“This is one of the largest regulatory agendas we have seen from the SEC in many years,” Amy Lynch, president of FrontLine Compliance and a former SEC compliance official, told me back in February.
Since then, the agenda has only gotten bigger. Gensler has proposed rules on cybersecurity risk management, loaning and borrowing of securities, reporting of short positions by investment managers, shortening the settlement cycle for stock trading, pay versus performance for corporate executives, enhanced disclosure around special purpose acquisition companies (SPACs), as well as enhanced disclosure around insider trading and corporate buybacks.
David Franasiak, an attorney with Williams & Jensen who follows corporate issues in Washington, told me corporate America is starting to push back.
“He is likely to receive supportive comments from Democrats, while the Republicans are going to say this is too much, too fast, too soon,” he told me.
Environmental, social and governance (ESG) and climate change: In one of his most controversial proposals, Gensler has put forward a new rule on climate change disclosure that would require registrants to provide climate-related information in their registration statements and annual report
The Republicans, Franasiak told me, “will see all this climate disclosure as outside the reach of the SEC.”
Separately, Gensler is also seeking disclosure about diversity of corporate board members and nominees, as well as  additional disclosure on how companies manage their workforce.
Crypto and bitcoin ETFs: There is also the crypto crowd. They are furious that Gensler has made it clear he is opposed to a pure-play bitcoin ETF, while supporting bitcoin futures ETFs. 
Here, however, Gensler may be well prepared to defend his cautious position on crypto.
Franasiak said that if asked Gensler is likely to highlight the recent threat to the investing public from the stablecoin debacle and will likely note the need for increased enforcement efforts.
“Given the recent disasters around stablecoins, he may have some cover,” Franasiak told me. 
In his prepared remarks, Gensler hinted he would adopt just such a position. “The volatility in the crypto markets in recent weeks highlights the risks to the investing public,” he said.

Wall Street: We don’t have enough time to respond

The sheer quantity of regulations is one issue, but corporate America is also complaining the SEC is not giving them enough time to respond to the proposed regulations.
Generally, the public has at least 60 days to comment on a rule after its publication in the Federal Register, and in certain circumstances that can be extended to 90 days. However, under Gensler, the SEC has often shortened the comment period, with some as short as 30 days.
“[W]e are limited in our ability to conduct a robust analysis and provide meaningful feedback by the SEC’s shortened comment periods,” Bentsen said. By rushing the process, “the SEC is shortchanging the regulatory process.”
SIFMA and two dozen organizations recently sent a letter to the SEC asking for more time to consider the agency’s regulations.
The climate change disclosure proposal, for example, was originally published in the Federal Register on April 11, asking for comments on or before May 20. On May 9, the comment period was extended to June 17, after which the commission could modify the rule and put it out for further comment, or they could go to a final rule-making stage. 

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Amid market turmoil, there’s a term that analysts often start throwing around: investor or market capitulation.
It generally means a point at which investors throw in the towel and sell, basically giving up on the asset and the hope of recouping lost gains. Generally, capitulation happens at a time with great uncertainty, market volatility and lack of confidence from investors.

“They’ve kind of figured that they’ve absorbed all the losses that they can, and they don’t see a future, so it’s finally time to pull the plug and get out,” said Jason Steeno, president at CoreCap Advisors & CoreCap Investments in Southfield, Michigan.
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Usually, this kind of selling is based on fear, according to Shweta Lawande, a certified financial planner and lead advisor at Francis Financial, a New York-based firm dedicated to serving women, couples and those getting a divorce.
“They’re worried that they won’t be able to recapture the money that they lost by holding the stock,” she said. “All of that selling among investors causes the price of the stock to fall even further.”
What comes after capitulation
It is something that analysts and big investors watch for because it can point to the bottom of a down market cycle, potentially signaling better days ahead. But it can be difficult to identify when it’s happening and is more easily spotted in retrospect.

“What that short-term drop is usually followed by is a rally in the stock price,” said Lawande, adding that this upward movement locks in losses of those who sold on the downswing.
For most retail investors who are saving and putting money in markets for the long term, it can be a scary moment, but one that warrants little action, according to financial advisors.

“I’m a huge believer in staying invested,” said Steeno, adding that it’s been shown many times that if you pull assets out on the market’s worst days, you miss some of the best recovery days which can hurt your portfolio in the long term.
In addition, market downturns can also be opportunities for investors, said Lawande.
“If a stock is being drawn down by investors reacting to fear, this might be a good time to purchase that stock in their portfolios so they can take advantage of the lower price,” she said. She pointed out that investors that sell at a discount can harvest those losses for tax purposes to offset gains that they have in the future.
Stick with your plan
Of course, this can be easier said than done when markets are so choppy.
In this situation, Steeno advises that his clients return to their plan, which was generally made when markets were performing better and there was less emotion involved.
“The reason there’s a plan is for times like this,” he said. More

Multiple days of stock market losses may tempt investors to sell.
If you do, you may miss out on the market’s best performance.
Trying to time the market will probably result in investors actually missing out on very good days, one expert says.

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Multiple days of losses may tempt some stock investors to sell and run for cover.
But that is exactly what you should not do.

The reason: Days when stocks suffer big losses are often followed by days when they recoup. If you sell, you may miss the upside — and that will cost you.
“You tend to see down days being followed by very, very strong days,” said Jordan Jackson, global market strategist at J.P. Morgan. “Those strong days are really, really important in terms of weathering the volatile storm.”
On Tuesday, the S&P 500 Index and Dow Jones Industrial Average were poised to attempt to recover from steep sell-offs that led them to have six- and seven-week losing streaks, respectively.

The S&P 500 is down about 15.9% to date in 2022, while the Dow has slid 11.3% thus far this year.
Still, even the biggest swings point to the need to stay the course, according to Jackson.

On April 29, the worst day for the S&P 500, the market was down 3.6% for the day. Then, five days later, you had the best day on May 4, with a market rally of 2.99%.
Moreover, on March 7, the S&P 500 was down about 2.95%. Two days later, on March 9, the index was up 2.57%.
The best and worst days tend to be clustered together, Jackson said.
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“Trying to time the market is likely going to result in you missing out on some really, really good days,” he said.
Staying the course has also proven a more profitable strategy during the pandemic.
Take an investor with $100,000 who sold when the market was down 18% as the onset of Covid-19 began to shock the markets.
If they got back in six months later, they would have just broken even as of last week, according to Jackson. But if they had stayed the course, they would have about $125,000 today.
Admittedly, the recent market drops may be difficult for investors to stomach after last year’s low volatility, where the maximum decline was around 5%.
But normal declines are typically around 14%, Jackson said, which means the turbulence markets are experiencing now is normal.

Investors may also take heart that, from an economic perspective, there are many positives right now, including a strong demand for labor and a low near-term risk of a recession.
But because the outlook for 12 months to 18 months from now is more cloudy, volatility and market sell-offs have picked up, Jackson said.
While it may be tempting to hold more cash in your portfolio, that is not an ideal move as inflation is expected to top 5% this year and 3% next year.
“Cash is going to continue to be a drag on the portfolio when inflation continues to run really high,” Jackson said.

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“Not a single person in this country has paid a dime on federal student loans since the president took office,” former White House press secretary Jen Psaki said in a recent press briefing, referring to the suspension of interest on the debt.
In fact, some borrowers, such as Lea Ceasrine, 28, have kept up their payments all along.

For them, this 30-month moratorium has offered a rare opportunity to make some headway on their loans while no interest accrued.

Ceasrine originally took out a mix of private and federal student loans to pay for her bachelor’s and master’s degrees and graduated with a loan balance near $70,000.
“During the pandemic, I made it my goal to pay down my first loan,” Ceasrine said. Not only the did the Chicago-based podcast producer focus solely on her student debt, but she also beefed up her payments. 
Over the last two years, she brought her outstanding balance down to $54,000.
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Roughly 1.2% of borrowers have kept up payments and chipped away at their loan balances during the extended student-loan freeze, according to student loan expert Mark Kantrowitz, based on repayment data from the U.S. Department of Education. 
Those outlays have also counted toward the 120-payment requirement for public service loan forgiveness, Kantrowitz noted, “effectively reducing the qualifying payment count by a quarter,” he said.   
But now, talk of massive student loan forgiveness is back on the table, leaving these borrowers questioning whether further payments make financial sense.

Ceasrine said she only recently stopped paying as the debate around student loan forgiveness heated up.
“I was paying $1,300 a month, I wasn’t putting anything else toward saving in order to make the maximum payment I could,” she said. “I cannot sustain doing that.”
Plus, Ceasrine said she’s hopeful that there will be legislation to compensate, in part, for a system that largely failed her.
“For the students put in a precarious situation, it’s necessary because we are still at the lower end of the economic ladder and we have not been able to climb up,” Ceasrine said.
“I went to school as a student with no financial support,” she explained. “I took out my first loan at 17 for a college experience that was of no value to me.”
After graduating, “I didn’t make enough money to pay it back.”

Although President Joe Biden has expressed skepticism about sweeping student loan forgiveness in the past, he recently indicated he may, in fact, provide some form of student debt cancellation, according to multiple reports.
“It really does shift the onus on the president to make his plans clear sooner rather than later,” said Whitney Barkley-Denney, a senior policy counsel at the Center for Responsible Lending.
“There’s a time crunch here,” Barkley-Denney said. “People need to make plans for how they are going to handle this loan debt going forward.”

Is it time to stop making payments?

“I would not recommend paying federal student loans at this point,” said Brian Leslie, director of financial planning at Edelman Financial Engines. 
“We don’t know whether or not we will ultimately get to a point of student loan forgiveness, but for right now the cost of playing the ‘wait-and-see game’ is essentially nothing.”
However, it is important to remain disciplined, Leslie said.
“If you’re taking your funds that would otherwise go towards student loans and using it to buy new jet skis or some other depreciating asset, that’s likely not the best use.” 

Consider putting the money toward savings or use it to pay down other outstanding loans, he advised.
“If you have an employer retirement plan and you’re not contributing fully to receive the match, that’s the first place I would go with those dollars.” 
Alternatively, set some funds aside in a high-yield savings account. “If we get to a point where forbearance ends and forgiveness is unlikely, you can always take the money that you’ve accumulated and apply a lump sum toward those student loans,” Leslie said.      
Loan forgiveness remains a long shot, according to Laurence Kotlikoff, professor of economics at Boston University and the author of “Money Magic.”  
“The president doesn’t have the power to unilaterally cancel student debt,” he said. “He can’t just wave a magic wand.”
According to Kotlikoff, Congress would have to pass a student loan forgiveness bill and without 60 votes in the Senate, “I don’t see a path for canceling student loans unless somebody knows something I don’t.”
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