Written by Beth Braverman
Published Mar 13 | 6 minute read
Between the pandemic, ongoing inflation and global volatility, people have been living in “crisis mode” for years — and it’s influenced how they think about money.
According to a September 2025 NerdWallet survey conducted by Harris Poll, 64% of Americans believe the U.S. economy will enter a recession in the next 12 months.
“Financial uncertainty is what causes anxiety, and that anxiety directly affects our behaviors,” says Jason Vitug, a financial wellness advocate, TEDx speaker and author. “When you’re constantly hearing that a recession might be coming, that uncertainty doesn’t just pass — it lingers.”
Feeling uneasy is normal. But uncertainty doesn’t mean powerlessness. The first step is understanding how recession anxiety impacts your financial choices and the steady, confidence-boosting moves you can make to counter it.
Despite constant recession chatter, many key indicators suggest stability rather than crisis:
So if the data looks steady, why does recession fear keep rising? A big part of the answer lies in personal history.
Many Americans have lived through multiple major economic crises — the 2008 financial crash, the COVID-19 recession, decades-high inflation and persistent cost-of-living increases.
“Those memories have a tremendous impact on our tendency to have elevated money anxiety,” says Dan Geller, Ph.D., a behavioral economist and author of Money Anxiety. “They become our financial scars.”
Those lingering scars create a type of emotional inflation, making people feel financially insecure even when economic numbers stabilize.
Recent data from the University of Michigan’s Consumer Sentiment Index reinforces this disconnect: Sentiment fell from 74 in December 2024 to 52.9 in December 2025 — a level more often seen during recessions. Pre-pandemic levels regularly hovered around 95–100.
READ MORE: 4 Tips To Help Manage Your Finances in an Uncertain Economy
Recession anxiety doesn’t just stay in your head. It can also show up in your behavior. For some people, that leads to healthy habits. For others, it results in overly cautious choices that hold them back financially. Most experience a blend of both.
Here’s how recession anxiety can shape your habits — for better and for worse:
“When we feel a loss of control, we instinctively try to seize control,” Vitug says. “That can be a good thing in small doses, but living in a hyper-vigilant state for too long can actually harm your financial and emotional well-being.”
Anxiety can create a feedback loop: Stress leads to avoidance or overreaction, which leads to financial missteps, which increases stress even further.
Breaking that cycle requires understanding not just the behavior, but the psychology behind it.
READ MORE: 8 Ways To Recession-Proof Your Money and Continue Saving
Financial fear is deeply human — and deeply predictable. Several well-studied cognitive biases play a role:
Our brains are wired to overfocus on threats. Negative financial news — inflation, layoffs, market dips — sticks longer and feels heavier than positive news. Even brief downturns can overshadow months of steady growth.
The more vivid or recent an event is, the more likely people are to think it will happen again. If you lived through 2008 or the early-pandemic downturn, your brain stores those events as “easily recalled” memories — and therefore likely ones.
In uncertain periods, we overestimate how much our actions can influence external events. This can look like panic-selling investments, aggressively paying down low-interest debt or pivoting strategies too quickly.
And while taking action feels good in the moment, it doesn’t always support long-term goals.
Want to reduce the influence of these biases? Limit news consumption, build predictable routines and revisit long-term plans regularly — all proven tactics in behavioral finance research to balance emotion and logic.
READ MORE: 7 Money Management Tips To Help Plan for Unexpected Expenses
You can’t control the broader economy, but you can control how prepared you feel. Here are some steadying moves that work in any environment:
READ MORE: What Is a High Yield Savings Account? Pros, Cons and How It Works
Stability isn’t about predicting the next headlines — it’s about building a financial life that can weather them. And for most people, that has far less to do with economic conditions and far more to do with habits, buffers and clarity.
True stability comes from:
These aren’t dramatic moves. They’re small, steady behaviors that build resilience over time —and they’re the same behaviors that separate people who feel confident from those who feel constantly on edge.
Economic uncertainty may come and go, but your plan doesn’t have to. Calm, consistent behavior — not forecasts — is what leads to long-term financial confidence.
READ MORE: 10 Steps Towards Financial Empowerment During Inflation
Beth Braverman is a New York-based freelance writer who covers personal finance, careers and parenting. Her work has appeared in dozens of publications, including CNBC, Kiplinger and Consumer Reports. A former senior reporter for Money magazine and Life + Money editor for The Fiscal Times, she has won numerous awards throughout her career, including recognition by the New York Financial Writers Association and the Society of American Business Editors and Writers.