Embrace Your Financial Angst. Seriously

The economy, interest rates, housing, credit, candidates -- so much for slow news days.

Are you worried? You should be. In fact, we all should be fretting about the state of our finances: It may be the most productive thing we do to weather today's uncertain economic times.

Be afraid. Be very afraid
This threat-onomics approach may sound bully-ish, but there is some sound science behind the benefits of embracing one's concerns.

A Yale University economics professor discovered that financial angst -- specifically, the threat of losing money -- was the most effective motivator for him and other dieters to lose weight. By marrying his private struggle and his professional work, he found that the solution to a well-known behavioral economics shortcoming (that people don't always do what they claim they want to do) was to counter it with the principle that incentives -- in this case, facing a loss of capital -- get people to do things. So, let's review:

• Negative incentives? Check. (That'd be tanking portfolios, diminished savings, endangered quality of life, as if you need a reminder.)
• A goal to strive for? Check. (Averting financial disaster, I assume.)

In other words, want results? Risk some real dough. (The Yale folks even set up a website -- StickK.com -- to help others achieve their goals (or pony up!).) With that out of the way, let's do something constructive with all that built-up angst.

Face your "Frightmare on Wall Street"
Instead of rocking back and forth on the floor in the fetal position, try this behavioral psych 101-style exercise:

Think all the way through the likely outcome of your worst economic fears. Ask yourself: "What would happen if [insert dreaded event] were to actually take place?" Cover all the scenarios that keep you awake at night -- house values tanking in your neighborhood; you or your spouse losing your job; your 401(k) savings remaining stagnant for five years. (Push through the pain. I've got tissues on standby.)

As you perform this fire drill, you're pinpointing specific vulnerabilities in your financial plan.

Congratulations, you've just laid the ground work for your scary-scenario survival "to do" list (write it all down!): The stuff you need to do to improve the outcome of whatever fright you face.

Now you know what you need to do to dampen the effect of those economic jitters. Heck, you may have even discovered that the macroeconomic messes disrupting your sleep are not as big a threat to your way of life as you feared. (If so, there's plenty else to worry about, like baseball scores, your nephew's latest piercing, and the new season of American Idol.)

It's time to deal with it
Go ahead, embrace your angst. Use it as the impetus to revisit your financial plan and kick the tires on your portfolio (see the links below for more guidance on both of those). And remember, no matter what the headlines blare, this is personal, people. You've got plenty of say in how it plays out on your turf.

When The Motley Fool's Dayana Yochim has down time, she often lapses into a game of "worst-case scenario." (If she's ever stranded on a roller coaster, confronted in the wild by a testy pack of llamas, or stuck on Oceanic Flight 815, she has a detailed survival plan already mapped out.) Over at Fool.com it's not just about averting disaster but creating opportunities in the areas of investing and consumer finance.

More from The Motley Fool:

• Recession-Proof Yourself

• Stocks Shall Rise Again!

• Ready Your Job for Recession