Feeling better about the economy? The “vibecession” might be ending

What to do if you feel disconnected?

If you’re still feeling financially anxious despite the state of the economy, it’s best to limit your exposure to social media and news since they can often make you feel even worse about your finances. Instead, focus on what you can control. If you haven’t already, start a budget so you know exactly where your money is going each month. Then build an emergency fund, pay down debt and consider increasing your income through side hustles. When your finances are more stable, you’ll feel more secure regardless of the economic condition. 

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While the economy might look strong on paper, the term “vibecession” captures something deeper: the emotional toll of financial uncertainty. 

Vibecession may be behind us. According to a New York Federal Reserve survey, optimism about household finances hit a multiyear high following Donald Trump’s reelection in November. The survey showed that the share of households expecting a better financial situation in a year from now rose to its highest levels since 2020. And with the stock market charging ahead and inflation cooling down, it appears that the worst of the economic downturn may be over.

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According to a Brookings Institution analysis, despite cooling inflation and a strong job market, many young people feel left behind due to growing student loan debt, unaffordability of homes and limited job opportunities. 

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He considers the term “vibecession” to be an offensive oversimplification of how hard it has become to live as a young worker or a young family in the U.S., especially in major metropolitan areas. “Real policy failures have led to a disastrous living situation for anyone who has children or hopes to have children. So, of course, people feel badly about it,” he explained.

Dave Fortin, CFA and co-founder at Boston-based investing platform FutureMoney, agrees. “Though data shows we’re past peak vibecession, the picture isn’t rosy for everyone,” he said. “For the younger generation, home affordability is still a major issue that can cause people to delay major life milestones and have the feeling of being left behind.” 

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