Reframing the way we approach our personal finances can have a lasting impact on your overall wellbeing — just like your virtual meditation classes do.
When you think about self-care, you probably imagine yourself applying a face mask, getting a massage, or curling up in sweatpants with a good book. And while all these things are important to incorporate in our busy routines, self-care isn’t just about the glamorous moments you make for yourself in real-time — it can, and should, also be about setting yourself up for financial success for years to come, too.
The great thing about self-care is that it looks different for everyone. Someone’s Saturday morning run for coffee is someone else’s journal session at a local park — or, better yet, a regular check-up on your finances, savings, and current spending habits.
But it’s time we expand the way we look at self-care. Though we certainly love a cozy night in every now and then, that’s only a source of temporary relief. Financial stress can have a huge impact on everyday life for many of us. Reframing the way we approach our finances can have a lasting effect on your overall wellbeing — maybe even more than your virtual yoga classes do!
Read on for financial self-care tips for a new kind of self-care routine.
1. Reflect on your relationship with money
Your financial wellbeing isn’t just about paying bills on time. It’s about your relationship with money itself, too. Before you get started making active changes to your finances, it’s probably worthwhile to think about your feelings toward money. Do you have financial anxiety? Are you overwhelmed? Stressed? It’s time to reframe any negative thinking patterns.
Debt or no debt, engage in self-reflection about why you might be behaving in certain ways with your money. This could mean journaling, or talking it out with your partner, friends, or a trusted financial planner or other professional, which can be pretty reassuring.
2. Check your bank accounts regularly
You can’t stay on top of your financial health if you don’t know where you stand. While some might be afraid to inspect the damage, checking in with your bank accounts at least once per week is a great way to track your spending, find potentially fraudulent transactions, and stay up to date on your current balance. If you’re not one of the 36% of Americans that check their bank accounts daily, this simple task (although stressful at first) is a good first step toward a clearer view on your finances.
3. Track your income and expenses
In other words, create a budget. No matter if you DIY a spreadsheet or download an expense tracking app, visualizing your income and expenses is a tried-and-true way of understanding where your money is coming from, where it’s going, and how much you have left at the end of every month. So you can make smarter financial decisions.
Some people stick to the 50/30/20 rule — a good starting point that can be altered to fit your DIY lifestyle. The general rule is to spend no more than 50% on rent and necessities (like bills), 30% on daily expenses and “fun” purchases, then save the remaining 20%.
Or, if the 50/30/20 rule isn’t cutting it for you, grab a pen and paper and try the kakeibo method. It’s a unique approach to budgeting, because it allows you to get a deeper understanding of why you might be spending the way you do through journaling.
If you’re new to budgeting, fair warning: your habits might shock you — but it’s all part of the process. Soon enough, you’ll feel more empowered, in control, and become an overall smarter spender.
4. Create *realistic* goals on your road to financial freedom
Financial security may seem far away. But with a set budget, you can create some specific goals that inspire you to tackle what you want head-on. Carve out some time to write some simple short-term and long-term financial goals. Do you want to pay down your student loan debt in three years? Purchase a home in five? Make your goals SMART (specific, measurable, achievable, relevant, and time-bound).
Here are a few examples:
Paying off your remaining student loan balance of $10,000 in two years
Saving a $5,000 emergency fund over the next six months
Saving $25,000 for a down payment on a house in the next three years
By clearly defining what you want and when you want it to happen, you’re more likely to achieve it. And when you break it down into smaller, achievable goals, financial planning doesn’t have to feel so intimidating. For an extra boost of confidence and to make sure it stays at the top of your mind, tape your list of goals to your bathroom mirror or inside the cover of your planner.
5. Up your financial literacy and educate yourself on best practices
We love podcasts because they are a convenient and (usually) free way to get expert knowledge from leaders in the industry. Add some of these to your queue for a fresh perspective!
Money for the Rest of Us: A great resource for those beginning to invest.
The Fairer Cents: A podcast for women, by women.
Stacking Benjamins: Covering personal finances with a humorous approach.
The Mad Fientist: Exploring strategies to achieving financial independence and early retirement.
And if you’re a student or recent college graduate, here’s a roundup of podcasts that are perfect for your entry into the world of personal finance.
6. Prioritize your debt
Thinking about your debt might seem like the opposite of self-care — but to us, the feeling of paying down your loans and credit cards is almost as stress-relieving as a facial. (Almost.) With your budget, goals, and podcast queue in your toolbox, prioritizing your debt will be that much easier.
The fastest way to get out of debt is to pay more than your minimum payment each month, if you can. There are a few different approaches you can take: you can start with the balance that has the highest interest rate, or tackle the loan with the smallest outstanding balance. Or you can consolidate your loans to simplify and get a better, clearer picture of what you owe.
Not to brag, but the Kasasa Loan® is an auto and personal loan with a cool feature called Take-Backs™. You can pay ahead to save on interest, but if life gets in the way and you need those extra funds, you can withdraw them at any time. It might even help you get out of debt faster knowing that your money is there if you ever need it! Ask your community financial institution about making the switch.
7. Do an insurance check-up once a year
Health insurance is crucial, but sometimes your premiums can be a significant monthly, bi-annual, or annual expense. Once a year, check up on all of your plan details and premium costs to make sure you’re adequately protected for the current stage in your life, and consider adding coverage in other areas — like life insurance — that makes sense for you and your family.
If you’re self-employed or manage your own healthcare plan, your state’s Open Enrollment period is an excellent time to review new or similar health coverage options that could end up saving you money in the long run.
Sometimes the best self-care rituals are the ones that aren’t the most Instagram-worthy. But if you incorporate these now, your future self will thank you. The sooner you get started, the more time you have to work on your (SMART) goals — and, you know, try out a new green smoothie recipe.