7 Ways to Promote Financial Self-Care

Obtaining optimal mental well-being goes beyond treating ourselves. It involves overcoming stress and some of our biggest fears. This is where financial self-care can play a massive role.

Conquering financial stability has been found to ease stress and anxiety. It allows an individual to relax their mind and feel secure in their abilities. Not to mention, it can help you out in the future. Allowing you to move towards your lifetime goals and feeling safe in the changes that are bound to come.

Financial self-care is just like any self-care practice. It’s important for maintaining our everyday mental wellness and promoting a better future for ourselves. For this reason, we’re going to explore 7 ways you can begin promoting financial self-care.

1.) Keep Track of Your Pay Stubs

Before you start doing anything with your money, it’s vital to know how much you have coming in. Of course, this can vary from month-to-month depending on your position (especially if you freelance).

A good way to get an idea of your income is to calculate how much you have after taxes. To calculate this, keep the following in mind:

  • 401(k) contributions
  • Employee benefits
  • Insurance premiums
  • Social security

For those who do get paid irregularly, we suggest calculating your average income. Or, if you want to play it safe, some opt to only note their minimum guaranteed income.

2.) Keep Track of Your Spending Habits

Now that you know how much money you’re bringing in, it’s important to figure out how much is going out of your bank account. This is probably a lot simpler as all you’ll need to do is find your debit and/or credit card statements.

Generally speaking, you’ll want to see how much you’re spending in three categories:

  • Necessities - Food, rent, bills, etc.
  • Entertainment - Eating out, purchasing products you want, social events, etc.
  • Your Future - Investments, savings, debt payments over the minimum.

    While everyone is different in their spending habits, there are ways to make yourself more financially secure. We suggest making necessities a top priority. Following that, consider your future self and how you can improve in this regard. Finally, treating yourself to entertainment is always important, but not a top priority.

    3.) Develop a Goal for Future Spending Habits

    Once you have a good understanding of your monthly financial priorities, start to set goals for yourself in the future. Again, these will look different for everyone, but there are a few things to consider.

    For example, if you’re stuck in student debt, it may be in your interest to start paying off as much as possible. With that, you’d want to consider how much money you can put towards the payment monthly.

    Maybe you’ve been wanting to develop a blog, but never had the extra income to get things going. Well, if you put away just a bit of your income monthly towards this goal, you’ll reach it quicker than you expected.

    It’s little things like this that can get you feeling more confident in the future. Not to mention, it may help promote motivation for you in the present.

    4.) Prioritize Your 401(k)

    While your 401(k) is definitely not something to completely rely on, it can have benefits you may not be considering. For example, your employer may offer a 401(k) employer match you haven’t used yet. If that’s the case, there’s no reason not to go ahead and sign yourself up.

    You also might have some old 401(k)’s lying around. If so, there’s no reason not to make use of them. This could mean bringing them to a new employer plan or, if you don’t have that option, put the money in a savings account. 

    5.) Pay Off Your Debt

    Having debt can be one of the biggest stressors someone has to deal with. The fact that it’s usually a long-term financial commitment makes it more of a burden than other aspects of our finances. For that reason, if you have the ability to, pay off as much of your debt as possible.

    There are two strategies to doing this. The first is by paying off whichever debt holds the largest interest rate. The second is by paying off the smallest outstanding balance.

    Keep in mind the longer you have debt, the more interest you’re paying on it in the long run. With that said, it’s best to pay off more than the minimum required payments, if you can.

    6.) Develop an Emergency Fund

    Most Americans don’t have an emergency fund and this can prove to be a huge stressor when the time comes where you’ll need one. For this reason, building an emergency fund is an ideal way to make yourself secured in the future.

    Generally speaking, it’s recommended that you have between three to six months’ worth of your income ready at any given time. Of course, not everyone is going to be able to meet that.

    It’s okay to start small and work your way up. If you haven’t started on your emergency fund, set a small goal for yourself such as keeping $1,000 back up. From there, you can move to $2,000 and so-on.

    7.) Invest in Your Dreams

    Finally, in order to truly promote well-being, you’ll want to invest in your dreams. Whether it’s purchasing a home or starting your own business, these goals may seem unattainable can be easier reached than you imagined. That is, as long as you develop the right financial self-care for yourself.

    Final Word

    Financial self-care isn’t easy. Especially, if you are in a position where you’re not making as much as you wish to. However, it’s a vital step towards promoting your overall mental wellness.

    If you find you can’t hit every aspect mentioned on our list, that’s okay. Consider what you can do. It’s much healthier to conserve the finances you have control over rather than those you don’t.

    And, if you’re in a position where you’re hungry to make more money, consider what Robert T. Kiyosaki said in his book Rich Dad Poor Dad. You shouldn’t tell yourself, “I can’t afford it.” You should ask yourself, “How can I afford it?”

    Written by: Paul James