Most people clearly understand physical and emotional self-care — the massage appointment when playing hooky from work, staying hydrated, therapy and other feel-good activities to improve your life.
For some, prioritizing personal needs is challenging but always necessary. So is your financial wellness.
Fortunately, financial self-care is easier to adopt than you think. Here is what the concept means and how to practice it.
What Is Financial Self-Care?
Do you scramble to come up with your monthly rent? Financial self-care helps you budget your money so you never have to worry about paying your bills on time.
A self-care regimen requires planning and goal-setting to set yourself up for financial success. It’s about cultivating ways to spend wisely and create a healthier mindset around money. In turn, you can significantly reduce your anxiety over your finances — especially during rocky economic downturns.
7 Ways To Practice Financial Self-Care
You can achieve financial wellness through money management and new spending habits. However, it’s more than simply budgeting your funds for different needs or wants. Here are seven ways to develop a successful financial self-care plan.
1. Set financial goals.
Are you looking to cover the essentials, invest in your retirement or save for a big purchase or trip?
Setting goals is the first step to financial well-being — the foundation for all spending and budgeting decisions. Once you’ve determined your money objectives, you can develop a strategy to help you accomplish them.
2. Diversify your portfolio.
According to a 2023 Fidelity Investments report, Americans have only 78% of the necessary savings to cover expenses during retirement — a five-point decline from 2020. As a result, nearly 52% will need to make significant or modest lifestyle adjustments to get by.
Diversifying your portfolio is a great way to save for retirement and secure your financial future. Real estate, mutual funds, Roth IRAs and stocks are some of the many ways to invest.
3. Create an emergency fund.
What happens if you get into a car accident and require hospitalization? These occurrences are unexpected and usually expensive. Only 62% of American adults believe they can afford health care.
Set up an emergency fund to cover unforeseen circumstances, such as injury or illness, car repairs or home damage. It could also give you something to fall back on if you lose your income.
4. Cancel underused subscriptions.
How many subscriptions do you have but rarely use? From Amazon Prime to Netflix to Blue Apron, you may not realize what you pay for every month.
Go through your subscriptions and cancel accounts you don’t need. If you have Netflix, Hulu, Disney+ and Peacock but only a few hours to watch TV, decide which streaming services you get the most use from. You can resubscribe if it makes sense for your time and finances.
5. Make your retail returns.
According to a Cosmopolitan study, millennials hold onto an average of three items at $40 annually — about $120 you could have spent elsewhere.
If clothes and goods are piling up on your bedroom dresser, set aside a day to make your returns and seek a refund. Those items add up over time, and it’s an excellent way to replenish your bank account for more necessary expenses.
6. Seek career advancement.
About 63% of Americans quit their jobs in 2021 due to few advancement opportunities. You might also decide to move on if your position lacks professional growth.
A new job with a different company is a chance to grow and earn a higher salary. While you may enjoy your current role, another position could support your financial self-care journey even more.
7. Ask for assistance.
You can always ask for help from a financial adviser if you’re struggling to manage your finances. They will help you uncover areas for improvement and direct your money toward the best investments.
Likewise, turning to a moneywise family member or friend can give you insight into achieving your financial goals.
Ease Money Woes With Financial Self-Care
Managing money is challenging even for experienced savers. However, financial self-care helps improve your spending habits and eases future budgetary constraints.