What is financial self-care?
The concept of “self-care” encompasses many things. It's all about what you do to stay healthy: physically, mentally, and emotionally. And it's not just the things you do because you like to do them, like eating your favorite breakfast and spending time in nature, but also the things you do because it's good for you, like brushing your teeth or going to the gym.
One area of self-care you may not hear much about is financial self-care. Creating an intentional and healthy relationship between earning, spending, and saving money can have an immediate positive impact on your finances. When you're not stressed about money, it's easier to have a more positive outlook overall.
To add financial wellness to your routine, here are five ways to take care of yourself financially.
1. Pay yourself first
Take care of your future by setting aside a portion of your salary for savings. When setting a savings goal, there are no limits. You can accumulate savings for everything from the practical (such as buying a house someday) to the recreational (such as going on vacation next summer).
If you're new to saving, start by creating an emergency fund. With emergency savings, you have a lifeline in case of a financial crisis, such as a large, unexpected bill.
Experts recommend putting three to six months of basic expenses into your emergency savings account. But part of financial self-care is setting achievable and motivating goals. So start with a goal that works for you, such as $1,000. Then set up automatic transfers to a high-yield savings account to ensure you're consistently saving for your goals.
2. Treat yourself
Self-care is more than just lighting candles or ordering takeout after a particularly long day. Treating yourself is one way to feel cared for. So make sure you factor self-love into your budget. Set aside a small amount every week or so to do something nice for yourself and buy bath bombs – you'll thank yourself later.
3. Investing for retirement
If you're not already investing for retirement, now is the time to start. If your workplace offers a 401(k) plan, start by investing at least enough to exhaust any employer match.
Many experts recommend setting aside 10 to 15 percent of your gross income for retirement. But if it feels difficult now, start where you can. Next, try increasing your contributions by one or two percent each year; Some packages let you do this automatically.
4. Pay Off Debt
Eliminating high-interest debt will not only compound your finances, but it can also make a big difference in your stress levels and how you feel about your financial life as a whole. shared.
By prioritizing paying off high-interest debt (usually around 8% or more), you'll save a lot of money over time. Plus, once that balance is paid off, you can use the money you pay each month to invest in yourself.
To pay off your debt faster, choose the repayment method that works for you. The debt snowball strategy involves paying off your debts from smallest to largest. On the other hand, with the debt buildup strategy, you pay off your debts from the highest interest rate to the lowest. Each method has its own benefits for staying motivated, but you'll save the most with the debt-busting strategy.
5. Look for money leaks
Most of the spending we do each month happens on autopilot: recurring expenses like bills, streaming subscriptions, monthly fees, and prescriptions. These purchases can turn into a drain, with money leaving your bank account every month without you even realizing it.
To prevent spending leaks, check your bank account and credit card statements for recurring transactions. Cancel subscriptions you don't use. For invoices, you can negotiate a lower price by calling the supplier and asking for a discount.
Taking time to care for yourself financially can reduce overall stress and help you achieve your goals. Beyond basic survival issues, like paying bills on time and running errands, spending intentional time taking care of yourself financially helps you prioritize mindful approaches to management. financial management, like goal setting, inspirational savings tips, investing for retirement and budgeting. that improves your mood.
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