Tips for Financial Self-Care
By Guli Fager, MPH
If you feel like every time you scroll social media, read the newspaper, or flip through a magazine you see an article on “Self-Care,” it’s not just your imagination: for 2021, Google News counted 42 million results for “self-care”, a huge increase over 2019, when there were just 10 million hits. The COVID-19 pandemic has brought the term into popular use, with widespread illness putting self-care on the front burner for many people like never before. Self-care strategies can include pleasant activities like taking a bath, meditating, reading for pleasure, or spending quality time alone, to more drastic actions like quitting a miserable job without another one lined up—Great Resignation, anyone?
Self-care is essential. Self-care is also radical act, particularly for marginalized people. One form of self-care doesn’t get as much attention as the others–financial self-care.
Financial health is a lot like sexual health—incredibly important yet almost never taught in school. I like to define financial self-care by paraphrasing the World Health Organization’s definition of self-care:
Financial self-care is the ability of individuals, families and communities to promote financial health, prevent financial disaster, maintain financial health, and to cope with financial setbacks or emergencies with or without the support of a financial services provider.
In my two decades of experience as a sex educator, I saw countless people who were in anguish because they were afraid, ashamed, or felt guilty about their identity or behavior. The emotions surrounding money and financial decision-making are similar to what many people feel about sex. Those feelings can lead to avoidance, secrecy, and risk-taking. What I know about sex ed –- that preventing negative outcomes isn’t enough to get people to a state of wellness – is also important for financial self-care. Most people can rattle off a list of financial “Don’ts” but are they able to identify what they can do to facilitate financial wellness?
Financial self-care strategies should be tailored in a way that best fits the individual, couple, or family’s, particular situation. Here are some suggestions to try in 2022 that can be useful for anybody, no matter where they are on their journey.
Set a financial intention for the year. The last two years of pandemic living have forced many of us to unintentionally and dramatically reduce spending in some areas (like meals out, happy hours, and travel). What would you like to do with this extra financial capacity? What will make you feel rewarded for your work and see the impact you want to have in the world? Here are a couple of examples:
“I want to be more generous.” Set up a recurring donation to a few organizations you care about or increase ones you already make. You probably won’t notice an extra $20 or $30 coming out of your account each month, and regular donations are critical to keeping nonprofits on strong financial footing.
“I want to honor my body and keep it healthy.” It’s important that some of what you earn pays for activities that sustain you. Deprivation and over-saving can lead to impulse spending to “treat” yourself. Book regular massages, join a gym that has classes that make you happy, or sign up for a meditation class—pick something that will nourish you.
“I want to reduce my spending.” After using Mint to track my expenses (see #2 below), I realized I spent a lot of money at thrift stores, and often wound up with stuff that I didn’t keep for long. I set a yearly limit on how much I would spend, so I could still have fun playing dress-up but not go overboard and end up re-donating much of what I bought.
Track your expenses for 3 months. One of the most interesting ways to learn about the role that money plays in our lives is to look at our data! Reviewing your transactions will give you some insight into where you spend and identify any areas where your spending might be out of line with your intentions. It will also remind you of subscriptions you may not want anymore, or bank or other fees that you can avoid. Mint and GoodBudget are free; You Need a Budget (YNAB) offers a free trial.
Monitor your credit and work to improve your credit score. If you have consumer debt, like credit card balances, pay them down first.
Save enough cash in an emergency fund to cover 3 months of expenses, plus some savings for the next big expense, like a car or a home improvement.
Save at least 5-10% into your company’s retirement plan and invest this account in a target retirement fund. If your company offers the option to make “Roth” contributions, this will be a long-term benefit for most people. If you don’t have a plan with your employer, you can open a traditional or Roth IRA yourself.
If you have kids, check your life insurance! You need a personally owned policy that would pay 10-20 times your annual salary in case of a premature death. An independent insurance provider can help you get the best policy for the least cost.
Not sure how these fit for your situation? Not everybody’s situation is a do-it-yourself project! With financial advice, I hear from many people that they value having a trusted professional “on their team” who they can turn to for help.
Finding an advisor that feels like a good fit can be a real challenge! You are welcome to schedule a conversation with an advisor at our firm by clicking here- https://go.oncehub.com/tolerfg – at no cost and no obligation – or check out our website to see if we might be a good fit. We love working with women and nonbinary folks, professional practice owners and progressive leaders.
Frequently Asked Questions About Financial Self-Care
What is financial self-care?
Financial self-care is the practice of improving and protecting your financial well-being through intentional habits like budgeting, saving, investing, reducing debt, and preparing for emergencies. It focuses on creating long-term financial wellness and reducing money-related stress.
Why is financial self-care important?
Financial self-care can help reduce stress, improve financial stability, prepare for emergencies, and create more freedom and confidence in daily life. Healthy financial habits also support emotional well-being and long-term security.
How can I start practicing financial self-care?
You can begin by setting financial goals, tracking expenses, building an emergency fund, paying down high-interest debt, contributing to retirement savings, and reviewing your credit score regularly.
What are examples of financial self-care habits?
Examples of financial self-care include budgeting, saving automatically, limiting impulse spending, reviewing subscriptions, monitoring credit, investing for retirement, and spending intentionally on experiences or services that support your well-being.
How do I create a financial self-care plan?
Start by identifying your values and financial goals. Then review your spending habits, create realistic savings targets, automate important financial tasks, and make adjustments that align your money with the life you want to build.
Why should I track my expenses?
Tracking expenses helps you understand where your money is going, identify unnecessary spending, avoid hidden fees or subscriptions, and make more intentional financial decisions.
What are the best apps for budgeting and expense tracking?
Popular budgeting and expense tracking tools include Mint, Goodbudget, and You Need A Budget (YNAB).
How much should I save in an emergency fund?
A common recommendation is to keep at least three months of living expenses in an emergency fund, along with additional savings for major future expenses like home repairs or vehicle replacement.
How much should I save for retirement?
Many financial professionals recommend saving at least 5–10% of your income into retirement accounts such as a 401(k), Roth 401(k), or IRA, especially if your employer offers matching contributions.
What is a Roth retirement contribution?
Roth retirement contributions are made with after-tax income, allowing investments to grow tax-free over time and potentially providing tax-free withdrawals in retirement.
Why is life insurance important for parents?
Life insurance helps protect children and dependents financially if a parent dies unexpectedly. Many experts recommend coverage equal to 10–20 times annual income for families with children.
How can I improve my credit score?
Improving your credit score often starts with paying down credit card debt, making payments on time, reducing credit utilization, and monitoring your credit report regularly.
Can financial self-care improve mental health?
Yes. Reducing financial uncertainty and building healthier money habits can lower stress, increase confidence, and create a greater sense of control and stability.
Do I need a financial advisor for financial self-care?
Not everyone needs professional help, but many people benefit from working with a trusted financial advisor to create personalized strategies for budgeting, debt reduction, retirement planning, investing, and financial goal setting.
What should my financial intention for the year be?
Your financial intention should reflect your personal values and goals. Examples may include becoming more generous, reducing spending, prioritizing wellness, building savings, or improving financial security.
