Financial Self-Care Tips to Manage Your Money and Mental Health

By Marnie Kunz

Financial self-care may sound like another wellness trend, but it’s actually a helpful way to keep track of and grow your finances. Taking steps to proactively manage your finances can reduce your stress levels and curb any financial problems before they become too big. Assessing and monitoring your finances can also empower you to make decisions that align with your values and life goals. Whether you feel out of control with your spending or worry about the future, some financial self-care strategies can put your mind - and your bank account - at ease. This article will explore actionable financial self-care tips to help you build a healthier and happier relationship with your money.

For a helpful resource, check out NPR’s Life Kit episode on Financial Self-Care.

Financial Self-Care 101: Understanding Your Finances

Assessing your finances is a crucial part of financial self-care. Tracking your income and expenses will help you see if anything is out of the ordinary and understand where your money goes. 

Tip 1: Know Your Numbers

Regularly log into your bank accounts to check your spending and earnings. You can log into your checking account as frequently as once per day or at a minimum once per week. Make sure you don’t have any unusual or unauthorized expenses and if you do, report the purchase immediately to your bank. 

There are many tools that can help you track your spending and net worth or develop a budget if you want to spend less and save more. As a personal finance student and small business owner, I stumbled into the Rocket Money app and really love it for a simple way to track and categorize my expenses and see my savings and retirement progress. You can link all your accounts, see your financial standings, and get reports on your spending and income trends. 

Knowing your expenses, income, and financial standing is an important part of financial self-care that helps reduce anxiety by allowing you to see where you are at with your current financial situation. It also allows you to take action if you see problem areas or unauthorized expenses. 

Tip 2: Face Your Debt

No one wants to think about their debts but the more we avoid them, often the worse they become, which can force you to think about debt all the time. For your financial self-care plan, be proactive and list all your outstanding debts, including the amounts and interest rates. Develop a repayment strategy - which may include focusing on the highest-interest debt first or consolidating debts into one repayment plan. 

If you have high credit card debt, look for zero-balance cards where you can transfer your high-interest debts. Just make sure you know when the interest rate will increase and by how much. Tracking your spending with an app like Rocket Money can also help you to see areas where you can reduce your credit card spending and when you can allocate more money to debt repayment. 

Debt is one of the biggest sources of financial stress for people, and tackling your debt will help you feel more in control and less burdened. 

Proactive Financial Self-Care: Building Healthy Money Habits

These proactive financial self-care habits will help you increase your net worth and financial security. Managing your finances is more than just trying to make money - it’s about having the time and resources to pursue your passions in life. These healthy financial habits will allow you to allocate resources to your top priorities. 

Tip 3: Create a Realistic Budget

There are many strategies for budgeting but the best tactic is to do what works best for you - whether you use an app, journal, or write on sticky notes. Every month, create a basic budget and allocate funds for needs, wants, and savings. Also, the most often overlooked area is unexpected expenses that are irregular - such as your car breaks or your dog needs to go to the vet. So include some funds for miscellaneous expenses that arise. 

Review and adjust your budget regularly. Following a budget provides structure for your finances and prevents overspending, giving you more peace of mind. 

Tip 4: Prioritize Saving and Investing

Pay yourself first, as the saying goes. Set up automated contributions to your savings and retirement accounts. Even small, consistent amounts make a difference. Just like with fitness, small habits add up to give you big results when it comes to finances. 

Also, make sure you are taking advantage of any employer benefits such as 401K matching contributions. Talk with your employer to make sure you have enrolled in a retirement plan that gives you as much free money as possible. If you are self-employed, set up automatic contributions to go to your retirement account so you don’t miss out on building a stable financial future. 

Savings and investing are great ways to practice financial self-care as they will help you feel more hopeful and less stressed about the future. 

Tip 5: Set Financial Goals

Set financial goals that align with your values and the life you want to lead. Whether it’s a short-term goal like paying off the credit card that you’ve almost finished paying or long-term goals like buying a home or car, write out your goals and you'll be more able to track and achieve them. You can use spreadsheets, budgeting apps, notes on your phones, or other techniques to help you track your progress. 

Goal setting is an important part of financial self-care that will help you feel more motivated and in control of your finances and life. 

Defensive Financial Self-Care: Protecting Your Peace of Mind 

An important part of financial wellness is protecting your money. These strategies will help you protect yourself from bankruptcy and going into debt so you can weather any financial storms without too much stress. 

Tip 6: Build an Emergency Fund

Open a high-yield savings account for emergency savings. Regularly contribute to your emergency fund with automatic withdrawals from your checking account when you get paid. Keep adding to your fund until you have 3 to 6 months of living expenses. 

The exact amount you need depends on your life situation. If you’re a freelancer who lives alone, for instance, you will probably need more savings than a married couple where both spouses have full-time jobs and savings accounts to fall back on.  Make sure your emergency savings is easily accessible and you could immediately withdraw money in an emergency. 

An emergency savings will reduce your stress when unexpected expenses arise and can prevent you from going into debt.This financial self-care tactic will give you peace of mind. 

Tip 7: Protect Yourself with Insurance

Insurance can prevent debt and financial devastation from unforeseen circumstances. Make sure you have adequate health, auto, home/renters, and life insurance (if needed). If you’re the main breadwinner in your household and you have kids, life insurance can ensure your family has enough income if you die. Debt from health expenses is extremely common. Comprehensive health insurance will not only improve your physical health but also prevent you from going into debt for emergencies, surgeries, and medical treatments. 

Tip 8: Regularly Review Your Financial Situation

Financial self-care includes reviewing your financial situation regularly. Schedule time every month to review your finances and adjust strategies as needed. See if you’re on track with your goals and any areas that you may be overspending or have unnecessary subscriptions or other costs that you don’t need. 

Check your credit report for free every year at annualcreditreport.com. For a thorough approach, you can check your credit scores every three months to get a clear picture of your debts and financial standings. 

Tip 9: Plan for Taxes

Plan for tax season so you’re not caught off-guard and stressed out. Check with a tax consultant to make sure you have the correct withholdings amount for your taxes from your employer.

If you’re self-employed, use a bookkeeper or software system to help you track your expenses and set aside a portion of your income for taxes. For self-employed people, a general guideline is to save about 30 percent of your income for taxes. 

Collaborative Financial Self-Care: Seeking Support When Needed

Tip 10: Don't Be Afraid to Ask for Help

If you feel overwhelmed or stuck with a financial issue, reach out for help. A financial counselor or financial planner can help you with advice and an action plan. Talking to someone you trust like a friend or family member can also lift the burden so your worries don’t seem so heavy. Asking for help is one way to practice financial self-care and improve your mindset around your financial situation.

Tackling Finances One Step At a Time

Taking care of your financial health looks different for everyone. I know I just hit you with a lot of suggestions but taking a few small steps every day will make your money management much less intimidating, especially if you’ve been neglecting your finances for a while. Financial self-care empowers you to take control of your finances and your life and will improve your financial well-being and overall mental health. Your future self will thank you for it.

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Marnie Kunz is a writer and personal finance student based in Brooklyn, NY. She is currently a CFP® candidate. When she’s not writing for other people, you can find Marnie on her websites, Runstreet and Book of Dog.