Recent years have seen a rapid proliferation of the conversation around wellness. Among other factors, social media and online communities continue to empower more people every day to take charge of their physical, mental, emotional, and spiritual wellness. But even in this climate, one area still falls to significant neglect for many people: financial wellness.
In the same way that your body needs exercise and sleep, your soul needs connection and purpose, and your mind needs stimulation and rest, your financial health also has crucial needs. And just like those other parts of your life, when your financial wellness falters, it can cause a spiral of adverse effects that spread into other areas.
What Is Financial Wellness?
Financial wellness describes the overall health and well-being of your money life.
Crucially, financial wellness is not a measure of wealth or monetary success. Numbers and metrics alone don’t fully convey one’s financial health. Instead, consider it a matter of balance, contentment, security, and alignment with your long-term financial goals.
When it comes to physical wellness, the way your body looks to others should never be your main focus, although aesthetics may correlate with healthy habits.
The same is true for financial wellness. Healthy finances usually lead to a steadily rising net worth, but that shouldn’t be the primary motivation. Instead, the goal is to feel more at peace with managing your money and reduce the stress and adverse effects that money troubles can bring.
Financial freedom relies on sustainable long-term effort. As with anything that relies on long-term effort, we put ourselves in a better position to succeed when we pay attention to critical maintenance along the way. That’s where financial self-care comes in.
Why Is Financial Wellness Important?
There are two types of financial goals. First, there are the goals that create new possibilities and opportunities, like traveling, buying a house, or pursuing financial independence. Second, there are the goals that help to meet basic financial needs and avoid money-related struggles. — for instance, building up an emergency fund to avoid going into credit card debt to cover an unexpected expense.
All goals and pursuits involving money can be highly mentally and emotionally charged. Whether your main focus is paying off debt, saving for retirement, or striving to achieve financial freedom, there will be many hurdles along the way.
These things take a great deal of thinking, processing, and decision-making. You have to wade through numbers, charts, and seemingly endless financial jargon. To make matters even more fun, we all have a lot of emotions tied up in money due to a mix of cultural messaging, past experience, and present environment.
Working toward money goals can transform your life, but it takes time and isn’t always easy. That’s why it is essential to keep financial wellness in mind along the way.
A bright financial future relies on a healthy financial present.
Financial Self-Care Feeds Financial Wellness
Financial self-care describes a mix of financially healthy habits and behaviors. A financial self-care routine can help you build financial security and stay on track with long-term goals without sacrificing your sanity, security, or satisfaction with life right now.
You take steps every day to look after your physical and mental wellness (or at least, you know, you’re going to start doing that next week, for sure). Why shouldn’t you do the same to manage your financial wellness?
Like those more familiar types of self-care, financial self-care is a practice of maintenance — not necessarily sweeping changes and massive effort. Small steps, regularly applied, that contribute to a healthy relationship with your money.
6 Tips for Practicing Financial Self-Care
In the same way that everyone’s financial situation is unique, your financial self-care routine may not look the same as anyone else’s. But the main focus should always be to keep your financial ecosystem running smoothly, your state of mind calm and focused, and your goals moving forward.
The main focus here is simple, repeatable tasks that help you make your financial world feel a bit better. To start building a self-care routine that works for you, consider some of the following healthy habits for financial wellness.
1. Check on Your Spending
If you keep a monthly written budget, you probably already do this. If not, that’s fine, too, because you don’t necessarily need a budget. Either way, though, it is still a great habit to take a quick look at your spending once in a while.
What many people don’t realize about traditional budgeting is that most of the benefit isn’t planning exactly what you’ll spend and sticking to it. Instead, most of the value comes from awareness — seeing your real spending and understanding where your money is going.
That awareness, more so than a strict spending plan, is the basis for breaking the cycle of the hedonic treadmill. If you’re struggling to save money every month, simply tracking your income and expenses is a fantastic place to start.
2. Learn Something New
While healthy personal finance doesn’t need to be too complicated, our financial education is never truly “complete.” There is always some new term or concept to learn about, and doing so is a great way to expand your financial literacy.
Engaging in continuous financial learning does two main things for you. First, it creates new opportunities to make more informed decisions and manage your money more wisely. Second, it reduces the unknowns. Becoming more financially literate leaves the financial world feeling like less of a big scary mystery.
This education builds confidence and fosters a sense of calm in dealing with your money. The more you understand yourself, the less you need to rely on paid financial planners, brokers, and accountants.
Once in a while, try cracking open a fun money book or blog, or listening to a personal finance podcast. These media can be informative, empowering, and surprisingly entertaining!
3. Set (or Update) a Financial Goal
It is always astounding what one person can accomplish when focusing on a clear, singular target. And this is no truer than with money.
Nurturing your long-term vision is an essential act of financial self-care. Know what you are striving for so that you can build a plan to get there and stick to that plan.
Good financial habits can be challenging to stick with. And it gets even trickier when you don’t have a clear target. So take time to develop and clarify your “why,” and you’ll be able to build much more reliable motivation to take yourself to new places with your money.
And hey, it’s okay to update your goals occasionally to keep things in sync with where you are now and where you want to go next.
4. Do an Accounts Check-up
One of the main things we’ve been trying to tackle here with financial wellness talk is to cut through the noise to find a sense of order and calm. We don’t want our money matters to get out of hand. Good financial health is simple and easy to maintain.
One thing that makes managing money feel next to impossible is having a big messy pile of financial accounts — one checking account, nine credit cards, three retirement accounts, and that weird savings account you forgot about with like 50 bucks in it.
Periodically doing a check-up on your accounts is a gift to yourself. It’s crucial to be aware of where your assets and liabilities are. A check-up can also highlight if there are any accounts you don’t need anymore or can combine. Simpler is always better.
5. Have an Honest Conversation About Money
If you share finances with a partner or family, you should make a point of talking to them about it sometimes.
If you keep your finances solo, it can still help to find a close, trusted friend or family member to talk to about your money occasionally. Either way, honest conversations about money significantly boost a healthy financial life. You don’t have to blast your financial situation to the world, but you don’t have to navigate money alone, either.
Sharing your experience, as well as your fears and frustrations with others, is a great way to find validation and possible solutions. Hearing your story from someone else’s perspective can open up new possibilities, or at the very least, allow them to empathize with you so you don’t have to feel so alone in the fight. Because you’re not alone. Each person’s financial situation is unique. But they all consist of similar struggles, worries, and dreams. And we’re all better off sharing honest conversations about those things.
6. Celebrate Your Progress
Celebrating the joys along the way, both big and small, has a huge positive impact on financial wellness and brings joy back into the equation.
We are all working toward something with our money. That may be getting out of debt, building good credit, growing your nest egg, or simply stocking up a savings account to prepare for emergencies.
Managing your personal finances is difficult. It takes time and energy, and sometimes the results feel miles away. That is why tracking your progress on these big goals is so important.
When you do make progress, be sure to celebrate it! That can be as simple as opening an IRA, setting up a repayment plan for your debts, or checking your credit report for the first time. Even small steps forward are positive progress, and that’s always worth celebrating. Take pride in your wins, and the next one will never be far away.
Making Healthy Finances a Regular Habit
We all have different dreams for our money. Some want a big house and a boat, while others want financial independence and the freedom to escape jobs they don’t love. But at the same time, we all want financial stability, security, and peace.
Money should not be something that drains your energy during the day, then keeps you up late sweating at night. Instead, it is a vehicle for conducting day-to-day business and for shaping the future life you want to live. Along that path, a few essential financial self-care habits can help you maintain financial wellness and a fundamental sense of peace and balance.
This is a great read! We tend to carry such heavy financial anxiety throughout life – whether we have it, don’t have it, what to do with it, how to be more judicious, plan, budget, etc. It’s uplifting to be redirected toward a more healthy and positive stance, and with the guideposts to steer us.
Thank you! This is definitely more the direction I’ve been starting to view personal finance from lately. The goals and numbers and charts and all are great, but there’s so much more to how we feel about money, and the role it takes up in our lives. That’s something I think we all owe a lot more attention to.
I’ve never heard of financial self-care before but I can definitely see the importance of it! I track each of my purchases and label the category of purchase to see if I could have gone without it.
It’s not a very well-established term (yet!) but I think it’s important to focus on our financial health in much the same way we do our physical and mental health. Sounds like you budget the same way I do! Don’t prescribe it, just come back to check in on it and see if anything should change going forward.