Six Essential Steps to Financial Self-Care

The concept of “self-care” encompasses a lot. It’s all the stuff you do to keep yourself well: physically, mentally, and emotionally. It spans not just the activities you love—like eating your favorite breakfast and spending time in nature—but also the things you do because they’re good for you, like getting your teeth cleaned or going to the gym.

One area of self-care you may not hear about as much is financial self-care. Creating an intentional, healthy relationship with earning, spending, and saving money can have immediate, positive impacts on your financial picture. When you’re not stressed about money, it’s easier to have an overall brighter outlook.

To add building financial wellness into your routine, here are six ways to practice financial self-care.

Pay Yourself First

Take care of your future self by setting a portion of each paycheck aside in savings. When it comes to setting savings goals, the sky’s the limit. You can set up savings funds for all your goals, from the practical—like buying a home one day—to the fun, like going on vacation next summer.

If you’re just getting started with saving, start an emergency fund first. With emergency savings, you have a lifeboat in the event of a financial crisis, such as a large, unexpected bill.

Experts recommend putting anywhere from three to six months’ worth of basic expenses into your emergency savings account. But part of financial self-care is setting attainable, motivating goals. So, start with a goal that works for you, such as $1,000. Then, set up automatic transfers into a high-yield savings account to ensure you’re saving consistently toward your goal.

Treat Yourself

Self-care is a lot more than lighting candles or ordering takeout after a particularly long day. Treating yourself is a way to make yourself feel cared for. So be sure you’re factoring self-love into your budget. Set aside a small amount each week or so specifically to do something nice for yourself, and buy the bath bomb—you’ll thank yourself later.

Invest for Retirement

If you aren’t already investing for retirement, now’s 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 contributing 10% to 15% of your gross income toward retirement. But if that’s a stretch for you right now, start where you can. Then, aim to up your contributions by a percentage or two each year; some plans allow you to do this automatically.

If you don’t have access to a 401(k), learn how to invest on your own through an individual retirement account (IRA).

Pay Off Debt

Getting rid of high-interest debt not only has compounding returns for your finances, but it can also make a big difference in your stress levels and how you feel about your financial life overall.

Prioritizing paying off balances that charge high interest—generally speaking, about 8% or more—will save you a lot of money over time. Plus, once those balances are done with, you can dedicate the money you were paying each month toward investing in yourself.

To pay off debt faster, pick a debt repayment strategy that works for you. The debt snowball strategy is where you pay off your debts from smallest to largest. On the other hand, with the debt avalanche strategy, you pay off your debts from highest-interest debt to lowest. Each has its own benefits for staying motivated, but you’ll save the most with the debt avalanche strategy.

Look for Money Leaks

Much 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 money leaks, where money leaves your bank account each month without you even realizing it.

To plug spending leaks, look through your bank account and credit card statements for recurring transactions. Cancel subscriptions that you don’t use. For bills, you may be able to negotiate a lower price by calling your provider and asking them for a discount.

Or, you can outsource the work with Experian BillFixer™. BillFixer comes with an Experian CreditWorksSM Premium Account, and you can use it to ensure you’re getting the best deal and negotiate lower rates on your monthly bills. Negotiators will call your providers on your behalf, and you’ll keep all the savings.

Keep Learning About Finance and Credit

Much of improving your financial wellness comes down to getting informed about the options and resources available to you. For example, achieving financial freedom in retirement hinges on knowing how to invest through tax-advantaged retirement accounts like 401(k)s and IRAs. Achieving homeownership depends on understanding how mortgages work and the credit and income requirements you’ll need to meet.

To integrate learning into your financial self-care, try exploring finance podcasts and beginner-focused finance books. You can also check out the monthly personal financial news from Experian, where you’ll get a look at what’s happening on a large scale and how you can integrate that knowledge into how you manage your money.

While you’re building a mindful financial life, don’t neglect your credit. Start monitoring your credit for free through Experian to learn more about the information on your credit report, including your balances, payment history, and how much of your available credit you’re using. You’ll also be alerted to changes in your credit scores to stay in the know.

The Bottom Line

Setting aside time to take care of yourself financially can reduce your overall stress and help you reach your goals. Beyond matters of basic survival—like paying your bills on time and affording groceries—setting aside intentional time for financial self-care helps you to prioritize mindful approaches to money management, such as setting inspiring saving goals, investing for retirement, and budgeting for the things that boost your mood.

At O1ne Mortgage, we understand the importance of financial self-care and are here to help you achieve your financial goals. Whether you’re looking to buy a home, refinance, or need advice on managing your mortgage, our team of experts is ready to assist you. Call us today at 213-732-3074 for any mortgage service needs. Let us help you take the next step towards financial wellness.