There is more to self-care than meditating or creating “me time”. Our physical health is connected to our financial health!
There has been a lot of buzz around self-care in 2020 due to the many changes and challenges we have all experienced this year. But there is more to self-care than meditating or creating “me time”. According to an APA (American Psychological Association) study, our physical health is connected to our financial health. Poor financial health can lead to high blood pressure and other stress-related health issues. Just think, when was the last time you sat down to make sure your finances were getting the same attention as your physical and mental health? Financial self-care is a topic that may seem too big to tackle but we’ve broken it down into a few easy steps to help you get started.
First things first. Creating a budget is key in understanding your cash flows every month. Click here to read our article on budgeting. A budget is not intended to limit the fun and enjoyment in your life, but rather to be a resource that will allow you to be more intentional with your spending. We understand that creating and sticking to a budget can feel overwhelming to start. Try breaking the process down into smaller steps in order to create a habit and stay on track!
With available technology, it is simple to track your spending and to review it online on any device. Your financial institution might have a tool already built into your account, so check with them first. There are also several apps with the ability to sync all of your accounts in one place so you can easily track spending each week. Picking one recurring day and time to review your purchases from the previous week can help you create awareness around your typical spending habits. Click here to see a list of options published by Forbes.
Review your spending habits from the thirty thousand foot view. Doing this will allow you to see what categories are coming in under budget OR where your spending has increased in other categories. Take the time to analyze whether or not the increase in spending was due to a one time purchase or if you are needing to be more intentional about spending during the month. Click here to view and download our free budget worksheet.
In addition, with many people working from home instead of going into an office, budget items such as gas or public transportation costs may have decreased from last year. Have you adjusted your budget to reflect these changes? How about the daily coffee or sandwich that you would normally get at the office? Reallocating these “old allowances” can make room for new goals and spending habits in the new year!
Find ways to lower your current obligations. When was the last time you reviewed your monthly bills? Is there a streaming service that you no longer use or a subscription that you are no longer enjoying? Canceling a service you no longer use can free up money to be used elsewhere! In addition, simple steps like going paperless or setting up automatic payments can lead to discounts on monthly bills.
Review insurance products. When it comes to insurance, no one likes to be surprised by an unexpected medical bill or an out of pocket cost. Taking the time to be sure that your coverage still fits your needs is great, but finding an insurance broker to help ensure that the coverage you need is at a cost that is right for you is also important. There are even Health Savings Accounts that can be paired with certain health coverage options that allow you to pay for medical needs with pre-taxed dollars.
Review debts and other financial obligations. Does a refinance make sense for you? Whether you are looking into student loans or a mortgage, when interest rates are low, it could make sense to lower the interest rate and your monthly amount due. What could you do with extra cash from refinancing?
Review your financial goals. Whether it’s growing your nest egg, paying off a debt, or saving for a big trip, it’s a good habit to check on your progress throughout the year.
When taking time for financial self-care, it is important to regularly review and adjust your needs. These steps are just the tip of the iceberg when it comes to aligning your habits to support future spending and savings goals. It may even be a good idea to seek out professional guidance to be sure that you are not missing any details or opportunities that would improve your current situation.
At Great Waters Financial, we take an educational first approach with all of our communications. We hope that this article was helpful in organizing yourself to take steps to prioritize financial self-care this year.
Whether you are just starting to dive into financial awareness or you are looking into more strategic opportunities to elevate your financial plan we are here to help you figure those things out. Our advisors are ready to help you in any way!