Ushering in a new year tends to inspire many of us to see where we can be and do better. But after the stress of the last few years, it’s no surprise that this year many people are focusing on improving self-care.
Self-care isn't merely about making healthier lifestyle choices, though. Your mind and body are connected to your financial life, and any anxiety you feel about your finances will impact your overall wellness. In fact, nearly a third of people say financial anxiety causes them to feel depressed at least once a month, according to the 2020 Northwestern Mutual Planning & Progress survey.
Here are a few practical ways to incorporate self-care into your financial life.
5 financial self-care tips for 2022
Be in tune with your budget
One of the basics of self-care is knowing yourself and your emotions at any given time so you know when to take care of yourself better. When it comes to your money, think of your budget in the same way: It’s how you know where your finances stand and acts as a game plan for how you spend your monthly income.
“Looking at your budget at the beginning of the year is the perfect time to get a fresh start,” says Jennifer Raess, CFP®, Advice Integration Lead at Northwestern Mutual. “Are there any expenses that you’ve picked up during the pandemic, or other areas you can cut back on to see what kind of extra cash flow you may have?”
At the minimum, a budget helps you make sure your monthly expenses don’t exceed your take-home pay. But it also helps you make room for all the goals you have for your money, including the fun stuff. Here’s one way to break down your budget.
Create financial goals that tie to your intentions
With a clean slate ahead, use the beginning of the year to revisit your financial goals. Getting started can be as simple as pouring yourself a cup of coffee and making space to think about what you really want from your financial life in 2022.
“There tends to be a lot of anxiety around uncertainty, especially around your finances,” says Raess. “Taking that time can really bring you some peace of mind knowing you have this path and that you’re feeling good about where you’re headed.”
Not sure where to start? Set some intentions first. These will be focused on how you want to be versus what you want to do this year. Then see how that trickles down to your finances. For instance, if you set an intention to take better care of your future self, that could mean anything from building an emergency fund to saving more for retirement to paying down debt — or all three.
Also, consider that the pandemic changed your priorities. Instead of international travel, for example, you might be planning a home improvement project. No matter what you’re working toward, Raess says that cutting big goals into bite-sized pieces can make them feel more manageable. You can then celebrate mini milestones as you go.
Partner with a financial advisor
Financial planning isn’t something you have to do alone. A financial advisor can look at your goals both near and in the future and help set up a financial plan to help you get there. Beyond looking at your budget, they can help you figure out how to invest for your future and create a retirement plan that’s personalized to you. The right financial advisor will provide one-on-one advice that’s tailored to your unique situation and show you how your plan can change through different phases of your life.
“Your advisor should be someone who can help guide you and help you stay on track, while giving you a plan you can follow and that feels achievable,” Raess says. Here’s a list of questions to ask an advisor before you start working with one.
Find an accountability partner
An advisor can provide accountability and help give you direction as you work toward your goals, but many people find it motivating to share their financial journeys with friends, family or a community of others who happen to share similar goals.
Think of it like enlisting a friend to be your workout buddy. Share your goals, create benchmarks and checkpoints together, and regularly check in with one another to see how you’re making progress. If you don’t have a friend in mind, consider checking out online communities for people with similar goals.
Explore financial wellness meditation
In recent years, studies have found that long-term meditation can help alleviate stress and anxiety. Popular apps like Headspace and Insight Timer offer a variety of meditations that include guides for reducing financial stress.
Financial mindfulness expands on that concept by encouraging you to visualize yourself achieving your financial goals or to cite encouraging positive affirmations. This may include identity statements such as:
- I am financially comfortable. Money flows easily to me.
- I am regularly saving for my future.
- I am debt-free and thriving.
Raess suggests putting sticky notes around your home that state what your goals are and when you plan to achieve them. “That visualization can help it become more of a reality,” she says. “The more you believe in that, the more you see it, the more it feels achievable so you can keep going in the right direction.”
The goal is to establish a positive mindset, which can set the stage for increased motivation and clearer decision making. Think of it as an additional resource you can add to an action-based financial plan.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
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