Anxiety is a feeling I know well. My natural default setting—with money and life in general—is nervous. When I finally sought counseling to help me deal, the first thing the therapist suggested was a self-care plan: get adequate sleep, eat well, exercise daily, meditate. In other words, make myself a priority. My stress level dropped almost instantly.
Now a big believer in the power of self-care, I carried the simple notion of honoring my needs first into my finances, too. And, no joke, I’ve never felt so financially confident or empowered after putting these four financial self-care habits into action.
1. I fill up my cup first.
I've long had automatic transfers in place so that my savings account (earmarked for non-monthly expenses) gets fed every month. But I've bumped up my efforts over the last few months, creating an additional budget line item that simply says “emergency fund.” How much I earmark varies from month to month because I’m a freelancer and my income fluctuates, but at least $100 feels doable—and that'll add up to $1,200 after a year.
It’s still decades away, but my husband Mike and I also prioritize investing for retirement before taking care of other financial priorities. One easy way we do that is by enabling a setting in Mike’s 401(k) plan to automatically accelerate our contributions by 1 percent each year. It bumped up last month, and the increase is barely noticeable in our budget. We know even a small amount invested today can add up to huge savings by the time we’re ready to stop working.
Still, sometimes it’s tough to know that we’re prioritizing ourselves while our kids’ college funds only add up to about $1,000. But when I step back and consider the big picture, I shake the guilt. While scholarships and financial aid will be available to my daughters, no such “retirement financing” exists. It's little wonder that "gray bankruptcies," as they're called, are at a record high. (The Consumer Bankruptcy Project reports that between 1992 and 2016, debt among seniors grew five-fold.)
2. I’m my own financial advocate.
While only one-third of job seekers negotiate their salary, a whopping 85 percent of those who do end up getting paid more, according to a recent Jobvite report. With that in mind, I've increased my freelance writing rates by turning down low-paying gigs and negotiating higher rates with existing clients. In the last week alone, I landed $450 in additional income simply by asking for it. I have the right to be paid what I’m worth—and if I don't speak up for myself, no one else will.
I’ve certainly strengthened this muscle over the years. In 2014, I cut a large medical bill in half by negotiating with the hospital billing department. And I'm equally self-advocating when it comes to my credit. I check my scores on Credit Karma every month and annually scan my credit report for mistakes. I’ve yet to find an error, but will be ahead of the game if one ever pops up.
3. I nurture my financial confidence.
Five years ago, after a poorly planned cross-country move and a stint of unemployment, we completely bottomed out financially. Our savings account was near empty and our credit cards were maxed out. It became clear that if we didn't get our financial act together, we wouldn't be able to make rent.
I immersed myself in personal finance 101, scouring blogs, reading books, listening to podcasts and whipping our family budget into shape. Over and over again, I kept thinking: How did I not know this stuff? We eventually rebounded—thanks to a lot of hard work and us both landing better jobs—but the situation underscored that knowledge really is power. In fact, financial confidence is one of the top predictors of future financial well-being, according to recent research put out by Financial Advisor.
This is something I’ve experienced firsthand. Paying off debt and building up our savings completely rehabbed our sense of well-being and helped us kick off our long-term financial plan.
4. I stay connected.
Once a week, I pour myself a cup of coffee and take a peek at our household budget. We use a spreadsheet and a zero-sum budget. This means that every time we get paid, we "spend" all our money on paper (including savings) so that every dollar has a job, and nothing slips through the cracks. This is especially key during particularly busy seasons in life—whether it’s back-to-school time, summer break or the holidays.
I take stock of how our budget is holding up, keeping an eye on pop-up expenses and any areas of overspending. Then I high-five my husband for our successes, give him a heads up if we went off course and devise a plan to get back on track. The simple act of regularly taking our financial temperature has flipped my mindset from stressed out to totally empowered.