No one likes to talk about money, but let’s get down to it because managing your finances is a type of self-care. Think about self-care for a minute. What comes to mind? Probably face masks, meditation, building your self-esteem, and so on. All of these things are part of self-care. But people often overlook financial management as being part of the process. In reality, managing your finances is one of the most important acts of self-care.
The Connection Between Finances and Mental Health
There’s an entire organization dedicated to addressing the connection between finances and mental health, and it sheds some important light on the situation. The Money and Mental Health Policy Institute help explain how the two impacts one another.
In the Money and Mental Health survey, which included more than 5,500 people, 86% of individuals reported that their problems with money had led to worsened mental health symptoms. But why?
Financial instability leads to increased levels of stress, anxiety, fear, and can even lead to a cycle of compulsive spending.
Financial Wants vs. Financial Needs
Think about the things that you’ve purchased in the past week. Eating out at restaurants, online shopping, electric bills, your car insurance. How many of these things were wants and how many were needed? Recognizing the difference is essential.
To practice proper financial self-care, you need to identify where you’re spending your money and the benefits of that spending. Buying something that makes you happy right now, but goes over your weekly budget is not effective self-care. It can be detrimental.
Make sure that you pay for the things you need first. Grocery shopping, gas in the car, your cell phone bill, rent, or a mortgage payment. Then, look at how much leftover money you have – if any. From there, determine how much of that money should be dedicated to “extras.”
When Wants and Needs Overlap
Sometimes, however, wants and needs do overlap. You might want that new winter jacket, and it may also be time for a new one. It’s a careful balance between figuring out what you can afford to spend on these items that make financial management a crucial part of self-care.
When you have a want that is also a need, budget carefully and know that you may not be able to get precisely what you want. Sure, that designer coat may be amazing, but if you can only afford one of lesser value, don’t overspend for the sake of temporary happiness.
The Question to Ask Yourself
When spending money, the best way to determine whether or not you should spend what you’re about to pay is to ask yourself a simple question. “How long will this benefit me, and how long will this make me happy for?”
Buying an impulse item online might make you happy for a few hours or a few days, but in six months, will it have benefited your life? On the other hand, paying your electric bill may not make you happy right now, but next month you’ll be grateful the lights are still turned on.