5 Self Care Tips To Minimize Money Anxiety
Money can be a frequent source of anxiety for many people. In fact, according to a 2019 study conducted by Blackrock, 85% of Americans worry about money regularly. This was before a global pandemic, rapid unemployment, and you realized how up close and personal you were getting with your roommates while working from home.
When we’re trying to prioritize mental health, how are we supposed to stay sane through the pressures we put on ourselves to perform, make money, and maintain our day-to-day lives? Discipline, baby.
We often think of self-care as putting on a face mask but a huge component that rarely gets discussed in this capacity is financial wellness. When having conversations with co-workers, friends, and family, the taboo of money is rampant with the mentality of avoiding rocking the boat.
Here are some tools that we use to keep our money anxiety in check.
1. Ignoring the problem doesn’t solve it
There's so much power in acknowledging where you stand financially, what your credit score is, or that maybe your spending habits have been beyond your budgetary means. By owning up to where you are today, you can make a definitive plan for your financial future.
Sometimes the surface problems are not the real issue. Analyze recurring charges, common spending habits, and all those things you've magically been able to sweep under the rug of avoidance. Practice discipline by taking daily measures to do what scares you the most - check your bank account, review your spending habits, and take into account future spending needs.
By addressing your current financial status head-on, you're shifting your money paradigm from victim to hero. We love a narrative change.
2. Rethink your budget
As life changes, so should budgets. Re-evaluating your spending should be a quarterly habit. What are you spending the most money on? Do you need what's in your budget still? Is there something that you can swap out for a more affordable alternative?
Your beauty cabinet is a great opportunity to evaluate your spending. While it’s wonderful to feel consistent and normal in times of stress, alleviating the pressures of maintaining a 10-step skincare routine and replacing an $80 serum with a just as effective $25 option will help minimize expenses when you need it the most. Try a multi-use product or something that hurts a little less once the payment's been processed.
Of course, there are things that you unavoidably need. You need a place to live, you need food, you need money for transportation. Ideally, these expenses will make up 50% or less of your monthly budget. Prioritize these by setting realistic expectations of what you’ll need to spend to maintain your life at this moment and if your needs exceed 50% of your monthly income, that's okay. Use that number as a target goal for future planning.
A budget is unique to you. We all have different habits that we enjoy, and these are called wants. Whether that's ordering takeout, going thrifting once a week, or spending money on a moisturizer make space for those things. That being said, shoot to keep your "wants" spending under 30% of your monthly income.
Need to start re-evaluating your budget? We’ve made a super-easy-to-use template that already includes all the things you’re probably spending money on (bc we’re in the same boat).
P.S. Customize your budget for what you want to spend money on, but always prioritize your needs first. Include your savings goals in your budget tool, because saving money for a rainy day is money well not-spent.
3. Invest in yourself today for a better tomorrow
57% of Americans don’t invest in retirement funds, stocks, or bonds. If you fall into this category, maybe you don’t know where to start or you think you can’t afford to contribute to a retirement fund or savings account (but that’s probably not the case).
Compounding interest is one of the secrets to having a financially abundant life. What is compounding interest? It’s what happens when you invest a set amount of money that earns interest and you reinvest those earnings so your new money makes money for you. Here’s an example:
- $100: the amount you invest when you open your retirement savings account
- $25: the amount you contribute to your retirement savings account monthly with a compounding interest rate of 6%
- $414: the amount you have in your retirement savings account at the end of your first 12 months You’ve earned $14.
- $50,883: The amount you've earned over 40 years by contributing $12,100. You’ve netted $38,783 off of setting aside $25 a month. That's the magic of compounding interest.
This is one of Troupe's founding principles. We invest in our skincare routines to prevent irreversible damage, but why don’t we do the same with our finances? We’ve made it easy to begin investing your financial future in partnership with Beacon Pointe Wealth Advisors for zero cost.
If you're 18+, you can open your retirement fund with Beacon Point Wealth Advisors today. Seriously. Here's the how-to.
4. Be realistic and set expectations
Daydreaming is important. Setting goals and maintaining faith that you will achieve those goals is a vital tool no matter how you choose to cope with the challenges life inevitably presents all of us. At the same time, understanding what is currently within reach will help keep you grounded while living within your means.
Is your goal to own a home instead of living with three roommates? That rules! This means you need to add financial space in your planning to accommodate this goal. By planning, you set expectations around what you can afford, when you can afford it, and savings goals to get there.
Customize your budget to accommodate your big plans while making sure you have what you need right now to live. Come to terms with the fact that you might not have exactly what you want tomorrow, but by making small changes like not spending $50 eating out and dedicating those funds to your big picture goals you'll get there even sooner.
As you hit new "life achievements” aka, you got that killer raise, you started a side-hustle, or you paid off your car, you can revisit allocating more funds to those bigger goals you’ve been dreaming about.
5. Plan, commit, and don’t feel guilty
If you’ve planned, committed, and acted on a personal goal responsibly, don’t let your subconscious ruin the experience for you. While this is easier said than done, recognize what’s happening. Time to put on a face mask and take out a pen and paper to start journaling why you feel the pangs of guilt or remorse. Some great questions to ask yourself:
- Why do I feel guilty about this purchase? Is it about money, or is it about something else that needs to be addressed?
- What’s my relationship with money?
- When have I felt like this about money before in my life? Am I perpetuating the same habits?
- I am being a money-victim or a money-hero? Did my caregivers behave the same way with money?
- Do I feel this purchase is going to complete me in some way?
- What is the role of money in my life within my past, present, and future?
- What was my parents’ relationship with money growing up?
The start of any wellness routine is always a practice in mindfulness. Money is no different. How we approach our spending habits and money goals is at our discretion, but unraveling your "whys" requires work.
Want to keep in touch with more financial wellness resources? Learn more about our Scout program. Beauty and money have more in common than you think.
Do you have other tools you use for maintaining mental health + money? Share with the class @troupebeauty