I don’t know about you, but I’ve always been a bit 50/50 on the whole “new year, new you” vibe.
Enticing as the concept is – the idea of a slate wiped clean, a life reset, a chance to start again from scratch – there’s always been an association with judgement. Every year, without fail, my inbox is inundated with so many articles, adverts, and associated rhetoric around the New Year, each piling on the pressure and guilt. As if the efforts of months past weren’t good enough. As if you need to be better, to do more.
And perhaps, to an extent, that’s true. We do need to keep striving to reach our goals. We will need to do more to work in line with our values or to build the life we want, holding ourselves to account where necessary.
Plus, whilst the ’new year, new you’ emails may be frustrating, there’s something lovely and reflective in those countdown days before the year turns. It’s an excuse to mull over times gone by, to think about the successes and the challenges, to consider what we want to let go of, hold onto, or improve. None of us need permission to try again, but as one year becomes the next, there’s a quiet sense that our ambitions may be just a little closer to realisation – at least if we keep going.
When it comes to our money, the New Year is also often a reason to take stock, to reappraise, to look forward, and to decide what we want – or need – to do to get ourselves on track financially.
Financial resolutions are amongst the most commonly set each January – particularly saving more or spending less. And with the pressures of the pandemic giving us a heightened sense of economic consciousness, it’s no wonder that 2021 is expected to see more and more of us paying attention to our money and considering how best to manage it.
If your finances are on your to-do-list for the New Year because you want to be better with money, change a habit, learn how to invest, save up for something special, etc – then we’ve pulled together a what, why and how for financial self-care in 2021.
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But first off, what is financial self-care?
Self-care is defined as the holistic approach to your body, mind, and social environment. Financial self-care takes that a step further to recognise how money affects your wellbeing, especially your mental health.
As we grow up, we’re all taught why it’s important to eat the right foods, take enough exercise, drink plenty of water and so on. We learn things like how to set boundaries, how to deal with pressure, how to develop good habits or shake bad ones, as well as how to set goals and achieve them. These are all skills that contribute to our sense of overall wellbeing and we can support them with acts of self-care – whether that’s an afternoon with friends, wine and a face mask, saying no to a party you’re too tired to go to, or going for a 12-mile run along the river.
Many of us are not taught about money, despite it being one of the biggest causes of stress amongst adults. Unless we have a financial advisor, we tend to glean what we can from parents, occasionally broach the topic with friends, and muddle our way through via independent learning, our work, and probably Google. Financial self-care is all about similarly learning what helps you feel in control of your money, being able to assess and plan so you can reach your goals or protect your boundaries. It can help boost your financial resilience and ensure you have a positive relationship with your money, rather than a stressful or emotional one.
Of course, financial self-care looks different to everyone. There is no one-size-fits-all solution. It’s about finding what’s right for you. But to help you work out where to begin, we’ve pulled together ten things you can do to start practicing self-care for you and your money.
1. Take stock and budget
The root of anxiety is uncertainty. Practicing financial self-care therefore starts by knowing your situation – taking the time to understand what you have in terms of incomings and outgoings, what you have in savings, and what debts you have as well. This puts you in a position to budget – to take control of your money and plan for what you want. Budgeting may sound boring, but by creating a spending plan, you’re also exploring what matters to you. Yes, you’ll have essential spending – like bills and mortgage payments – but you’ll also be able to see what non-essentials actually mean something to you, whether that’s a streaming subscription, a regular charity donation, or an investment opportunity.
2. Keep your money visible
We all know that ostrich feeling when you’re low on funds. You don’t want to check your credit card because of the damage done last night. You avoid logging into your bank account because you don’t want to see how low it is when there’s so much month left. Perhaps there’s been a market shift and you don’t want to see how your investments are faring. It can be tempting to ignore your money – especially when you don’t think it’s going to paint a pretty picture – but this isn’t a good money habit. It can lead to further stress, overspending, and leave you feeling out of control. A simple act of financial self-care can be to make a habit out of checking your finances. This could include choosing a regular time every week to login to your accounts, a monthly spreadsheet review, or setting up instant app notifications so you know when you’re spending or have an upcoming bill. Whatever works for you, having visibility over your money ensures you have no nasty surprises and feel in control rather than anxious over uncertainties.
3. Build a rainy day fund
Money gives you security. Having a financial cushion to fall back on allows you to take more risks and offers you a level of freedom in your life. It means you can choose to leave an unfulfilling job or relationship. It means you can live more creatively and purposefully. How much you want to save into your rainy day fund is entirely individual, but it’s an essential part of self-care for most of us and can make a world of difference to your sense of security – no small thing in these uncertain times. You can find out more about rainy day and emergency funds here.
4. Make a debt repayment plan
Debt can feel overwhelming, keeping us awake at night and wearing us down over time. Debt is linked to stress, anxiety and depression, and can be part of a cycle whereby our mental and financial health negatively impact each other. If debt is something you struggle with, then it might be helpful to create a repayment plan. This would mean thinking about what debt you should pay off first in order to avoid additional fees or charges. You can also then weigh up the benefits of paying off debt over saving, or whether it’s possible for you to do both. If you’re really struggling with debt or your mental health, debt charities like Step Change can also help you better understand your finances and help you plan your repayments and next steps.
5. Be realistic and honest with yourself about your money
The worst thing you can do for yourself and your money is to pretend that your situation isn’t what it is. Emma at The Broke Generation says that “the way you handle your money contributes to the way you feel about it” – and she’s right. If you review your finances and are honest with yourself about what you spend, then you can budget to allow yourself to do everything you want to do whilst also hopefully saving and investing. On the other hand, setting unrealistic expectations on yourself will often end with a sense of guilt or failure. By being honest with yourself you’ll often save yourself more than money. But remember – if you’ve overspent, broken the budget, bought something on impulse, overpromised on your savings goal – that’s okay. Don’t beat yourself up. We all make mistakes. Think about what can help you in these moments. Set up a process so that if you do overspend, you can tweak your budget or goal so the following week or month balances things out.
6. Celebrate the small
Maybe you want to start your own business in 2021. Maybe you want a new laptop or a nice holiday once we can travel freely again. Maybe you want to change your job or move house or build up your pension or invest more proactively. Setting goals can be an act of self-care because they give us something to work towards. But just because you have big ambitions, doesn’t mean you can’t celebrate the small things too. If you want to grow your emergency fund, then you may like to applaud yourself when you reach certain targets, or how many months you manage to consistently save in a row. If you want to buy or move house, you can give yourself kudos for reaching certain milestones – like for finding a broker, working out a budget for renovations, or learning how to upcycle old furniture. Break things down and celebrate the small things. It’ll make you more productive and more likely to reach your bigger goals.
7. Read more. Listen more. Learn.
We’re constantly recommending books and podcasts on careers, money, financial feminism, freedom and empowerment. There are amazing writers from authors like Emma Gannon, who provide insight on starting a side hustle, to journalists like Iona Bain, who take on consumer finance topics and challenges, breaking them down for sense and insight. There are initiatives like the FT’s financial literacy campaign and money influencers on Instagram like Alice Tapper, Emilie Bellet, Clare Seal and Bola Sol – who all aim to bolster our understanding of our money, the economy, the opportunities around investment and so on. If you prefer to listen, then there are fantastic podcasts and audiobooks too, a few of which we’ve listed here. We all learn in different ways, but if we find methods that work for us then it allows us to easily add conversations around money into our daily lives without having to interrupt the things we enjoy. Plus, reading has been proven to support our mental health too. So if you want to tune out of lockdown and into something a little different, perhaps a book or a podcast can become part of your financial self-care routine.
8. Write it out
We talk a lot about intentionality and conscious spending, and one thing that can help with your money – from budgeting to goal-setting – is writing it all down. This could mean making shopping lists, having a notebook where you write out the pros and cons before a purchase, or just a ‘wish list’ to help you save. Writing out what you want to buy or what you’re struggling with can be a great way to create space in your head, to press pause on an impulse purchase, or to reflect on your spending. Moreover, writing things down not only helps you to remember things better, encoding the information more solidly in the brain, but people who vividly describe or picture their goal are anywhere from 1.2 to 1.4 times more likely to achieve their goal. As Mark Murphy wrote, “writing things down makes your mind more efficient by helping you focus on the truly important stuff. And your goals absolutely should qualify as truly important stuff.”
9. Think of your money in the context of your values
Being mindful with your money can help you save more and spend less. It can support us as we navigate emotional spending or curb our impulse buying. It can help us to slow down and think about why we’re making certain financial choices. As we start the year, there remains a powerful awareness of how the recession is disproportionately affecting minority groups as well as the continuing conversations around the ‘she-cession’, which highlights the additional economic impact on women. Even as we think about reigning in our spending or building our own financial security nets, many of us are also thinking about our roles in society, our responsibilities as consumers – with considerable interest growing around ethical and value-based spending, investing and donation. If you have a desire to make your money more mindful in 2021 – something we fully believe in at ikigai – you may find it helpful to read our articles on mindful spending and setting financial intentions too.
10. Start. Wherever you are. Whatever your goals. Just start.
Just like getting out of bed on a cold day, taking the first step towards change is always the hardest. But it’s also the most powerful act of self-care that we have. By getting started, we’re taking control of our money. We’re taking control of our lives. And yes, sometimes we’ll mess up, sometimes we’ll even have to take a step back. But the important thing is to begin.
Making a change is not about January 1st – it’s an active, conscious thing – and it can happen whenever you’re ready. Perhaps January 2021 is your moment. Perhaps it’s not. The point is to start thinking about your financial life, your financial goals, and what decisions or changes you need to make to get there. That, in itself, is an act of self-care.
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We built ikigai specifically for those who want to bring their lifestyle to the next level, by taking better care of their finances.
ikigai beautifully combines wealth management and everyday banking in one single app. And by doing so, it creates a whole new world of opportunities.
Visit https://ikigai.money to find out more.Maurizio & Edgar, Co-Founders, ikigai
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