Deciding what your financial goals are may not feel like a form of self-care, and it does require quite a bit of planning ahead, but it is one of the most necessary. Accumulating debt, spending recklessly, and not taking the time to truly understand where your money is going can not only create feelings of anxiousness, but are also huge contributors to your overall stress levels.
While self-care is commonly associated with relaxing activities like taking long baths or getting pedicures, it’s also about understanding your needs, spends, and goals. But managing your spending can also help you realize what’s important to you and allow you to set aside cash for other forms of self-care, like a trip to the spa or that purse you’ve had your eye on for a while.
Creating a personalized monthly budget is a great first step in becoming financially literate. A monthly budget takes into account the amount of money coming in and out of your accounts on a monthly basis. The purpose of a monthly budget varies based on the needs and wants of the person creating them but, regardless of the reasons, budgets will offer you a clearer picture of your spending habits and uncover areas where you can improve.
Here are 3 reasons why starting a monthly budget and taking your finances more seriously can help with your mental health:
1. Studies show a strong link between your mental health and your finances
Nearly half of Canadians admit to losing sleep due to financial stress (Stats Canada, 2019). Regular loss of sleep, together with the constant stress and worry of not having a handle on your finances, can negatively impact your mental health. Mood disorders, anxiety and depression are common mental illnesses that have been directly related to poor financial health. Becoming more financially-stable can help to reduce stress and support your mental health in a positive way.
2. Setting up for success
The earlier you develop a habit of creating and abiding by a monthly budget, the easier it will become as you get older. The more comfortable you are with completing or performing a task, the more confidence you gain, and the sense of achievement you get from accomplishing that goal can benefit your mental health and well-being. Setting goals and working toward realizing them can also strengthen your motivation skills and help you establish other effective strategies to be successful in other areas of your life.
3. Create a sense of security
Sure, money isn’t everything, but it does open a lot of opportunities for your future and help create a safety net for potential financial emergencies. Saving for the more expensive things in life, such as a college fund or a car, is definitely possible if you stick to your monthly budget. Having money that you set aside for emergencies or bigger items (instead of spending frivolously) provides you with a sense of security and also demonstrates your discipline and hard work. Over time, your savings will continue to increase, and when the time comes for you to finally use those funds on something you’ve been saving up for, you’ll feel overwhelmingly proud of yourself.
Fostering a healthy relationship with money allows you to gain a better perspective about your personal wants and needs, and can help you to become more confident and assertive in other areas of your life. The more accustomed you get to tracking your finances, the easier it’ll become in the long run. Your future self will thank you for taking the time to prioritize your financial goals.