5 ways to practise financial self-care
The term ‘self-care’ might stir up images of sheet masks, yoga retreats, or a fancy dinner. But you can enrich your life without a hefty price tag.
Australian psychologist Dr Tim Sharp says self-care is ‘whatever one needs to do to foster, develop, and maintain good health and wellbeing’. With that in mind, if you don’t have a financial self-care plan, we’re here to help you put one in place.
Add these rituals into your every day and future you (and your savings account) will thank you.
1. Start an emergency savings fund
Finder's recent savings account statistics found 44% of Australians only had enough savings to get by for a month or less if something were to happen.
Whether you lose your job, have an accident, a pet needs medical attention, or you need to replace something unexpectedly, we can’t control the fact that unfortunate things happen. But an emergency savings fund, or ‘savings buffer’ will help lessen the blow of a big life event.
Set yourself up with a rainy-day account, and work out what portion of your income you can put towards it each week or month. While 10 per cent of your salary would be ideal, even $10 a week is better than nothing – that amount would get you to $520 in a year, enough to help you out of a bind if something comes up.
Keep this money separate from your other savings goals. That way, if something unexpected happens, you don’t feel the stress or guilt of it impacting your savings for that dream holiday or house deposit.
2. Set up direct debit for all your bills
Paying bills and expenses are a necessary part of life. When you consider all the elements that make up your daily existence – utilities, internet, phone bill, memberships and medical expenses, it’s hard to count them on one hand, let alone keep track of them all individually!
Paying your bills on time helps you maintain a healthy credit score – which is very important if you’re looking to obtain credit financing for things in the future, like buying a home. So, remove the stress of trying to remember everything and set up direct debit to automate that part of your life.
3. Prioritise paying your debts
Debt can feel like a constant cloud over your life – in fact, one in four Australians say they couldn’t manage their finances without a credit card.1 When we don’t have a plan to manage our debt, it will only build and compound more over time.
If this is happening to you, perhaps it’s time to rethink that big savings goal, and channel any extra income into clearing the debt that’s causing you so much stress. Think about it – if your savings are climbing, but you’re having to max out your credit card each month to get by – where is the benefit?
It’s also important to look at the kind of debt you have. Debts with a high interest rate should be top of your list to pay down; things like credit cards, personal loans, and some buy now, pay later services.
If you’ve found yourself in a position where you have multiple high interest credit cards that need urgent attention, look at consolidating the debt into one place with a balance transfer. This rolls all your existing repayments into the one loan, making it easier to prioritise the one lump sum and keep up with repayments.
Banks will often offer a lower rate of interest for a certain period for funds brought in from other financial institutions, and you could also grab yourself a better ongoing interest rate as well. Cheers to that.
4. Set a regular date with yourself
If your love language is ‘quality time’ then it’s time to practise what you preach. Set time aside each month to go over your financial situation and evaluate what you can do differently in the month ahead. It’s the perfect time to check in on a few things, like:
- Did you over-indulge at any point, and if so with what?
- What is coming up in the month ahead that might impact your budget or savings goals? Think birthdays, appointments, or other major events in the calendar.
- Are you on track to reach your savings goals?
- Did you have enough in your budget to get you by for the month, or do you need to increase or decrease it?
- Are there any opportunities for extra savings, discounts or rewards you can use for regular purchases next month?
If you want to make it more indulgent, add in a face mask and scented candle to set the mood – who are we to judge?
5. Make space in your budget for joy
Living a financially sensible life shouldn’t be all about restricting yourself. Sure, we want to reach our goals, but we need to enjoy ourselves along the way too. Make sure your budget includes some discretionary funds in there to treat yourself on the odd occasion.
Besides, think of the double dopamine hit you’d get from a little splurge that doesn’t negatively impact your current goals?
Take care of yourself with a Future Saver account
With a Future Saver account on the myBOQ app, you can practise financial self-care with ease. Features like round ups, spend tracker, and the option of up to nine separate savings accounts will help you reach your goals sooner than you can say Namaste.
