The Other Form of Self-Care: 4 Steps To Improve Your Financial Wellness
Money / financial planning
A recent Ellevest study found that financial stress actually makes women sick. Almost half of women (49%) report that money stress has affected their mental and emotional health, and nearly 40% have become physically ill from money stress. This is why it is so important to practice financial self-care. To find out how this actually works, we spoke to Kerry Keihn, Earth Equity Advisors’ financial advisor and operations manager. Here’s what she recommends to help improve your financial wellbeing.
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When making an effort to improve your financial wellbeing, the first step is usually to get a clear picture of your financial situation. What steps can women take to achieve this?
The most important thing to know is that you are not alone in your struggle to understand your finances. It has nothing to do with your intelligence – the financial industry basically developed its own language to make things easier to understand.
If you enjoy managing your finances yourself, there are a growing number of resources to help you with this. Don’t get burned trying to decipher financial jargon when you can look up sources like Investopedia or GOBankingRates. These resources include a variety of articles and calculators to walk you through everything from finding the best credit card for your needs to whether or not it makes sense to refinance (and what refinancing means). Your local cooperative counseling center can also offer free or inexpensive financial education courses that can be very helpful.
If you are working with a financial professional and they are not making things clearer for you, it is probably time to find a new advisor. Look for someone whose values align with yours and who speaks clearly and transparently so that you don’t leave your conversations with them more confused than when you started.
Find out: Simple, effective ways to prepare for a financially secure future
Another important step is alignment with financial success. This can be very helpful in relieving any worries. What are some ways to do this?
Take control of your finances: you work hard for your money. It’s time to make your money work hard for you. Schedule a free call with a certified finance trainer to get started!
When it comes to being successful, the most helpful thing to know is what you are spending and what you are making. While you can create your own budget in a spreadsheet or on a sheet of paper, there are plenty of free budgeting tools like Mint that can automatically categorize your expenses and create a budget that you can adjust. For most of us there are so many issues that it can be incredibly difficult to keep track of all of them mentally, which can lead to feelings of anxiety and stress.
Be careful: 4 money lies women tell themselves (and why they’re not true)
Besides a budget, what are the components of a good financial plan?
The first priority is to make sure you have an emergency fund. A good general rule is to keep the cost of living on for at least three to six months, but it varies from person to person. The main reason for an emergency fund is so that you have enough available to keep buying groceries and paying your mortgage or rent if your income drops or an unexpected bill occurs. The second thing that you should include in your plan is paying back high interest debt, especially credit card debt.
If you’ve got cash left over after you’ve funded your emergency fund and paid off high-interest debt every month, you might want to consider life insurance. It’s not required, but you may want to set aside some of your extra cash for it, especially if you have children or other people who are dependent on you. Or it may be time to focus your financial plan on big goals like saving for retirement. Check whether your company offers a company pension scheme. Many companies offer a match to incentivize savings. So, if you can, try to save at least enough to get the funds that match. If your company does not offer retirement provision or you would like to save even more, you can check which personal retirement savings accounts are suitable for you.
Read: You Shouldn’t Feel Bad Spending Money – This Is How To Avoid Guilt
After all, women should work to improve their money holdings. How can you build a healthy relationship with your finances and how do you view money?
So often do we view money as a necessary evil or feel that we have to sacrifice our values in order to invest our funds and see them grow. This is not the case! You can “do good and do good” at the same time. Your money can match your values. There are many ways to feel better about what your money is up to – the following are just a few ideas.
- Shopping: When it comes to shopping, nothing beats the saying “vote your dollar”. You can do this by shopping locally, buying environmentally friendly products, and shopping with responsible businesses like B Corporations. You can be reassured knowing that your dollars are being used for purposes you believe in.
- Banking: Check with your local community banks and community credit unions. These options often have higher interest rates than the big banks and are often key community players. If there isn’t a local bank that suits your needs, don’t give up! There are other banks that you can find through the B Corp directory or sources like Green America.
- Investing: It is exciting to see how the demand for sustainable, responsible and high impact investment options continues to grow. Unfortunately, as demand increases, we see an increase in “greenwashed” investment options – funds that throw in words like “green” or “social justice” while still investing in fossil fuels and opioid manufacturers. Make sure to look under the hood before investing in anything that claims to be responsible. You can use tools like As You Sow to research various funds you are interested in or search for a responsible investment firm with Green America.
- Donate: There are so many different ways to donate to the causes you care about! In addition to writing a check or donating online from your bank account, you can also donate stocks. You might also consider setting up a donor-advised fund. If you are over 72.5 years old, you may have the option to donate money directly from your retirement account to a nonprofit of your choice. If you are working with a financial advisor or accountant, let them know if you care about charitable giving so they can discuss your options.
GOBankingRates aims to empower women to take control of their finances. According to the latest statistics, women hold $ 72 billion in personal wealth – but fewer women than men consider themselves “good” or “excellent”. Women invest less and are more in debt, and overall women still earn less than men. Our “Financially savvy woman” The column will examine the reasons for these inequalities and offer solutions to change them. We believe that financial equality begins with financial literacy. That’s why we provide tools and tips for women to take control of their money and help them live richer lives.
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Last updated: November 2, 2021
About the author
Gabrielle joined GOBankingRates in 2017 and brings a decade of experience in the journalism industry. Before joining the team, she was a writer and reporter for People Magazine and People.com. Your work is also at E! Online, Us Weekly, Patch, Sweety High, and Discover Los Angeles, and she was featured as a celebrity news expert on Good Morning America.