Financial Self-Care Tips for Challenging Times

Self-care is the practice of taking an active role in protecting one’s own well-being and happiness, especially during periods of stress. Financial self-care includes both the proactive management of money to support you during times of stress, as well as the immediate use of whatever money you currently have to support your mental, emotional and physical well-being.

In this article, we will be discussing both.

Insights: Financial Self-Care Actions to Take During Difficult Moments

Create a 3-month emergency fund based on your monthly living costs to use during unexpected hardships without feeling guilty.

Conduct a financial audit to know where your money goes and identify potential savings.

Allow yourself to spend on well-being during tough times, knowing you can recover financially later.

The False Narrative Around Savings

Difficult times tend to happen when we least expect it, which can sometimes throw our whole life off course, including our finances.

These times can take a toll on your mental and physical health, and possibly require drastic changes to your career or living situation.

Many people feel guilty pulling money out of their savings account, no matter how dire the situation. Some may tell themselves that there might be a bigger emergency coming, and others may believe that savings are never meant to be touched.

The idea that savings are never meant to be touched is a false narrative. Typically, the act of saving money is to put it away for your future self, whether saving toward a goal or having a cushion for a time of emergency. Even if you have some savings set aside for these reasons, it’s not uncommon to feel guilty or hesitant about pulling money out when you need it most.

Create a 3-Month Emergency Fund

Having separate bank accounts for different savings funds (or splitting your savings up into buckets if your bank has that feature) can be incredibly useful. Having an account for the purpose of setting aside a “3-month emergency fund” will make it easier to pull funds out when you are unable to work for up to that period of time when disaster strikes.

Knowing exactly how much it costs to live your life month-to-month will help you determine what your personal number for a 3-month emergency fund should be. For example, if you know your monthly expenses average $3,000 and you have $9,000 in your savings account, you’ve met your 3-month goal.

This can be a good time to audit your finances and be sure you know where every dollar is going. Too often, people are afraid to look at their finances, unaware of just how much they’re spending in one category or another. The best way to prioritize your financial health and prepare for the future is to assess where you’re currently at, what can be cut and where things can be moved.

It’s OK To Be Unclear About Your Finances

Clarity about your spending and expenses can help give you peace of mind.

You may find yourself in a situation where you need more money than usual to cover an unprecedented event. This could be anything from a medical bill to a family emergency, or even a natural disaster.

When you save money, you are giving it to a version of yourself somewhere down your own timeline. When you go into debt, you are borrowing money from a version of yourself. It can help to frame your finances in this light to see the bigger picture of how you’re helping yourself, past, present and future.

Sometimes you will need to borrow money from “future you” to support yourself in the present (for example, utilizing a credit card, taking out a loan, pulling from savings or investments, etc.).

What I want you to remember is that this is not a failure, and it is not setting you back. It’s putting trust in the future version of yourself to support you financially (via paying off debt or building up your savings again).

The most important thing to remember when you are experiencing a difficult time is that your mental, emotional and physical well-being must be the top priority. The wonderful thing about money is you can make more, pay it back and save it up again.

If you need to spend more money in a challenging season to support your well-being, do so without guilt or shame. Whether you need to relocate, book a temporary stay at a rental or hotel, eat out more because you can’t cook at home, spend more on outings with friends or entertainment, or take a work sabbatical—do not let your feelings around money be at war with your well-being.

Financial self-care is about intentionality, deciding what will support you most for the long term, even if that includes the temporary dopamine boost you’ll get from ordering DoorDash.

Stay aware of how you’re utilizing your finances during this difficult period, knowing that it will end. Let yourself spend money on what you need, but don’t let yourself spiral into a “screw it, who cares” spending binge.

You’re allowed to spend money on things that bring you joy during challenging times. You’re allowed to give yourself what you need and use savings or credit to fund it. Put faith in the future version of yourself to replenish your finances, pay off the debt and make sure you’re financially supported again in case of another challenging time ahead.