It might not be as relaxing as a bubble bath and a sheet mask or as fun as a yoga class with a friend, but managing your finances is an essential part of self-care. Learning how to be good with money and getting to grips with budget basics is one of the biggest acts of kindness to yourself that you can undertake — get things sorted now, and you may well save yourself a lot of stress further down the line.
Becoming money savvy doesn’t need to be boring or anxiety inducing. Adopt these five simple practices to improve your financial health today.
01 — Get to Grips With Budget Basics
Having a budget is essential to keeping track of your money, and yet 33% of Americans don’t budget their money. Even if you don’t stick to your budget rigidly, knowing what you’ve got coming in and out and what you should be spending is the foundation of nailing your finances.
Making a budget doesn’t need to be complex. You can do it with good old-fashioned pen and paper, drawing up two columns: one for any money you have coming in and one for all your monthly expenses like rent, bills, credit card payments and gym memberships. Take time to remember absolutely everything you have to pay for each month — it’s easy to miss things like Netflix or the $8 you pay for that fitness app (to get a full picture, it can help to review the past 3 months of your credit card statements).
You might also want to budget to save a certain amount to each month and add this to your outgoing column. Bank of America recommends saving 10 to 15% of your salary when possible. The money you have leftover after subtracting your outgoing column from your incoming column is the maximum amount you should spend each month.
02 — Use Tech To Track Your Spending
If you want to be even more clear about what you’re spending, you could try using a free budget spreadsheet to break things down further. There’s also a great budget spreadsheet template in the Sheets section of Google Drive, which conveniently converts your budget data into charts and graphs for you — pretty handy if you’re a visual person rather than a numbers one.
These days there are also plenty of great budgeting apps that can make life a whole lot easier. There are pretty decent free ones like Mint, which syncs to your bank account to track your spending, and AI-powered Clarity Money, which keeps tabs on spending and subscriptions.
03 — Think About Investing Any Savings
The idea of investing in stocks and bonds can seem completely intimidating if you’ve never done it before. But in the last few years, it’s become a lot simpler — and cheaper — to invest your savings with the advent of automated investment services, also known as robo advisers. That name makes them sound more exciting than they are, but robo advisers are definitely a handy tool for would-be investors.
According to Forbes, these companies “can take the pain and uncertainty out of investing by constructing a portfolio.” Put simply, they are digital platforms that provide algorithm-driven financial planning services — without the need to invest large amounts of money at a time. Some of the most popular platforms are Betterment and Wealthfront, but it’s worth doing your homework on the robo adviser that’s best for you before investing. If you’re looking for a flesh-and-blood investment advisor, platforms like Ellevest are specifically designed to help women make the most of their money.
04 — Avoid Using a Credit Card When Possible
It’s all too tempting to stick purchases on the credit card without thinking about the ramifications further down the line. With the average American $38,000 in debt, credit cards can spell trouble for anyone with bad spending habits.
Of course, sometimes we need to use a credit card, not least to boost our credit scores. But whenever possible, it really is best to save up for big-ticket purchases — this way, you avoid getting into debt that’s hard to pay off, paying interest and incurring any potential late payment fees. Think carefully about ways to save, rather than spend.
05 — Schedule a Monthly Check-In
There are two types of people in the world: those who know what’s going on in their bank accounts and those who bury their heads in the sand and hope for the best. If you’re the latter, then it’s time to work on breaking this habit.
Schedule a monthly appointment with yourself to check in on your finances. Write it on your calendar and hold yourself accountable. You don’t need to spend hours on this — even 30 minutes going through your accounts can make a world of difference. Use this time to check for any unpaid bills or invoices, file any work-related expenses and ditch any subscriptions you aren’t fully utilizing.
With these simple practices in place, you’ll free yourself from panicking when it comes time to pay the bills, or when that big unexpected expense comes up (because it will!). Instead, you’ll feel empowered to make the decisions that will allow you to live the fullest, healthiest life possible. And what’s more valuable than that investment?
Rosie Hopegood is a journalist, editor and content writer based in London. Her work has appeared in publications such as The Guardian, The Telegraph, Vice and Al Jazeera.