8 Tips to Manage Your Mental Health and Your Finances

Just as it's important to manage your budget and finances, it's also crucial to manage your mental health. Money can understandably be a major cause of anxiety and strife, but it doesn't need to be. By having a budget in place and establishing an emergency fund, you can avoid the headache and feel more confident with your finances.

In this blog, we'll look at tips and strategies you can follow to manage your money with confidence and limit any anxieties you may feel around your finances.

1. Have a Realistic Budget

Budgeting is one of the best things you can do each month to plan out your finances. Think of your budget like a roadmap—it will show you where you'll be going and how you've gotten there. A budget lays out your bills and other obligations, as well as any money you may have left for savings or discretionary spending.

If you don't already have a budget in place, now is the perfect time to start! Consider trying the 50/30/20 rule. With this framework, you should put 50 percent of your monthly income towards your obligations (rent, bills, groceries, etc.), 30 percent towards discretionary spending (entertainment, hobbies, etc.), and the remaining 20 percent towards savings.

2. Build an Emergency Fund

An emergency fund is an excellent option for helping to curb any anxieties you may have around money. This is money that you have set aside for any curveballs life throws your way, whether it's an unexpected home repair, a medical emergency, a car repair, or more. You should only turn towards your emergency fund when it's absolutely necessary.

How much should you have saved in your emergency fund? Aim to save between 3 and 6 months' worth of your monthly spending. Therefore, if your expenses for a 3-month period amount to $6,500, this is the minimum amount you should have saved in your emergency fund.

3. Automate Your Savings

Even with a budget in place, it can be hard to keep track of your savings. With monthly bills, rent, car payments, and more, it's entirely understandable to feel overwhelmed with your spending and obligations. This is where automating your savings can come in to help save you the headache.

Automating your savings allows you to transfer money (in an amount you specify) from one account to another. You can choose the date and time that the transfer happens, allowing you to sync up the transfer to when you receive your paycheck. By linking up your savings with payday, you won't even see the money in your checking account. However, you will see your savings grow over time!

4. Establish Boundaries with Your Finances

When it comes to money, it helps to know when to say "no." It can be tough to turn down a dinner with friends, a movie night, or a special vacation. However, it's crucial to know when you can afford something and when you can't. Having these boundaries in place can help make saying "no" easier down the line.

Never devote too much time to stress when it comes to money. If you're too stressed when budgeting or planning for a big expense, know when it's time to walk away and devote time to something else. Consider watching a television show that always makes you laugh, reading a book, or journaling.

5. Explore Your Anxiety around Money

What makes you anxious about money? It can be difficult to dig deeper into this issue; however, exploring these feelings can help you address them head-on. It's totally normal to feel tense about what you're spending and saving. Most people will share these same feelings at some point in their own lives.

Don't be afraid to speak to someone about your feelings around money. A counselor can help you analyze your feelings and consider strategies to reduce your stress. You may also want to consider speaking with a financial counselor, who can help you improve your money management skills and feel more confident with your finances.

6. Align Your Spending and Your Values

When you align your spending with your values, you're being more intentional about where your money is going. This can help you avoid impulse spending, which is when you make a purchase that you didn't intend for. Intentional spending can also help ensure you're putting your money towards what you need (i.e. your essentials), instead of discretionary spending.

You can start being more thoughtful with your money by taking a look at your monthly statement. Are you sticking to the 50/30/20 budget rule, or is more of your money going towards things like entertainment or things you could scale back or cut altogether? In short, think of what matters most to you in your life, whether it be your health, your family, or your home, and ensure your spending is aligned.

7. Focus on Your Own Financial Situation

It's all too easy to get caught up in others and their lives. Constant comparison can be tiresome and will only lead towards feeling bad about yourself. When out with friends or family, don't be afraid to steer the conversation away from finances if it tends to cause you anxiety. Your own well-being is more important than the stress these conversations can cause.

Instead of comparing yourselves to others, focus on what you can control within your own finances. Perhaps this is building up your savings or putting money away over time for a vacation or a home improvement. Celebrate your small victories and build upon that success!

8. Give Yourself Grace

Don't be too hard on yourself for any setbacks with your finances. It's crucial to be kind to yourself in these challenging moments and remind yourself that a difficult time now doesn't spell a permanent disaster. You can absolutely rebound and overcome these challenges. When you do find yourself faced with a financial setback, be sure to stick to your budget and your values with regards to your money.