Money Management: Knowing How To Manage Money Is A Part Of Self-Care
Money management is an often overlooked aspect of emotional wellbeing. In the same ways that I rely on sleep, Netflix, and exercise as part of my self-care, so do I regularly monitor my bank accounts and work towards building my personal wealth. I go even a step further as I think about intergenerational wealth and the investments I need to make now in order for me to live comfortably into my older years. It’s also important to me to secure a legacy to leave behind for my future children.
Money dictates a lot of what we do. Most recently, it has significantly directed how I eat. I have begun eating more plant-based options and buying organic foods. I often find myself in the produce aisle debating between the organic, individually-wrapped squash or its larger counterpart that is probably fifty cents cheaper. I toss back and forth for a few seconds, my head turning from one price sticker to another, until I finally decide to head for the healthier option. “Penny wise, pound foolish,” as my grandmother would say, and in this case, I know the “pound” is a long-term investment in body and physical wellness.
Money management not only affects your physical health and determines how you eat, but it also affects your mental health. According to a 2016 report by the University of South Hampton, researchers concluded that people with debt are three times more likely to have mental health disorders like depression and anxiety. Furthermore, they found that people who commit suicide are eight times more likely to have been in debt. I, for one, have felt the added stressors and emotional toll of having debt and living paycheck-to-paycheck and have since been determined to end the cycle as quickly as possible.
Getting smart about money is not something that was innate to me. Of course, I can always spot a good deal and I am known for having an arsenal of coupons at my disposal. These strategies have helped me pinch pennies, however, I know that what I really needed was to develop a concrete financial plan that would help grow my pennies into the big bucks!
I began my financial education by utilizing as many free resources out there as possible. Tiffany “The Budgetnista” Aliche is a financial educator who regularly shares tips finance tips on the Live Richer Academy and is the co-host of the Brown Ambition Podcast alongside finance reporter Mandi Woodruff. I’ve also heeded the advice of numerous other Black women educating on finance like Bola Sokunbi of Clever Girl Finance and Jamila Souffrant of Journey to Launch, who is most widely known for the 2018 reports about her saving $85,000 in a year. My two biggest takeaways from their stories have been the importance of financial planning and having multiple streams of income. I’ve also begun doing things like automating money transfers into my savings account and keeping a closer eye on my spending.
Financial education will also ultimately allow me to be financially independent one day – and I mean that as both its core definition of having wealth to survive without working, as well as to be financially independent of reliance on another person. Last year, renowned athlete and businesswoman Serena Williams partnered with Allstate Foundation’s Purple Purse initiative to issue a public service announcement on a less-often discussed type of domestic abuse: financial abuse. As a woman, it is very important for me to be financially secure and independent of my partner for my own wellbeing and survival.
I’ve also read countless free books on finances that I’ve discovered through apps like Kindle, Overdrive, and Hoopla. Through financial education, I have also developed a more positive money mindset. Before, money was a stressor for me. I’d often remark that I’d learn about saving when I had plenty to save, but the truth of the matter is that it is important to start where I am now. Since becoming more strategic, I’ve been able to make major money moves, to quote Cardi B, and have since developed new habits and a new skillset around money.
Money Management: Budgeting
The idea of having a budget was once daunting to me. I had to make a conscious decision to stop avoiding looking at my accounts altogether, which would inevitably cause me more stress in the long run. I also needed to make the effort to create a budget that would ultimately help me better allocate and keep track of my money. I was able to get a hold on my expenses by going through my bank statements and using an app to track my expenditures. Apps like Mint, Goodbudget, and Clarity Money help you to categorize your expenses and are free to download on iOS and Android. Within Mint, you can also link their interface with your cards and/or accounts to better see where your money is going. This even helped me detect some random subscriptions that I forgot signing up for. Budgeting has also helped me get strategic about big payments and made me a more conscious saver.
Money Management: Savings
Saving was also a difficult task for me, primarily because my savings account was connected to my debit account and that made it easy to shuffle money back and forth between the two. I’ve since learned to diversify where my money is and not keep it all in one place. One tip I picked up was a start a separate bank account exclusively as an emergency fund. To prevent maxing out credit cards and offset the emotional toll that can arise from surprise costly emergencies, I created a separate account with at least six months’ pay to offset my worries. I did so with an online, high-yield savings account. Whereas most traditional brick and mortar banks offer less than 0.1% interest on savings, most high-yield bank accounts offer over two percent. This way, not only am I saving significantly, but I am also boosting my savings as much as possible.
Getting strategic about money has been a great lesson in regard to my emotional wellness. I no longer stress about when payday coming and have since had the ability to begin thinking about diversifying my wealth through real estate and investments. Getting organized has also meant I have more money for fun experiences like vacations. More importantly, the moves and tips I gather today will make all the difference later when I have the knowledge and resources to pass down to the generations to come.
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