Finances and budgeting are often topics that arises at some point during therapy because of the stress and anxiety it causes. This can take a toll on your mental health, your physical health and your relationships. Here are 5 strategies that can help you with budgeting.
1. Sit down and review your finances (i.e. Budgeting)
If you haven’t done it before or in a while, take some time to go over your financial situation. This involves reviewing your income, expenses and debt. Yes, it can be intimidating and time consuming if you’ve never done it before but it pays off in the long run. Plus, you get to have some sort of baseline to work off of in the future. Budgeting is meant to help you monitor and manage your spending. The level of detail you want to drill down to is up to you.
2. Decrease your expenses
As you review your expenses, make sure these expenses are what you need and want. This means that you’re not paying for something that you thought you cancelled or you’re not using. For example, the well-intentioned gym membership you got sucked into during the new year promotion but haven’t utilized. Yes, exercise if healthy for your mental health, but if you’re not using the gym then the cost of the gym membership becomes a financial stressor.
3. Increase your income
Budgeting shouldn’t always about cutting expenses. As you review your income you can determine if you’re getting paid at market rate. If you’re not, then it’s time to start negotiating for a better compensation package from your employer or it’s time to look for a company that will pay you what you’re worth. For minorities and women, you’re most likely not getting paid the market rate due to the gender wage gap. Even if you’re working for a public sector organization such as educational services, and they have a pay range, you may want to look into where you fall on the pay range and negotiate to be on the higher end.
4. Take care of your debt
If you have any debt, you can see if lenders are willing to negotiate a lower interest rate. This generally will work with credit card companies and that in turn means you pay less than you would have before. But you have to ask and then start paying your credit card debt off. It doesn’t hurt to try this with any debt you have because the worst they can say is no but if they are willing, then it works out better for you. Don’t bury your head in the sand because that actually causes the stress and debt to grow over time. Whatever is the case, you want to pay off the debt with the highest interest rate first.
5. Work on having an emergency savings fund
An emergency fund is money that covers your living expenses should anything unexpectedly happened. This money is for unexpected necessities and not for an unplanned vacation. If you want to take a vacation, start another savings account for vacations. An emergency fund is usually at least 3 months’ worth of living expenses or more. You can use the cancelled gym membership fee from earlier and start putting that in your emergency fund. Even putting away $20/week is better than not putting away anything.
If things are really bad, seek out programs that can help you sooner rather than later. There are many government programs at the local level that can help pay a portion of your utilities, rent, etc. but you have to apply for them. Even local charities and churches have programs that can help.
As a therapist, I want to make sure that my clients are not only taken care of emotionally but also financially. Being able to take care of yourself financially and plan for your future retired self, you need to look at what is happening now. Start budgeting today.