Managing Personal Finances as a Form of Self-Care

Jordan Peterson tells us that we should care for ourselves as if we were caring for someone that we love.  Self-care is a huge subject in mental health, and it is often thought of in terms of relaxation, medical care, and coping strategies.  Extending this idea to personal finances, that is, managing one’s finances responsibly, is a form of self-care that reduces stress and anxiety in the present, as well as in the years to come.

Dave Ramsey has proposed that successfully managing one’s personal finances is 10% math and 90% emotion.  Of course, the percentages are not exact, but they illustrate the idea that successful wealth management is less about knowledge and more about behavior.  The foundational ideas consist mostly of living within your financial means.  This often involves delayed gratification, or waiting to make purchases until they can be paid in cash to avoid finance charges.

Financing purchases carries significant risk because agreements are often unclear or include hidden terms, which can lead to unexpected debt or fees.  During such transactions, we are often presented with large stacks of documents that we are told to “read and sign”.  Even if we do attempt to read them, it is unlikely that we will understand them adequately.  Remember, “the fine print” is small in order to hide unfavorable terms, not to save space in the document.

Routine use of credit cards may be problematic as well.  This is not only due to the rolling over of  monthly balances, but also due to their use not having the same emotional effect as letting go of cash.  With credit cards, you’ll spend more, but it will hurt less, which can be financially deceptive.

Personal finance management for self-care is not necessarily about wealth accumulation, it is about freedom, autonomy, and peace of mind.  Financial problems bring about symptoms of anxiety and depression.  Close relationships can suffer as well.  Additionally, one may experience a reduced sense of control and self-efficacy.

Buying items before we can afford them may often be rooted in deprivation.  Childhood exposure to poverty may be associated with an increased risk of maladaptive spending in adulthood.  Emotional spending is best understood as a coping strategy likely related to unmet needs.

Effective remedies include identifying emotional spending triggers, delaying purchases (for example, waiting 24 hours), and adhering to a well-constructed budget.  Also, one can explore money narratives that are often found in family scripts.  One’s parents’ relationship with money will probably manifest itself in the next generation as well.

Financial self-care is protective and stabilizing in nature.  Ignoring personal finances often undermines other self-care efforts.  Addressing them gently, realistically, and without shame is an act of self-care.  By managing finances thoughtfully, individuals support not only their material stability but also their emotional health, personal autonomy, and long-term well-being.