Money Management Is the New Self-Care

What does the phrase "self-care" mean to you? Personally, it's a philosophy I've long practiced but never quite knew how to label, until a few years ago when the phrase overwhelmed our cultural conversations. Apparently, self-care was what I unknowingly did when I prioritized my own mental and physical health.

Though during that time, my version of financial self-care also meant putting myself on autopilot when paying bills. Avoidance was my coping method of choice. It meant not questioning why my cell phone bill went up a few dollars without notice for several months. Years later, I received a refund check in the mail from the cell company for a few hundred dollars due to the company's mistake.

Burying my head in the proverbial sand each month when my student loan bill came in the mail was also how I "self-cared." Despite the fluctuating variable and my fluctuating freelance income, the same amount would get paid, and never ever would I look at the balance or consider my options. But each time I paid that bill, my soul left my body for a day or two, only to be remedied by the toxic "treat yourself" cycle of retail therapy.

"Financial stress makes us emotionally brittle. For many people, the emotional weight of finances exists even with only moderate debt and an OK credit score," says Melissa Pancoast, the founder and CEO of The Beans, a financial care app created to help alleviate money-induced stress. As a former Oxford researcher and fifth-grade math teacher, Pancoast is all too familiar with the impact of financial wellness or lack thereof.

According to a recent study from the American Psychological Association, 65 percent of Americans reported feeling stressed about money at some point during the last month. "Finances are the number-one cause of divorce in America, they're a major predictor of heart disease, and reduced outcomes for other illnesses," Pancoast says. "What's hard is we don't always know it's the money eating away at us—or worse, we're so wired to avoid thinking about money, that we blame our feelings on other things."

The first step towards better financial health is examining your own behavior when it comes to money. For example, how do you feel after paying your monthly mortgage? Is your debt keeping you up at night? Does a fleeting midday thought of your bank account balance leave you irritable for the rest of the day?

"Hiding in the bathroom to check your balance when you're out with friends, or arguing with a loved one over finances" could be telltale signs that things aren't going so great, Pancoast points out.

Financial trauma is a real thing—and if avoidance is your coping mechanism, then it's time to tackle the beast head-on. Overwhelmed with where to start? Ahead, Pancoast shares three steps we can all take toward achieving a healthier financial future.

Step 1: Make a Plan

"Having a plan for your money is the best way to take care of yourself and the best way to make progress financially. It checks a few other boxes, too, like knowing where all your money and commitments are, and knowing how much money you make and how much money you cost."

Step 2: Prioritize Your Savings

"The conventional wisdom is that you must have three to six months of emergency savings in the bank to be OK. That target is so far out of reach that many people have a hard time achieving it. The truth is, having just a couple hundred dollars in savings improves your financial decision-making ability; in fact, the new rule of thumb might just be one month's worth of costs. This means you can juice all your other progress by protecting a little bit of cash.

"I'll add, if you need it, spend it! We find that in a financial emergency, a lot of people opt to use a credit card even when they have some savings, which is a sign that we're being rigid (i.e., emotional brittleness). A lot of times we go aggro on our debt before we tuck away a little cash. You'll go further faster if you squirrel away your essential savings, then get to tackling debt, and setting your attention on long-term savings."

Step 3: Spend in Alignment With Your Personality and Values

"This one is my favorite. Recent research showed that people get more joy from dollars spent on the things that align with their psychological fit (aka our identity). Formerly, economists thought all dollars were worth the same, meaning a dollar spent on a book is the same as a dollar spent on a concert. Not so! If you're a bookworm, you'll get more utility from buying the book. This means you can actually get more from your money today. I express myself by buying organic and ethically sourced foods, and supporting women and Black-owned businesses."