Financial self-care: How to actually do it?

Have you ever felt anxious before checking your bank balance or guilty after spending money on yourself? Perhaps you've put off opening a bill because you're worried about what you'll find.

Money can stir up difficult emotions, especially when you're balancing everyday expenses, debt, family responsibilities, and an uncertain income. Even when you're managing financially, the pressure to save more or spend less can leave you feeling exhausted.

That's where financial self-care comes in. By paying attention to your finances and the feelings that influence your decisions, you can develop healthier habits without placing unrealistic expectations on yourself.

You don't need a large income or a perfect budget to get started. Here's how to approach financial self-care in a way that works for your circumstances.

What is financial self-care?

Financial self-care means taking practical steps to look after your finances while considering how money affects your emotional wellbeing.

It includes understanding your income and expenses, managing debt, preparing for unexpected costs, and making spending decisions that reflect your priorities. Just as importantly, it encourages you to recognise financial anxiety, guilt, or avoidance without being overly critical of yourself.

For example, you might earn a comfortable income but feel anxious whenever you spend money. Alternatively, you may be carefully managing a limited budget while worrying about how you'll cover an unexpected bill.

Your financial circumstances and your relationship with money both influence how secure you feel.

How financial stress affects your mental health

Financial worries can extend well beyond your bank account. When you're concerned about paying rent, managing debt, or covering everyday expenses, you may find it harder to relax, concentrate, or sleep.

According to the Australian Institute of Health and Welfare (AIHW), approximately 13% of Australians experienced financial stress in 2023, up from around 11% in 2022. These figures are based on data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. 

The connection with mental health is particularly concerning. In 2023, people experiencing financial stress were 2.6 times more likely to report high or very high psychological distress than those without financial stress.

Why money worries can be difficult to manage

Financial stress can influence your behaviour as well as your mood. You may avoid checking your accounts because you're worried about what you'll discover, or spend impulsively when you're feeling upset.

Although these responses can provide temporary relief, they may leave you facing additional financial pressure later.

Recognising your patterns can help you respond more thoughtfully. Rather than criticising yourself for avoiding a bill or making an impulse purchase, consider what you were feeling at the time and what might help you handle the situation differently.

[Image placeholder 1: A person sitting at a kitchen table reviewing household expenses in a notebook, with a laptop and cup of tea nearby. Natural lighting and a relaxed, realistic setting.

8 practical ways to practise financial self-care

You don't have to change every financial habit at once. Begin with one or two areas that need attention, then gradually build a routine you can maintain.

1. Understand your financial situation

Knowing where your money goes can help you identify what needs attention and make more informed decisions.

Start by reviewing your income, regular expenses, outstanding debts, and upcoming bills. You can use a notebook, spreadsheet, or banking app, whichever you're most comfortable with.

If financial tasks make you anxious, begin with a short session of 10 to 15 minutes. Focus on gathering information rather than judging your previous decisions.

2. Create a budget that works for you

A realistic budget helps you plan for essential expenses while keeping your financial priorities in mind.

List your income and regular costs, including housing, groceries, utilities, transport, and debt repayments. Remember to account for occasional expenses, such as medical appointments, insurance, and car registration.

The Australian government's Moneysmart website recommends reviewing your budget regularly as your circumstances change.

If your income varies, you may need to adjust your spending plan from month to month. Aim for something practical rather than a budget that's too restrictive to maintain.

3. Build an emergency fund gradually

Unexpected expenses can be stressful when you have little money set aside.

An emergency fund can help cover urgent costs, such as car repairs, medical bills, or essential household expenses, without immediately relying on credit.

Moneysmart suggests aiming for enough savings to cover approximately three months of expenses. However, you can work towards this gradually. <Cite ref="turn148050search1"/>

If your budget allows, consider saving $5 or $10 a week. Even modest contributions can gradually build a financial buffer. When money is tight, covering your immediate needs should take priority.

4. Recognise emotional spending

Sometimes, spending becomes a way to cope with stress, boredom, loneliness, or frustration.

You may find yourself shopping online after a difficult day or buying something you hadn't planned because you want to feel better.

Before making an unplanned purchase, ask yourself how you're feeling and what you're hoping the purchase will provide. If it's something non-essential, consider waiting until the next day before deciding.

There's nothing wrong with spending money on things you enjoy when they're affordable. Becoming more aware of your emotions simply gives you greater choice over how you respond to them.

5. Set healthy financial boundaries

Financial boundaries help you manage your commitments without feeling pressured to spend beyond your means.

You might find it difficult to decline expensive invitations, lend money to relatives, or discuss shared expenses with your partner. These conversations can feel uncomfortable, particularly if you're worried about disappointing someone.

Try communicating your limits clearly and respectfully. For example, you could say, "I'd love to catch up, but could we choose somewhere more affordable?"

Being considerate of others doesn't require putting your own financial stability at risk.

6. Make room for enjoyment

Managing money responsibly doesn't mean giving up everything that brings you pleasure.

If your circumstances allow, consider setting aside a small amount for hobbies, social activities, or occasional treats. Including enjoyment in your spending plan may help you maintain a healthier balance between your current needs and future goals.

If there's little room for discretionary spending, look for affordable alternatives. Meeting a friend for a walk or attending a free community event can still provide meaningful opportunities to connect and unwind.

7. Schedule regular financial check-ins

Reviewing your finances regularly can help you identify upcoming expenses and address problems before they become more difficult to manage.

Choose a time each week or fortnight to check your accounts, review recent transactions, and plan for upcoming payments. You may only need 15 minutes.

Keep the process manageable, particularly if financial responsibilities tend to overwhelm you. The aim is to become more comfortable handling your finances, rather than monitoring every purchase.

8. Seek financial guidance when needed

You don't have to work through complex financial difficulties without professional guidance.

If you're struggling with repayments, consider contacting your lender or service provider to discuss financial hardship arrangements. Depending on your circumstances, you may be eligible for temporary assistance or an adjusted repayment plan.

You can also contact the National Debt Helpline on 1800 007 007 for free, independent, and confidential financial counselling. A financial counsellor can help you understand your options and develop a practical plan.

How to practise financial self-care when money is tight?

Financial self-care can feel particularly challenging when your income barely covers your essential expenses. Advice about saving more or cutting back on spending may feel discouraging when you've already reduced costs wherever possible.

During these periods, focus on your immediate needs. Prioritise housing, food, essential utilities, and necessary healthcare. If you're having difficulty meeting these expenses, consider exploring government assistance, concessions, or community support services.

It's also important to acknowledge circumstances beyond your control. Job loss, illness, caring responsibilities, and rising living costs can create serious financial challenges, even when you're managing money carefully.

Try to avoid comparing your financial progress with someone else's. Instead, identify one practical step you can take, such as contacting a creditor, reviewing your entitlements, or speaking with a financial counsellor.

When financial stress starts affecting your wellbeing

It's understandable to worry about money occasionally. However, if financial concerns regularly affect your sleep, relationships, concentration, or mood, you may benefit from additional emotional support.

You might notice that you're constantly anticipating unexpected expenses, avoiding financial conversations, or feeling ashamed of your circumstances.

Your past experiences can also shape how you respond to money. For instance, growing up in a household where finances were unpredictable may leave you feeling anxious about spending, even when your current circumstances are more stable.

A therapist can help you explore these experiences, understand unhelpful thought patterns, and develop healthier ways to manage financial anxiety.

Approaches such as cognitive behavioural therapy (CBT) may help you recognise thoughts that intensify distress and develop more constructive coping strategies.

While therapy doesn't replace financial counselling or resolve practical money problems, it can support your mental health as you work through them.

Start with a simple financial self-care routine

If you're feeling overwhelmed, keep your first steps small.

Set aside 10 to 15 minutes each week to review your bank balance and identify any upcoming expenses. Then choose one manageable task, such as checking a bill, updating your budget, or reviewing an unused subscription.

Pay attention to how you feel during the process. Are you anxious before opening your banking app? Do you feel guilty about particular purchases? Are there financial tasks you've been avoiding?

Noticing these reactions can help you understand where you may need more support.

You can gradually build on this routine as you become more comfortable. If you miss a week or encounter an unexpected expense, adjust your plans rather than treating it as a setback.

Final thoughts

Financial self-care takes time, especially if money has been a longstanding source of anxiety or uncertainty.

By understanding your financial circumstances, developing realistic habits, and recognising the emotions behind your decisions, you can gradually build a healthier relationship with money.

Some weeks, you may be able to save towards a goal. At other times, managing essential expenses or asking for assistance may be your main priority. Both are valid parts of caring for your financial wellbeing.

If financial worries are affecting your mental health, consider speaking with a therapist. They can help you explore the thoughts and emotions influencing your relationship with money and develop strategies for managing stress.