Whether your goal is future financial security or a week in a beach house in Hawaii, a strong savings plan can get you there. As an added bonus, amping up your savings can also mitigate future financial stressors, such as unexpected bills. However, upping the balances in your accounts isn’t always easy and often requires sacrifices, like saying no to weekly brunches or a quick getaway.

But keeping your savings on too tight of a shoestring isn’t always the best approach. According to Wendy Wright, a certified financial recovery counselor and therapist in Denver, strict saving can be detrimental if it results in too many restrictions on your life. 

Even if you’re saving to increase your happiness, you might not be reaping the rewards because you’re too worried, she said. “You’re so preoccupied with saving that your relationships suffer or you’re not having any fun.”

Here’s how to achieve a balance, so you can boost your savings while protecting your mental health. 

1. Acknowledge your relationship with money

Everyone has some kind of relationship with money, and acknowledging it can help you understand the “why” behind your financial behavior. Whether you’re afraid to buy the things you want or need, or you can’t control your impulsive spending, take a hard look at what’s driving your financial decisions. 

For example, your parents’ values surrounding money and their behaviors can influence your relationship with money as an adult. If you experienced financial insecurity as a child, you might be more frugal. Or, you might avoid financial planning altogether as a means to avoid anxiety. If your parents kept you in the family finance loop, however, you might feel more confident about your decisions. A study from T. Rowe Price shows that kids who discuss money with their parents become more financially responsible adults. They are more likely to save for retirement, have an emergency fund, and keep a budget. 

Your mental health status can also impact how you save and spend; for example, people with compulsive buying disorder tend to also have mood or anxiety disorders. And it’s not uncommon for money problems to cause depression, which can have a cyclical effect. Almost one-third of Americans report that stress about money causes them to experience symptoms of depression at least once per month, and 72% of those with mental health issues report that their symptoms worsened their financial situation. 

As you continue to explore your relationship with money, you should talk to someone about your financial habits, whether that’s your partner, a friend or a financial therapist. “When someone’s able to, in a safe space, talk about their relationship to savings, then they can really learn,” Wright said. “They can understand the roots of their fears of it, or avoidance of it, or overattachment to it.” 

2. Track the emotions associated with your transactions

If you’re still confused about what’s driving certain patterns of financial behavior, Wright said it can be helpful to keep track of the thoughts and feelings associated with each transaction. This will not only give you data on your spending behavior to use when building a savings plan, but will also help you investigate what feelings are coming up for you around your financial activity. If you feel nervous every time you make a nonessential purchase, ask yourself what’s behind that fear. Or if you’re afraid to stash anything away because you’re worried the amount won’t be enough, recognize your own perfectionism and try to make space for flexibility. 

Wright said that both frugal people and impulsive spenders can feel ungrounded by their spending and savings behavior. If you feel a lack of control when you spend or save, you may be on one end of this spending continuum. Identify whether you’re saving or spending too much and how that behavior is a coping mechanism for you. 

For example, you might find that every time you feel lonely or upset, you tend to make an unplanned purchase. That’s vital information to have, because it allows you to respond to those feelings in healthy ways. You might want to establish a waiting period to prevent yourself from spending impulsively, and then respond to those feelings with other coping techniques, such as journaling or calling a friend. 

If you’ve indulged in a lot of retail therapy in the past and are unnerved by the amount of debt you have, don’t punish yourself. You can’t change the past, but you can change the future by taking steps to repair your credit in addition to setting a savings goal. Check in with yourself along your journey and ask for support if you need it, whether it’s from a financial therapist or a credit counseling agency. 

3. Build a flexible financial plan plan

Rather than establishing a strict budget, Wright suggests building a savings plan with “cognitive and emotional flexibility.” Look at your income and expenses, and determine an appropriate amount to save at regular intervals, but prioritize your mental health as well. 

One way to avoid undue anxiety is to automate your savings. Every financial decision you make requires willpower, and once you’ve exhausted your willpower, research suggests you’ll have less control over your spending. If you set up a savings account that automatically withdraws from your paycheck, you’ll have less to worry about. Don’t fret too much about the amount at first; recognize that you need to start somewhere. As Wright put it, “The best way to save is to start.”

You should have a plan for spending as well, which starts with allocating your income to different spending categories. One of those categories should be a slush fund for non-emergency purchases that you feel will improve your quality of life. This reserve lets you know it’s OK to splurge occasionally, as long as the expense is built into your savings plan. 

For example, you might be gearing up for some post-pandemic celebratory spending — a recent study found that 82% of Americans planning to be vaccinated are going to celebrate by splurging on something like a vacation or an expensive dinner. You might decide to treat yourself and take a one-paycheck break from saving, and that’s OK as long as your spending doesn’t remain excessive. After the year we’ve had, we can all use a little pick-me-up. 

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