Retirement Benefits

5 Ways to Face Your Finances Without Feeling Fraught

Tattooed hipster is using a calculator to sum all the bills

Chances are you have a complicated relationship with money — and it’s no wonder. Money can be associated with security, status, and even shame. Your relationship with money can be related to childhood experiences, your socioeconomic status growing up, or financial hardships later in life.

Having an adverse emotional response to money may impact your financial decisions. You might feel overwhelmed by the thought of saving for retirement and avoid such planning altogether, leaving yourself unprepared for the future. It’s possible to navigate those feelings and work toward financial security.

We’ve gathered five ways to face your finances without feeling fraught.

1. Determine Your Spending Habits

Most people aren’t strictly a spender or a saver, but they reside somewhere on the continuum. Determine your spending habits by tracking them for three to six months. You can do this with a spreadsheet, app, or online tool — many banks offer this feature in your online account. At this stage, try to stay judgment-free and simply gather information.

Once you know what your spending habits are, you can decide how they impact your goals and if you want to make changes.

2. Establish Your Financial Goals

What is it you want to do with your money? Some people want to prioritize the long term and focus on saving for retirement, college, or buying a home. Others prefer to pay off loans or debt. Some want to be able to help their loved ones or must support their parents, while others prioritize vacations or luxury items. Honestly exploring your goals can help you plan the future you want. Our Planning Your Financial Future Checklist is a great way to get started.

3. Check Your Investing Decisions

When it comes to investing, emotions can sabotage your success. Making quick decisions based on market fluctuations can impact future earnings because of buying or selling at the wrong time. If you’re managing your portfolio yourself, put a waiting period in place before you act. Having a financial advisor manage your accounts can relieve some of the stress and serve as a way for you to think through your options before acting.

4. Participate in Your Retirement

Does the thought of your future retirement fill you with excitement, or dread? Are you looking forward to waking up each day to new experiences, or are you worried whether you’ll be able to make ends meet? Maybe your emotions are mixed? How you feel about your retirement years could impact your saving and spending priorities today.

Get started by setting up automatic contributions to a deferred compensation plan. This can help you save for the future without feeling like you’re missing out on today. Level up by attending a CalPERS Benefits Education Event and chat one-on-one with an expert about your CalPERS benefits. We host events virtually and in person, so you can find one that fits your schedule.

Are you nearing retirement? Our Retirement Planning Checklist outlines what you need to do as you get closer to your retirement date. It’ll take time to get used to spending your retirement funds rather than saving. Being prepared will help ease the transition.

5. Set Up Your Estate Plan

By now you know how important estate planning is, no matter where you are in life. But discussing this topic can bring up a range of emotions for everyone involved. Some people prefer to avoid the topic altogether. It’s best for you and your loved ones to start the discussion early, before there is a pressing or unexpected need. If emotions become overwhelming, take a break, and resume the talk at another time.

Finances aren’t always easy, so give yourself grace as you work through what influences your money management decisions. Frequently check in with how you’re feeling, take breaks and divide large items into smaller, more manageable areas of focus.

If you find you need additional help, a financial therapist or counselor can work with you. Envision your future life and how you want to feel in it — it might inspire you to take make that first move.