How to invest in yourself

Investing in yourself has become popular in recent years with the rising trend of self-care. We are encouraged to spend on ourselves, whether that be a gym membership, getting your nails done, or a longer-term commitment like higher education. The idea behind this trend is that by spending money on ourselves up front, we allow for greater opportunities down the line. But one of the most effective ways people can invest in themselves is, literally, by investing.  

Investing in the market might not show you gains as quickly as in the gym. But over time, it will not only leave you with a pot of money, but with a sense of protection.  

Being financially stable gives you much more leeway for changes in life, such as a career pivot or a move, without having to count pennies while you do it. It can also mean peace of mind for changes that are out of your control. While it’s not nice to think about, some of the toughest experiences in life, such as job loss or the end of a relationship, come along with a significant financial burden. Knowing that you have the savings to make it through that time financially and can focus on the other areas in life is a big asset.

This doesn’t mean that you constantly need to be in the mindset of scrimp and save or not enjoy your other life investments. But saving can be a surprisingly rewarding piece of the puzzle and allow for more of these ‘self’ investments down the line when you choose them.  

The control of spending vs saving

Sometimes spending our money can give us a feeling of control. Walking into work with a coffee in hand makes us feel like we have our life together for a few minutes, and looking down at manicured nails instead of ragged edges brings a little boost of confidence. Having these little luxuries is important to helping us feel good, but sometimes unnecessary expenses can sneak in the picture.

When that spending gets out of hand, the small moments of control that spending gives us can be overwhelmed by a larger feeling of insecurity around our budget. But it’s possible to get rid of this insecurity while still enjoying those little spends.

One approach to doing this is to create clear rules for yourself around what money you can spend now, and what money is dedicated towards your future. As long as you stick within those boundaries, you can spend without guilt. Many people experience a day-to-day battle of if a small expense, like a coffee, is okay. We know these can add up over time. The freedom that a budget gives you is an automatic rule: If a coffee fits in our budget, it can be purchased without guilt. If it doesn’t, the decision to miss one this time around is made before you reach the cafe.  

If you’re having trouble creating boundaries that are reasonable, identify the things that really make a positive impact on your day and note the things that leave you feeling a bit indifferent. These areas of indifference are something you can cut.

I, for example, love investing in myself through yoga classes. They make me feel stronger, and calmer, and it’s fun to be able to improve at something. But I'm not as fussed about getting my nails done. I always seem to wait too long to book my next appointment, and don’t like the experience while I’m there. Cutting just my nail appointments out of my monthly expenditures leaves me with an extra nearly £50 each month.  

Save it before you spend it

Out of sight, out of mind, is almost as useful for yourself as it is on the children in your life. Just like I put my chocolate in the freezer (it tastes better that way anyways), I put my savings in a separate account to my monthly payments. It’s easier to make this distinction after payday, when you have the whole amount in front of you, than to just save what’s left at the end. Most of us are more likely to spend money that’s sitting there than if we move it right away. I find it much easier to keep my paws off than the chocolate.  

Some people like to view this process as ‘paying yourself’. It’s not that you’re locking this money away forever. You are building your wealth and creating flexibility later down the line. If you’ve gotten to the point of ‘paying yourself’ where you have enough money in a savings account for emergencies, you can start investing instead. The benefit here is having money can earn for you through the market. Historically, this has offered far better returns than saving your money in cash. If you want to get started, you can check out the new to investing guide.