Over the past decade the use of meditation and mindfulness has expanded among users of all ages. This growth is partly due to the self-improvement movement that has flourished on the internet. The concept of mindfulness originated from Eastern world religions and spread to the West after people saw the benefits of becoming more aware. Mindfulness can be applied to many aspects of life, including finances. Understanding what mindfulness means can help us with the application.
The definition of mindfulness is “the quality or state of being conscious or aware of something.”
Here are four aspects of mindfulness that can be applied to your finances:
Awareness
A key to financial awareness is understanding why you’re making certain purchases. This is not exclusive to the amount of money you’re spending or what you're spending it on, but also on the motivations behind it. Oftentimes, people can find themselves spending money on things they don't need because they’re not being conscious of the decisions they’re making in the moment. This frequently ends up causing buyer’s remorse even moments after the purchase.
Tip: One way of being more financially aware is by setting aside time to look at your spending. Try to minimize, or at least acknowledge your discretionary or non-essential spending like eating out, entertainment, and shopping. Try doing this for a week and evaluate how much you can save. Seeing the benefits of saving money on non-essentials will likely make it easier for you to bypass those expenses in the future.
Keep track of your spending on the go with the ALLIANCE Mobile App.
Intention
When you start spending your money with intention, you will soon realize you have more freedom to spend. Setting goals can be a way of being more intentional about your spending, but people often equate goal setting with either passing or failing a goal. When practicing mindfulness, you actually want to give yourself some grace when it comes to achieving your goals. Try setting some intentions and do it on a daily basis. Your intentions should include a review of the purchases you are making, along with a host of other things that can affect your financial health.
Tip: Think about your values and buy from brands that represent them. Are you passionate about your community? If you are, buy from local businesses! Line up your spending with who you are. Even if you are spending a little more to do this, you’ll feel much more content with how you're spending your money because it lines up with your values.
Balance
Buddah taught what he referred to as the “middle way”. The middle way is learning to balance between the extremes of indulgence and deprivation. Because emotions and reason play a large part in financial decisions, you can think of this as a way of finding a balance between what you absolutely need and what you want.
Tip: The best way to balance reason and emotions is by writing a pros and cons list. If you are facing a major decision, this will help you to not let your emotions outweigh your reasoning. Once you become more balanced, you will start making healthier financial decisions that you won’t regret over time.
Using ALLIANCE's Financial Calculators can help you see where you are off balance.
Focus
Being mindful requires you to be present in the moment; that you not dwell on the future or the past. This is not easy as it relates to your finances because they revolve so much around what has happened in the past and how you’re planning for the future. Setting a budget can be really helpful with this. It will cause you to focus on the essentials and show you what can be cut out. Once you have set your budget, make sure to routinely monitor it. This lets you see where your money goes so you can adjust your budget accordingly for future spending.
Tip: Set three major long and short term goals. Rank them by importance and put them in your budget. Then, while evaluating your budget you’ll be able to see the impact on your financial goals.
To read more about mindfulness, check out these links:
Getting Started with Mindfulness