Let’s talk about finances, shall we?
So before I properly begin, I wanted to give a little disclaimer that just like most people I don’t like talking about money. It is one of these topics that trigger my anxiety and makes me feel extremely uncomfortable. It’s probably because I grew up in a family where money was a taboo subject and as such was simply ignored as if it did not exist. Which is kinda weird, given the times we live in. However, growing up I’ve noticed that my family’s approach to money management wasn’t that unusual. Most of my friends and their parents hated this whole “money talk” and avoided talking about their financial situation at any cost. Honestly, it doesn’t surprise me considering that people love to judge others based on money. That is the world we live in, ladies and gentlemen.
Anyway, the reason why I decided to talk about money, more precisely, mindful money management is that it is an extremely important subject that should be discussed. It’s time to break this taboo. Money is one of this topic you can’t escape in today’s world so instead of acting like this subject does not exist and avoiding talking about your financial situation at any cost let’s try to approach this “money talk” calmly and mindfully.
The Mindful Approach To Money Management
As we’ve already established talking about money is important and necessary especially if you want to improve your financial situation. Without that, you won’t go any further. So instead of ignoring the issue or treating money as an abstract problem, let’s approach it mindfully.
If you still wondering what Mindfulness has to do with Money the answer is: actually quite a lot.
While most people immediately associate Mindfulness with Buddist meditation tradition and a spiritual self-care practice, western Mindfulness-based techniques are actually utilized in a variety of specific ways as an effective strategy to achieve goals. That is why you can find lots of articles on a mindful approach to business, time management, diet, marriage, procrastination or even tv watching.
So, as you can see the concept of Mindfulness is present in almost every scientific or “quasi-scientific” field.
Well, because Mindfulness teaches us to be fully present, attentive, calm and aware of our internal and external environment without being judgemental or overly critical.
So if you thought that Mindfulness is only about practicing guided meditation or deep breathing exercises it’s not actually true.
Contemporary secular Mindfulness rise from Buddhist religious tradition is about mental training practice designed to improve focus, productivity, emotional intelligence, and self-regulation skills through non-religious meditation, guided imagery and breathing exercises. Furthermore, practicing Western Mindfulness-based techniques serve a specific purpose of developing a natural human ability to be fully present and aware of both internal and external environment. Why is it so important? Well, because being fully present enables you to “stay in the moment”, make conscious decisions and reach your personal and professional goals. In other words, mindfulness techniques help you to achieve a healthy balance and act in alignment with your goals and priorities without adopting different beliefs system or sacrificing your daily routine.
Furthermore, modern Mindfulness techniques are designed to help you succeed in your personal and professional life precisely because they help you to gain mental clarity and a wider perspective on life. So why don’t use Mindfulness to Money Management?
The Relationship Between Mindfulness And Money.
Mindful Money Management means:
- Reflect on your financial situation
- Redefine your relationship with money
- Create a successful budget
- Create better spending habits
- Make smart and purposeful financial decisions
- Achieve financial freedom
So how can you use Mindfulness techniques to improve your money management skills? Well, this is my method called: 6 steps to mindful money management that will help you to create a healthy relationship with money!
6 Steps To Mindful Money Management
1. Understand Your Personal Relationship To Money
It is said that your relationships mirror your inner self and I completely agree with that. However, in my personal opinion, this statement refers not only to people but also to animals and things both material and non-material. For this reason, I think that not only your relationships with others (family members, friends, co-workers, your significant other) but also the way you treat, see and think about animals, nature, work, money, food or even Netflix speak a lot about you. But we’re talking about money, right? So what your relationship with money tells about you?
- Take some personal time
- Sit in silence and close your eyes
- Mindfully focus on your breath and bring your attention to the present moment
- Focus on your financial self-reflection without being judgemental or overly critical
- Be honest with yourself and write down your thoughts
This simple task will help you to determine your relationship with money and set a financial plan to achieve your money management goals.
2. Set Financial Goals
A goal without a plan is just a wish. ― Antoine de Saint-Exupéry
Having a goal in your mind is not enough to succeed. You have to create an effective plan first and adopt healthy habits that will help you to achieve and maintain your goals. This rule applies for every goal not only a financial one. But talking about financial goals, here are my examples:
- Establish short-term, mid-term, and long-term financial goals
- Create an Emergency Fund
- Save for retirement or at least start thinking about retirement (even if you are just beginning your career work)
- Assess any debts you have
- Pay off your loans or save money for that
- Pay off Credit Cards
- Live on Less than you earn (that’s how you save your money)
We buy things we don’t need with money we don’t have to impress people we don’t like. – Edward Norton
3. Set Up Your Realistic Budget And Stick To It.
Creating an effective spending plan is key to your financial success because it will help you to:
- Calculate your monthly income
- Determine your expenses
- Divide your expenses into different categories (This simple activity will help you to identify your money wasters and define how much extra money you can down on.)
- Put a price tag on all your expenses
- Avoid bad spending habits
- Avoid debt or go out of debt
4. Switch To “Mindful Spending” Mode
Mindful spending means having control over your spendings and make rational purchases. Let’s face it, the temptation is everywhere. Advertising manipulates our purchase choices and spending habits just like marketers compete to create artificial needs that have to be fulfilled immediately and at any costs which only encourages us to mindlessly spend our money. The easiest way to avoid that is to take a deep breath, think about if you really need this product or service and how it will make your life easier and more comfortable. And then ask yourself if you really want to buy it. Be attentive. Be in control.
- Make rational consumer decisions based on your real needs, not artificial ones invented by marketers to sell more and more products
- Plan your shopping (always make a grocery list, use the internet to search for discounts, coupons, and special offers)
- Improve your customer behavior
- Identify the factors influence your purchasing habits
- Stop mindlessly spending your money constantly buying new stuff that you don’t even need or use
- Become a mindful buyer who knows exactly what their real needs are
5.Start Saving Up
We love to think that nothing bad will happen if we just keep thinking positively. But the truth is that life is unpredictable and unexpected events do happen whether we like it or not. Of course, you cannot be prepared for any hypothetical problem but you can create your Emergency Fund and prepare yourself for emergencies like medical costs, car repair, home repair, seasonal utility bills or taxes.
- Establish your budget and identify how much extra money you can put on your saving account
- Cut off all unnecessary expenditure
- Identify the money wasters
6. Use Financial Apps
- Mint (link) – saving and budgeting app
- Acorns (link) – saving and budgeting app
- PocketGuard (link) – extra money spending app
- You Need a Budget (link) – create a budget within your actual income
- Prism Bills&Money (link) – organizing and paying bills app
- Albert (link) – saving, budgeting and paying a debt app
- Travel Wallet (link) – travel budget and expense app
- Wally (link) – professional expense report app
- Tycoon (link) – Freelancers app
- SnipSnap (link) – digital coupon app
- ShopKick (link) – rewards for shopping online and in-store app
- GroceryIQ (link) – intuitive shopping list app
- Bill Watch (link) – managing, organizing and reminding bills payment app
- Venmo (link) – splitting bills and sharing transactions app
- Personal Capital (link)– investment optimization app
Money is a means, not an end so use it mindfully!
and Manage Your Money Mindfully