Even the best budgeter can run into a bit of financial stress from time to time. But constant stress can take a significant toll on your health.
Could practising mindfulness really help you reduce that stress and build a better financial plan?
The inspiring – and perhaps surprising – answer is yes.
How mindfulness can help you with your finances
“With mindfulness, the areas of the brain associated with mind-wandering, stress and anxiety become less active,” Meg Salter says. The Toronto-based mindfulness coach is the author of Mind Your Life: How Mindfulness Can Build Resilience and Reveal Your Extraordinary. “And areas of the brain associated with cognitive control and positive mood are enhanced,” she adds.
That means that by soothing anxiety and reducing stress, practising mindfulness can help you make – and stick to – better decisions. That’s the cognitive control part. With a more positive mood, you can approach problems more confidently and calmly. And since money is one of the biggest sources of anxiety for many Canadians, mindfulness can help you feel less stressed and more in control in challenging financial situations. You may find it easier to make and follow up on good decisions about spending, saving and investing.
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If you’re new to mindfulness, know that it’s not simply an attitude adjustment. It’s a skill you can develop and hone.
Thanks to the brain’s flexibility, we can build these skills even if we’re not born with them.
“Neuroplasticity means that the neural structure of the brain can change with experience,” Salter explains. “It happens all the time, whether you’re playing tennis, driving a taxi or practising mindfulness. Just as physical training builds your core physical abilities like strength or flexibility, mindfulness expands your attentional bandwidth.”
In other words, the more attention you consciously pay to something, the more attention you can find you are able to pay.
It’s a gradual change. You get better at it the more you practise it. The great thing, Salter says, is that it’s worth the effort. You end up with better concentration and clearer perception.
How to start being mindful
Start by creating a vision for your personal goals. Flesh out all the details you can. This will help you chart the money, time and other resources you’ll need to get where you want to go. For example, do you want to own a home in the near future? If so, by when? How big? How much do you want to spend?
How you capture your vision is up to you. You might lay the details out digitally in a spreadsheet. You could go old-school and make a poster on Bristol board. You could set up regular reminders on your phone. Or you could attach sticky notes to strategic locations like the inside of your wallet, your bathroom mirror or the sun visor in your car. The main thing is to do whatever will keep your vision top of mind.
Then use your personal vision as your guiding principle for making financial decisions, both long-term and in the moment. By getting in closer touch with what’s most important in your personal finances, mindfulness can help you find ways to more easily achieve your financial goals.
How to spend your money mindfully
Yes, splurging can bring fleeting joy. That’s especially true if you’ve been sticking to your budget and can genuinely afford the treat. But what if you want lasting gratification? That comes from being able to say “yes” to purchases that move you closer to your goals. And from saying “no” to those that don’t move you closer, or that can even push you farther away.
So how can you tell the difference?
A mindful financial decision is one where you’re clear about two things. The first is why you’re making that decision. The second is how that decision aligns with your core values and aspirations. This process applies when you’re assigning resources in your budget, and saving and spending within that budget.
Salter recommends asking yourself the following questions when thinking about a purchase:
- How long will I feel good about this?
- Does this keep me on track toward my short- and long-term goals?
- Exactly why am I making this purchase?
You can apply similar principles to budgeting, too. When you’re trying to save money or meet new obligations, ask yourself the same questions. How many of your expenses are necessary? How many of them help you reach your long- and short-term goals? The ones that don’t fit into either of those buckets may be chances to save rather than spend.
Resources that can help you be mindful about your money
- A simple budget calculator can make it easy to see what you’re spending and saving now. With that knowledge, you can make better-informed financial choices right away. That’s the first step toward mindful spending.
- Next, meet with an advisor to map out your strategy. Bring along the personal vision you developed earlier. That direction can help you and your advisor work together to make a plan that’s right for you.
- Finally, take time to protect what you’ve worked so hard for in your mindfulness practice. Make sure you have enough health and life insurance coverage to look after yourself and your family. Your advisor can help you with this, too.