Could mindfulness improve how you manage your money?

Older man meditating on the beach

Have you ever driven an entire journey, only to realise that you have no memory of it when you arrive at your destination? Or perhaps you’ve driven on autopilot to a familiar destination, instead of travelling to where you intended to go?

If so, you might have missed out on beautiful scenery, the opportunity to take an interesting new route, or even wasted time travelling to the wrong place.

In a similar way, if you blindly forge ahead without regularly taking stock of your financial situation, you could miss out on valuable opportunities to grow your wealth – which could send you off course and make it harder to achieve your goals.

If this sounds like you, mindfulness techniques could help you slow down, consider where you are in the moment, and rethink your financial purpose.

Happily, World Meditation Day on 21 May provides an ideal opportunity to learn more about how mindfulness could benefit your financial wellbeing and approach to money management.

Read on to find out more about mindfulness and discover three ways it could help you to better manage your money.

Mindfulness means being fully present in the moment

Modern living can mean busy living. Do you often find yourself juggling multiple tasks, never really giving your full attention to any one thing, and battling feelings of stress or overwhelm?

If so, you might benefit from practising mindfulness.

Mindfulness means being fully present in the moment, and it’s a skill you can learn like any other. It involves being fully aware of where you are and what you’re doing, without being overly reactive to what’s happening around you.

This may sound simple, but it can be an incredibly powerful tool for helping you focus on your goals and overall purpose.

While mindfulness may be typically associated with mental wellbeing, the potential benefits it offers are just as relevant to your financial wellbeing, including:

  • Reduced stress
  • Enhanced productivity and performance
  • A clearer sense of purpose
  • Greater insight and self-awareness.

Mindfulness doesn’t only mean meditating on a mat or doing yoga. It offers techniques that can be applied to any aspect of your life, including financial planning.

3 ways mindfulness could improve how you manage your money

1. Understand your money mindset

Spending more time focusing inward and being mindful could increase your self-awareness – and this could help you identify your “money mindset”.

This is a default set of beliefs and attitudes about money that you’ve developed since childhood. These thoughts drive your financial decision-making and play a significant role in how you manage your wealth.

So, your money mindset may help propel you towards your financial goals or make it harder for you to achieve them.

Authors Karen and Jo Singh Sutton-Johal describe four “money mindsets”:

  • In-debt – No matter how much wealth you accumulate, you’re constantly worried about not having enough money, so you’re driven to frequently borrow and spend money.
  • Break-even – You ensure that all your essential costs are covered and avoid taking on debt, but you then spend all your remaining money.
  • Comfortable – You live frugally and save regularly because you feel constantly anxious about money and see financial threats everywhere.
  • Rich – You are an expert at leveraging your time, money, skills, and technology to continually grow your wealth in the most efficient ways possible.

Understanding your money mindset could allow you to break unhelpful financial habits, such as overspending, and build a more positive attitude toward money that leads to better financial decisions.

For example, if you have an in-debt, break-even, or comfortable money mindset, you could look to level up your thinking by challenging negative self-talk and devising a plan to overcome unhelpful patterns of thinking and behaving.

2. Spend and invest your money with intention

Goal-setting is at the heart of effective financial planning and mindfulness can be a useful tool for helping you understand what you want to achieve – your financial “why”.

Why are you saving each month? Why have you decided to increase your pension contributions? Knowing your purpose – be that to fund a comfortable retirement or pay for your children’s school fees – could help keep you motivated.

By enhancing your ability to be present in the moment and improving your self-awareness, mindfulness could help you understand what you want your life to look like in the short, medium, and long term.

Once you’ve identified your goals, “intentionality” can be a powerful force that gives you the determination to achieve them. Whereas mindfulness could help you focus on what you’re doing with your money, being intentional allows you to think about how you’re doing it.

So, as you spend and invest your money, you do so with a clear sense of purpose – or “intention”. For example, if your long-term goal is to retire early, you might make different financial decisions than someone whose main goal is to accumulate wealth to leave as an inheritance.

3. Build your financial resilience

Financial stress is common among people of all ages and circumstances. According to FTAdviser almost half of UK adults suffered poor mental and physical health as a result of financial worries in 2023.

Fortunately, practising mindfulness techniques – such as deep breathing and meditation – could help you combat feelings of stress by encouraging patience and calm reflection.

As a result, you might be less likely to feel unnecessary concern and more able to bounce back from financial challenges.

For example, if you notice a dip in the performance of your investments, taking a mindful moment could provide valuable clarity and perspective. Instead of reacting emotionally to short-term fluctuations in the market, you might be able to accept that a degree of market volatility is inevitable. This could reduce feelings of stress and allow you to stick to your long-term plan.

Get in touch

To find out more about how to create a financial plan that gives you a sense of calm and valuable peace of mind, please get in touch. Email or call us on 01454 416653.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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