Money goals

The practice of mindfulness – stepping back to reflect on modern life to calmly focus on what you’re doing at a given moment – has moved into a more unusual domain: money.

Huge interest has been sparked in being ‘financially mindful’ and one method which is increasingly talked about as a remarkably effective way to save money is ‘kakeibo,’ a Japanese term for a household budgeting journal.

In a nutshell, it’s about taking a brutally honest look at your monthly spending and saving – and seeing if your money behaviour means you can meet the goals you set yourself.

A key part of kakeibo’s appeal is down to the belief that you can only really achieve this by dedicating time to writing down and – crucially – reflecting on what you do with your money.

How financial mindfulness can make a difference

At the start of each month, you’ll need to take some time to sit down and work out how much you plan to spend and (if possible) save.

Like any typical budget, you need to answer some basic questions: how much cash do you have coming in, how much are you spending and how much would you like to save?

But it’s a fourth question that sets kakeibo apart – how can you do better?

Say you had a good month and managed to save some cash. The idea is to reflect on how you did this – what helped you save? For example, did you shop around for a better deal, cut back or decide to go without?

Alternatively, what if you had a poor month and ended up badly in the red? Your aim is to find ways to do things differently next month – was there anything you could have done to avoid such a blow?

Take time to examine how you behave with money, the theory goes, and you’ll be better placed to make smarter financial decisions.

Why the government is mindful of Millennials’ attitude to money too

This importance of getting people to understand how to best relate to money has been keenly noted by the MoneyHelper, a free website set up by the government.

It commissioned a report called ‘Young Adults and Money Management: behaviours, attitudes and useful rules of thumb’ using interviews with young adults aged between 16 and 25.

Critically, it highlights the need to make money goals feel achievable, make money advice feel much less of a ‘reprimand’, and clear calls to action to help understand what steps to take.

From the research, it found these to be the best money tips for young adults:

• Aim to build up a savings pot of emergency cash equivalent to three months’ income
• Always take a close look at charges and fees on financial products to check how much you’re paying
• Use a rule called ‘50/30/20’ – spend 50% of what you earn on necessities, 30% on savings, and 20% on luxuries
• Try to save something – no matter how small – into a pension in your twenties
• Start saving cash in a tax-free ISA but never invest in an account or fund you don’t understand
• Don’t buy an item on credit if you wouldn’t pay cash for it