Are you mindful with your money?

Young woman wearing a pink sweatshirt with her arms outstretched in front of a yellow wall

Are you mindful with your money?

Why money mindfulness could help boost your personal finances

Three cheers for your brain. It’s great at knowing your favourite takeaway, which new smartphone you fancy and how much you deserve a payday treat. But it’s not always on your side, especially when it comes to money and helping to take control of your Moneyverse. Our brains are also wired to be impulsive and reactive as well as logical and prudent – which isn’t ideal when we’re trying to spend less and save more.

If this spending struggle sounds familiar, why not see if money mindfulness can work for you? The aim is to face up to your spending, stay in control of it and save money. Even better, mindfulness could help tackle the fear and anxiety some of us feel about our finances. And – in case you’re wondering - there’s no meditation required.

What is money mindfulness?

Mindfulness isn’t new – it’s been an element of Eastern belief systems for thousands of years. But it’s become particularly popular in Western societies over the last decade, as part of the trend towards better mental health and work-life balance. Mindfulness means being aware of your thoughts and feelings in the present moment, without getting stressed about them. And money mindfulness can help us switch our brains off autopilot and become more aware of how we spend and save. This means that, rather than stick to the same old habits or let our emotions dictate what we buy, a mindful approach could help us to make better decisions that pay off in the long run. Basically, you’ve got to stare your finances in the face – and not run away from what you see. It might seem scary at first, but it’ll get much easier.

Why emotions and beliefs influence our finances

How our personalities and emotions affect our finances is an exciting area of neuroscience research, with lots of theories in play. Here’s one example: according to Harvard professor Gerald Zaltman, a huge 95% of our purchasing decisions take place in our unconscious minds. We think we’re being completely rational – but we’re actually led by our emotions, past experiences and most deeply held beliefs. Much as we like to think we’re in control of our cash, there’s plenty to suggest otherwise.

Consider how we make decisions: psychologist and Nobel Prize winner Daniel Kahneman says our brains run on two systems. There’s System 1, which is immediate, instinctive and emotion-driven, and tells us to order that pizza right now. And then there’s System 2, which is logical and thoughtful – but slower to react. By the time System 2 has reminded us of the leftovers in the fridge, we’ve already hit ‘order’. The idea is that System 1 worked brilliantly when we were hunter-gatherers facing constant threats – but it’s not so great for modern life, which requires much more planning for the future.

How mindfulness can help with your approach to money

Pizza and sabre-toothed tigers aside, what does all of this mean for your finances? In a nutshell, we can use money mindfulness techniques to effectively outsmart our own brains and override our emotional reactions. If we’re more aware of how, when and why we spend, then it’s much easier for us to make rational, considered decisions – and stay in control. It’s bad news for your favourite takeaway, but great news for your future and making money work for you. Mindfulness could help you smash your savings goals and feel more confident and relaxed about your cash.

‘Make peace’ with money to change your attitude…

You could simply look at your bank balance every day and try to pause before making a purchase. But it’s quite tricky to transform your habits just like that. Fortunately, there are tried-and-tested techniques to help you master a mindful approach. Take the teachings of Japanese author Ken Honda, aka ‘the Zen Millionaire’ and ‘the Marie Kondo of money’.

His method is all about changing our attitudes towards our finances – from a source of anxiety to something that lets us enjoy our lives.

He stresses your spending should align with your identity; who you are and what you value. For example, if health matters a lot to you, then don’t feel guilty about your gym membership. And if buying your partner a gift is an act that makes you feel very happy, then do it.

At the heart of his thinking, Honda urges people to ‘make peace’ with their money – and that means shifting your mindset towards feeling grateful and confident that you have enough.

You might be wondering ‘that sounds lovely, but it won’t pay the electricity bill’. Yet Honda believes that when people feel relaxed and happy about their money, they can make better decisions about it – and learn to think differently about how they value, and use, what they already have.

…and ask yourself four questions each month

There’s another Japanese method you might want to try too – kakeibo. This clever, simple technique was invented in 1904 by Hani Motoko, the country’s first female journalist, as a way of managing household finances. All you need is a pen and notebook. (While apps are great for money management, your smartphone can sit this one out. Many studies show that writing down our goals makes us more likely to achieve them.)

Sit down at the start of each month and ask yourself four questions: how much cash do you have coming in, how much will you spend, how much would you like to save and how can you do better than last month? It’s the last question that makes this method so effective, because it helps you pinpoint how you’d like to improve. And because you’re reflecting on your decisions after a little time, you’re more likely to see them clearly, without guilt or shame muscling in.

This method also prompts you to question yourself before spending money on treats. Do you really need this item? Can you afford it? What made you want to buy it? And how are you feeling today?

With practice, these questions will become automatic – and help you outwit your impulsive, emotional brain. That should help you on the way to only buying things that really bring joy to your life. A 10pm takeaway might not make the cut. But a meal out with old friends in a fancy restaurant that makes memories for years? If you’ve mindfully weighed up all your reasons for buying them, kakeibo says go for it.

Get inspiration to keep you going

Need a little encouragement to keep you on track? Social media is packed with lots of accounts that touch on money mindfulness. If you love positive affirmations and practical tips, you might like @thisgirltalksmoney. There’s also @myfrugalyear, which often highlights the emotional side of money. And for clever visual posts about our psychological quirks, plus some very relatable memes, try @thepennypal. A final tip – be wary of any influencer who promises to reveal info in return for payment. Money mindfulness is an innovative yet straightforward concept which is really all about consistency. You definitely don’t need to spend money to learn the ropes.