The ancient Buddhist practice of mindfulness is gaining popularity as means of reducing stress and anxiety in today’s high pressure environment. Mindfulness means maintaining moment-by moment awareness of our thoughts, feelings, and surrounding environment without judging them to be good or bad. Mindfulness involves acceptance rather than judging something to be right or wrong. It has been shown to be linked to happiness, health and psychological well-being. The concept of mindfulness can be used to help make better money decisions. This involves understanding the thoughts and emotions that influence your money decisions and learning how to manage them so they don’t have a negative impact. For example, if you are feeling highly optimistic because everything seems to be going your way, you may be tempted to take on more risk in the belief that you are so lucky you just can’t lose. If you are motivated by a desire to be seen as successful by other people, you may be tempted to buy things you can’t really afford. Reluctance to admit mistakes and fear of failure can lead people to hold on to poor performing investments that should be sold. Spending money causes some people to get an emotional high which can become addictive and lead to problems with managing debt. Reluctance to change can lead to the continuance of bad money habits.
The first step towards making mindful money decisions is to be aware of the thoughts and feelings that influence the choices we make. Awareness allows us to then look at the impact of those feelings and find ways to help reduce negative influences. Techniques for doing this might be as simple as avoiding making financial decisions at a time of high optimism, or balancing strong positive or negative feelings with objective analysis before making a decision.