Getting mindful: how a little awareness can set your finances free

By Rosie Earl
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Want to stop worrying about money? Stress-free finances could be well within your reach if you put your mind to it.

The new year is a great time for a fresh start, whether it be your diet, your career or your finances. Bad habits can start to sneak in before you know it, so why not use mindfulness to make your fiscal resolutions stick well beyond the January sales?

What’s mindfulness?

Like salted caramel and pulled pork, mindfulness seems to be everywhere now, but don’t let that put you off. It’s actually quite a sensible school of thought. Mindfulness involves you being consciously ‘present’ and paying attention to what is happening in your own life. If you are aware of what is happening, this will allow you to respond more rationally and efficiently to situations. With money, a lack of awareness can have a much more stressful result, and absent-minded spending can lead to heavy debt, so having a fresh mindset about your money could be the fresh start you need.

Awareness

When not fully aware of what’s going on, people tend to catastrophize - that is, look at the worst case scenario. If you want to practice mindfulness with money, the first thing you need to do is be fully aware of what is going on with your cash. Check out your bank statements for the past few months, and familiarise yourself with your incomings and outgoings. Do your expenses exceed your income? Are there any direct debits you don’t need? Once you have an accurate picture of what you’re spending, you can make some cuts if necessary, rather than burying your head in the sand.

Relationship

Have some marriage counselling with your bank account. What makes you spend money? Now, I’m not talking the essentials here, before you say ‘I spend money on my water bill because I have to’, wise guy. I mean when you buy a luxury, possibly unconsciously, why do you do it? Is it because you’re sad and having something new might just cheer you up? If you’re trying to fill an emotional gap with spending, and if you don’t address the underlying problem, I’m sorry to say you’ll just keep spending.

A good trick is to apply a cooling off period for yourself when you’re going to buy a treat. That is, have a good look at it, then put it down and walk away, giving yourself a chance to think about why you want to buy it. Once you have a good understanding of why you want to spend, it will help you to separate what you really want from what you’re just ‘having’. Learn more about the psychology behind why we spend.

Step three: bookkeeping

Mindfulness is a form of meditation, and the key to meditation is focus. A great way to keep focused is to keep track of everything you’re spending and writing it down (like a food diary when you’re trying to lose weight). You could use a pen and paper (if you’re old school), or you can use an app to keep track of exactly where your pennies are going - check out some great ones here.

That way, you can really analyse how much you’re spending on food, entertainment, clothes etc and see where you can make reductions if you’re struggling. Make sure you’re honest with yourself though - there’s no point leaving out the odd sandwich or magazine you buy because it’s ‘only a couple of quid’. This will lead to absent-minded spending, and we’ll be back to step one! Also, those few pounds will soon add up and you’ll find yourself wondering where all the money’s gone!

Step four: Asking for help

So, you’re now mindful of how and why you’re spending money, and you’ve objectively looked to see where you can make cuts, but the books still don’t balance - maybe you need some help. You could speak to a trusted friend or family member, make an appointment at your bank or contact a debt management charity like Step Change to see what your options are. You can also get involved with a great network of savvy folks just like you on the giffgaff money Tip Exchange, who share lots of fantastic money saving ideas.

Although this might not seem like a step in mindfulness, it certainly has a place: when you are aware of a problem, you need to be aware of the solutions so you can resolve and move on. With the clear-headed, objective awareness you’ve got from mindfulness, you’ll be in a great place to work with someone else to resolve the issues. Go you!

Top Takeaway

Mindfulness is a meditation practice that encourages you to be ‘present’ and aware of what is happening in the moment. You can use mindfulness to ensure you are conscious about what you are spending money on, why you are spending, and where you can make savings. This can help stop you spiralling into a stressful mess if you’re in debt, and look for real solutions, either on your own or with support.     

By Rosie Earl

Rosie is a massive geek who loves anything Hello Kitty or penguin related. She writes every day and wants to be Caitlin Moran when she grows up. If she was an animal, she would be a baby dragon (with a solid background in finance). The Sorting Hat would have put her in Hufflepuff, and she is cool with that.

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