Financial Mindfulness: 5 Habits for Better Mental and Fiscal Health

The most common habits associated with mindfulness these days are meditation and Yoga, and that is for good reason. However, Yoga and meditation will not save you from anxiety if your money habits keep putting you in trouble. So, to ensure that your mind remains free from anxiety, it helps to build healthy financial habits, even as you practice general mindfulness.

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1. Be Aware of Your Money Biases, Mindset, and Values

Mindsets, biases, and values drive impulsive behaviours, and that is why becoming financially mindful should begin with identifying and articulating them, and how they were formed.

To illustrate why this is important, here are some common behavioral patterns and how they were formed:

• People who grew up amidst severe lack, and where money was scarce, tend to have very low tolerances for risk. They prefer to maintain safe bets because they’re optimizing for keeping what they have gained, even at the expense of opportunities to gain more.
• People who grew up with wealthy parents, and who aren’t financially mindful, tend to be impulsive spenders, because they have always known money to be there when they desire it. These ones optimize for using money to serve their momentary wants.
• People who grew up in environments where money accorded one prestige and power tend to be willing to do anything to acquire it, even at the detriment of their health and relationships.

Most times, these behavioral patterns are acted out involuntarily, and quitting them is not as simple as willing yourself to stop, as they were entrenched, first in the mind, over many years. Hence, breaking them must begin from the mind.

Outlining your financial values will help you eliminate the unhealthy ones, and to adopt new positive ones which will inform your new goals and habits.

2. Set Goals

After articulating your mindset and biases, the next step in becoming financially mindful is to outline your goals. State in clear terms what you want to achieve with money during the year, and over the next few years. Outline your goals in written form, not just as a mental assent.

Writing out your goals achieves multiple milestones for you, namely:

• It allows you to confront your biases and mindsets directly. By writing your goals and seeing them, you will be forced to provide solutions to tackle the biases that may prevent you from achieving them.
• It forces you to think of new habits you want to build to enable you to achieve them. The longer the time it will take to achieve a financial goal, the more you will need to rely on routines and habits to help you actualize it. Writing the goal out will start you on the way to thinking of new positive habits you want to build.

3. Have a Written Plan and Budget

After outlining your goals, the next positive habit you need to build is to begin to plan your spending and create a budget that you will abide by.

Planning spending habits and budgeting is not only useful for helping you reduce spending. If you have discovered yourself to be too risk-averse for your ambitions, then a financial plan will also help you to ensure that you always spend on the right things, like investments, educational programs, or even leisure activities that you desire. You will be able to do all these without anxiety boring into the back of your head, since you had already planned the spend beforehand, and know that you had also planned out your savings.

4. Build an Emergency Fund

A key characteristic of a healthy financial habit is that it protects you from anxiety and the feeling of overwhelm, and few things in life cause anxiety than unplanned emergency expenses. But this is where having the habit of setting money aside into an emergency fund will protect you. Plan to accumulate three to six months of living costs in this fund as a minimum, and you may exceed this if possible.

5. Manage and Prioritize Debt

The problem with anxiety is that when you’re new to establishing fiscal mindfulness, it can be a trigger to abandon your new habits, and that is why you must protect yourself from things that may trigger while you build your new habits. This is why you should also plan your debt repayment into your new habits. As you do this, prioritise paying off debts as quickly as possible, without jeopardizing your other goals. High-interest debts first, and when you can pay off more than the minimum required, do so.