The Mindful Finance Jump Starter

A 5-step plan for cultivating the emotional skills that help you make better money decisions. Photo Club

You and your best friend are out having a long-awaited coffee together to catch up. You’re laughing and telling stories, and than after about an hour she shifts the topic and asks you “How is your financial situation?”

Ouch. Your financial situation? What an awful term. You suddenly tense up and start to feel a rumbling in the pit of your stomach. You don’t really know what to say. She can see the pained expression on your face, so she suggests that you could consult the latest popular financial genius to solve “the problem of your financial situation.” But will that really help with the stress and tension that emerges every time you think about money? Probably not.

What will work much better is to consider not treating your money as an abstract problem and begin to include your personal experiences, emotions, and thoughts at the table when you’re making financial decisions. What will work much better is to bring the open, aware state of mind we call mindfulness into the picture. Our bodies and minds have an almost automatic response to situations—a gut feeling. From a mindful finance perspective, it’s unwise to shut down and ignore these responses. Instead, you can meet them with mental equilibrium and observe the reactions for the messages they can relay.

Sometimes a feeling of unease is an indicator that you’re about to make a decision that’s against your better judgment. Other times it may be an indicator of stepping out of a habitual pattern in a way you believe will lead to personal growth. Ultimately, only you can know the difference. Some mindful finance practice can help you make this assessment, or make peace with the uncertainty of a situation.

Mindfulness allows our personal experiences, narratives, and emotions to become valuable tools rather than distractions to our financial planning. A gentle, non-judgmental awareness of the present moment helps provide a clear space around financial matters and eases the claustrophobia and constriction we so often feel.

Mindfulness allows our personal experiences, narratives, and emotions to become valuable tools rather than distractions to our financial planning.

Reuniting our personal experiences with our financial life bridges the rift that can exist between our financial self and our ordinary human self, and can minimize the confusion caused by money matters. With a mindful finance approach, the essential aspects of your finances are no longer something that a professional can understand but you cannot. Acknowledging your emotional and bodily experiences while making financial decisions provides a compass you can trust to help you make plans that are in line with your resources, needs, and goals. In other words, financial matters require advanced emotional skills that you can cultivate.

The most coveted credential a finance professional can obtain is the Chartered Financial Analyst (CFA) designation. Jason Voss, director of content at the CFA Institute, former star mutual fund manager, and author of The Intuitive Investor, has developed a mindfulness training program for CFA Institute members to address the very difficulties we’re talking about here.

Voss has identified some of the areas where challenges can arise in relation to finances:

  1. Mental obstacles – in the face of complex information it is difficult to think clearly, your brain can get muddied with information overload.
  2. Stress – financial matters give rise to stress.
  3. Emotional biases – when fight or flight instincts are triggered analytical decision making is often abandoned for reactionary or habitual responses.

“At the CFA Institute, we have created a meditation module because meditation addresses all these challenges, and has other benefits as well,” Voss says, adding, “Meditation is also free and portable, which makes it ideal for anyone to adopt and use.”

That’s right, meditating will help you become a better financial planner.

The Research

While meditation has gained the status of culturally accepted wellness practice these days, it’s the scientific research about meditation that’s causing so many in the financial industry to take note. For example:

  • Meditation changes the structure of your brain: In one study, University of British Columbia researchers examined the results of 21 different neuroimaging studies, with information on almost 300 different meditators. They found that 8 different brain regions were consistently altered in meditators in a way that resulted in higher whole-brain functioning. The areas of the brain that showed changes are the frontopolar cortex which is associated with self-awareness, the sensory cortices and insula which are associated with body awareness, areas of the hippocampus which control memory consolidation and recall, the anterior and mid cingulate which are associated with emotional regulation, and the superior longitudinal fasciculus which governs whole-brain, cross-hemisphere communication.
    The take away: Meditation improves your ability to synthesize complex information.

Most financial advisers ignore the enormous elephant sitting right in the middle of the room: our emotions. Thinking or talking about money tends to produce very strong feelings in people that can span the spectrum from jealousy, anger, and despair, to hope, excitement, and euphoria. A mindful finance perspective can calm the unconscious reactions these emotions can elicit. And the research backs this up:

  • Meditation helps you become less reactive and more responsive: A study in the Journal of Cognitive Psychotherapy comparing meditators to non-meditators found that those who regularly meditated every week were less likely to be reactive to failures and set backs, less likely to dwell on the past, and more likely to observe their thoughts and feelings nonjudgmentally and non-reactively and therefore less likely to fear their emotions.
    The take away: Meditation helps you function wisely, even while feeling intense emotions.

Mindful finance allows us to engage with financial matters in a way that allows us to note and observe the emotions that are coming up while not judging those emotions or reacting to them. In this way, our emotions don’t drive our financial decisions from a reactive place, but from a considered space of calm, perceptive equilibrium. Our emotions become learning experiences that provide important information for making good financial decisions. For example, if we can notice and “lean into” our fears rather then push them away, we can gain a better sense of what level of risk we can tolerate in our financial affairs.

The 5-Step Mindful Finance Jump Starter

In order to cultivate mindfulness surrounding your financial life, I suggest you try this exercise:

    1. Schedule a meeting with yourself. Set aside a specific block of time for a meeting with yourself about your finances in a quiet, uplifted setting. Don’t do any other preparation for your meeting.
    2. Take a moment to pause before you begin. Meditate for 5-20 minutes to start your meeting. Here’s a great introduction to how to start practicing meditation from Jack Kornfield. All you need is a quiet spot to sit, and then, just breathe. When you catch your mind wandering, return to the feeling of your breath wherever you feel it most: in your belly, your lungs, or your nose, for example. Cultivate a gentle, non-judgmental awareness of what’s happening and use this frame of mind as a reference point throughout the meeting. When you feel emotions start brewing, notice them and let them pass by without reacting or judging them one way or another.
    3. Try this journaling exercise. Next, write down answers to these prompts—don’t overthink, just write:
      —My personal finances cause me stress because…
      —Some obstacles I currently have in my financial life are…
      —When I think about money and my personal finances I feel…
      —I decided to have this meting with myself because…
      After you’re done writing, tuck your answers away to reflect on later.
    4. Sit in silence. Meditate for 2-10 minutes to end your meeting.
    5. Review your writing. Be curious and gentle towards yourself. Consider telling someone you trust that you had this meeting. Share with them whatever you feel comfortable sharing, in particular about the experience more than specifics. There is no need to share anything you feel uncomfortable sharing.


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