THE BLOG
04/23/2014 12:33 EDT | Updated 06/23/2014 05:59 EDT

How to Spend Money Mindfully

Making mindless decisions with our money may create short term bliss or satisfaction but can have long term impacts on our financial well-being and financial security. When we make mindless decisions with our money, we don't take the time to really understand our thoughts, feelings and actions around our choices.

It's time to relax, and for most of us, watching TV helps to decompress a day's events with mindless TV programs or perhaps some me time surfing the net, shopping, or indulging in calorie loaded snacking? We make choices with our time to escape but what about what's coming next -- it's almost the end of another month and time is needed to plan bill payments and what's next.

Take the time to relax, but then plan ahead. Don't feel stressed, overwhelmed and pressured -- take charge. People are distracted, multi-tasking, not living in the moment and engaging in behaviours that are mindless and keep us stuck. It's time to make a mindful choice.

Making mindless decisions with our money may create short term bliss or satisfaction but can have long term impacts on our financial well-being and financial security. When we make mindless decisions with our money, we don't take the time to really understand our thoughts, feelings and actions around our choices. Who has time to keep track of their spending? Yet, time is well spent evaluating the various emotions, daily events, situations and activities that might trigger mindless spending. Without realizing it, our emotions can have a profound influence on our actions. It doesn't matter how much money you have or make -- all of us are vulnerable to engaging in mindless behaviour.

Our automatic habits promote mindless behaviour. To illuminate the bigger picture, there are three key money challenges we face today:

1) We are not aware of our choices. We make mindless money decisions;

2) Our money and spending plan/budgeting are concepts that don't appear real; and

3) We are removed at the point of sale from feeling the pain associated with spending.

Wikipedia states that the word "mindful" comes from the "psychological concept of attention and awareness -- being ever present and aware of your thoughts and decision making process, paying attention in a particular way, in the present moment."

Most of us don't spend our money in a mindful way. Rather we are distracted and spend in a self-indulgent way. Money becomes very real when we create a budget, and hold ourselves accountable to a spending plan. The concept of budgeting is old-fashioned something our grandparents did and perhaps not something we do. There are 6 in 10 adults who "don't have a budget" based on recent statistics. How can we manage our life without a budget? If we have no idea where our money goes, forget what we bought, lose receipts, and are not careful enough to track our spending, then we engage in mindless waste.

When we control how we spend our time we engage in conscious choice. When we make mindful money decisions we spend our money with purpose and clear direction. We don't squander or waste it. We may make trade-offs but we are conscious of our choices. There is nothing more empowering than being in control of our money, instead of letting it control us. When we engage in mindful spending we are in control of our lives. It empowers us to make good choices. Mindfulness creates peace of mind and it's not a matter of how much you have or earn.

Expert Nina Mazar, an Associate Professor of Marketing at the Rotman School of Management, University of Toronto points out that pain has to be real before people do not repeat poor decision making and poor behaviour choices. Pain has an important role to play in reminding us and protecting us from repeating past money mistakes. We live in a virtually cashless society. We don't feel any pain or remorse when we pull out our debit or credit cards to pay for something. However, if we only pay by cash we cringe when the cash leaves our wallets.

For example, cashless transactions have presented people with a new set of challenges: no one carries cash in their wallets; we rely instead on debit and credit, and conduct most of our transactions electronically. There is relatively little emotion or feeling attached to taking out a credit card or using a line-of-credit debit card from our wallets when making a purchase. Thus, there is little pain or remorse at the point of sale.

However, many of us feel the pain later and buyer's remorse when we receive our statements and find we have overspent. And if we don't track our spending, and loose receipts the problem compounds. Without a plan, we can only afford a minimum payment on our credit cards, or we find ourselves dealing with (future) hardship of foregoing the vacation we planned, missing out on furthering our education, or watching other goals being thwarted due to lack of funds. When money becomes real in our lives we become accountable to ourselves.

Be mindful. Engage in conscious choice. Take control of your money and you won't regret it.

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