Practicing Financial Mindfulness


A few weeks ago I started using the app Headspace to practice a daily meditation habit.

It’s been challenging. As I practice, I find my brain racing from thought to thought, seemingly doing everything it can to think about anything other than the meditation I’m supposed to be doing.

At first I considered that a failure. But one of the lessons Headspace teaches you early on is that meditation isn’t about controlling your thoughts, or turning them off, or anything like that.

It’s really about the simple act of noticing them. You learn how to observe your thoughts, take note of what they are, and let them pass as you gently bring your focus back to your breath.

It’s an exercise in mindfulness rather than control. Instead of feeling guilty when my mind wanders, like I’m “bad” at meditating, I’m learning to simply recognize that it’s happening.

That practice has been pretty eye-opening. Because what I’ve found is that by letting go of the idea of control and focusing instead on observation, some of these distracting thoughts and anxieties have naturally started to resolve themselves.

Simply noticing that they exist has caused them to go away, or at least to improve, without any real effort on my part to create change.

The problem with control

You can use this idea of mindfulness instead of control to improve your financial life as well.

As an example, let’s take a look at one of the biggest topics in personal finance: budgeting.

“Create a budget” is almost always the first thing every financial expert recommends, and it’s almost always the cause of problems for anyone who’s just starting to work on their financial situation:

  1. The underlying assumption is that you can predict every expense, control every cost, and generally have every penny accounted for and handled ahead of time.
  2. You can’t. Life is unpredictable and unexpected things happen all of the time.
  3. You especially can’t if you’ve never tried budgeting before.
  4. Because the underlying assumption is wrong, you will almost certainly fail to stay on budget.
  5. When that happens, most people feel like failures and give up altogether.

This would be like me assuming that meditation is about rigidly controlling my thoughts, thinking I’m a failure for not immediately being able to do that, giving up on the practice, and missing out on all the potential benefits.

Flipping the script

Instead of trying to take control, what would happen if you simply focused on noticing your financial habits?

How much money is coming in? Where is it going? No attempt to control or judge anything as good or bad. Just notice and become aware of what’s happening.

I can tell you both from personal experience and from doing this with my clients that building that awareness almost always leads to positive change.

And it’s not because change is forced upon you or because you go to great lengths to make it happen. It’s simply because you start to see how your habits do or don’t align with your biggest financial goals, which naturally leads to small changes in day-to-day habits that lead to big changes in your financial situation over time.

And because there’s no effort to control or judge your current spending patterns, it’s also a lot more likely to stick. When you don’t immediately feel like a failure, you’re a lot more likely to keep going.

How to practice financial mindfulness

So, how can you practice financial mindfulness in your own life? Here are some ideas:

  1. Sign up for a service like or YNAB, or grab a spreadsheet to help you organize things.
  2. Link your accounts or make a list of the accounts you’d like to track.
  3. Start by categorizing the past month’s worth of expenses. Sum them up by category and spend a few minutes looking at the results.
  4. Create reminders to categorize your recent transactions each week and sum them up by category each month.
  5. If you’d like to go one step further, you can track your net worth as well.

Notice that there’s nothing in there about taking control or making changes. That isn’t the point of this exercise, and honestly I think it should be avoided as you start out.

This is simply about building an awareness of your current financial situation. It’s about practicing financial mindfulness.

Give it a shot. I’m guessing you’ll like the results.

Start building a better financial future with the resource I wish I had when I was starting my family. It’s free!

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