Think mindfulness and money don’t mix? Think again.
Sure, mindfulness might conjure up images of sitting in a lotus position with eyes closed and counting breaths. But mindfulness is about being in the present moment, focusing on your thoughts and feelings – including your relationship with money.
When it comes to money mindfulness, there are three main strategies: tracking, budgeting, and spending.
1. Track your spending
The first step is to track your spending. This means recording every purchase – no matter how small – in a spending journal or spreadsheet.
How to start tracking your money
Keep a spending journal. Write down everything you spend for a week or month, and then look closely at your patterns. Not into all the extra work? Yeah, neither am I. Try downloading a money tracking app that automatically pulls your transactions through a secure connection with Plaid. Then, check out where you can cut back.
Not only does this help you become more aware of where your money is going, but it also makes you more mindful of the decisions you’re making when it comes to spending.
Reflect on how it made you feel
Meet transaction swiping! Become more in tune with how you feel about your spending. You’ll review and reflect on every purchase, connecting the cost of what you pay financially with what it costs you emotionally.
When we practice daily, digestible financial habits, we’re 10x more likely to achieve our financial goals. Also, when we pay attention to our habits and behavioral trends, we’re 10x more likely to save.
2. Plan what to do with your money
The second step is budgeting your money. This means allocating a specific monthly amount for certain expenses, such as groceries, gas, or rent. This helps you stay within your limits and prevents you from overspending.
Make a budget and stick to it. By categorizing your spending, you increase your mental accounting. In other words, you’re more aware of how much you spend and what you spend it on. Hello, money mindfulness!
Start with a budget calculated from the history of your connected accounts. Then, organize it to create a plan that helps you reach your goals!
3. Spend mindfully
The third step is spending mindfully, or being aware of the consequences of your spending. Are you buying something because you need it or because you want it? Will this purchase help you reach your goals, or are you only satisfying a short-term craving?
Be mindful when making big purchases. When considering a big purchase, take the time to ask yourself whether it’s something you need or want. If it’s a want, create a savings goal and try some of these pro tips for saving more.
By practicing mindfulness with your money, you can save more, spend less, and reduce your stress. So what are you waiting for? Start tracking, budgeting, and spending mindfully today!