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Financial Mindfulness

financial awareness
❝Sit, and know you are sitting...Breathe, and know you are breathing.❞ -Joseph Goldstein

I'm sitting on my couch listening to a guided meditation by Joseph Goldstein. I've been meditating for over five years now, so I'm pretty familiar with mindfulness meditation. Mr. Goldstein's approach is slightly different from what I'm used to.

Mindfulness meditation, at its core, is about paying very close attention to the contents of consciousness. That includes sounds, feelings, thoughts, emotions, and even bodily sensations. People who are advanced are able to feel the raw sensations of, say, anger as patterns of energy in their bodies.

The meditation teachers on the apps and videos that I've used so far have done a pretty good job teaching me this. In the earlier stages of learning, I was taught to pay careful attention to what it feels like to breathe. Later, the lessons turned to paying careful attention to what it feels like to sit, to feel what my body feels like while it's resting in space.

Joseph Goldstein has a way of teaching this that I have not heard before. Instead of instructing me to pay close attention to my breath, he simply said to breathe, and know that I'm breathing. Instead of telling me to pay attention to the sensations of sitting, he instructed me to sit, and know that I'm sitting.

This distinction made a lot of sense to me. It taught me that to live mindfully, it's important to understand that whatever we do, know that we're doing it.

This insight can apply to our finances.


Mindfulness meditation is simply practice for living mindfully. It trains our awareness, attention, and concentration. The word mindfulness tends to be used in many ways lately, so its meaning can be all over the board. It's helpful to think about it in the following way: the opposite of being mindful is being mindless.

To demonstrate this, ask yourself what you're thinking about right now. Most of us live our lives talking to ourselves. In fact, if we had a friend following us around that talked to us as much as we talk to ourselves, we would hate that person. Yet, we do it all the time. We think without knowing what we're thinking; we're constantly lost in thought.

Mindfulness helps break that pattern. There's nothing wrong with thinking; thinking is necessary. The problem is when we think without knowing that we're thinking.


Financial Mindfulness

We can apply the same idea to our financial decisions. Too many of us make financial decisions without knowing that we're making financial decisions. We get to the end of the month and wonder where our money went. We accept jobs, promotions, and projects at work without fully understanding what we have to give up to get those. We use our money in a way that doesn't support our values. We make purchases we think we're supposed to make, either because we believe other people judge us or because we believe they will make us happy.

Good financial decisions come to us when we are aware that we are making financial decisions and aware of the consequences - both good and bad - of those decisions.

financial mindfulness

The Pain of Paying

In the book Dollars and Sense, the authors talk about a concept called the pain of paying. The pain of paying is the sting that we feel when we part with our money.

It used to be that we were very aware of how much we were spending because there was a significant amount of pain associated with it. When we paid with cash, we had to physically count out enough money and hand it over to somebody who would take it out of our hands. Later we would write checks. When you write out a check, you write the amount you are spending at least two times, and sometimes three. Now, we pay by tapping our phone or a card to a reader, we don't get a receipt, and otherwise have no idea that a transaction just happened. This is not an accident. Living things avoid activities that provide pain, and that includes humans. We will spend less if there is more pain of paying. If retailers and marketers can get rid of the pain of paying, then we will spend more.

pain of paying

Reintroducing Financial Awareness

It's common to see canned personal finance advice that tells you that you should only spend cash, that you should put that cash into an envelope, or that you should track every penny. These techniques work, and that's why they make it onto cheap personal finance articles. The reason these hacks work, though, is simply because they reintroduce the pain of paying. So anything we can do to become more aware of our spending and our financial decisions will reintroduce this pain of pain.

I learned from author Carl Richards a simple trick you can use to reintroduce financial awareness. Since we are largely unaware of how much we are spending, the first step is to bring that spending awareness back into consciousness. Get in the habit of asking for your receipt or looking at your