Mindfulness involves acceptance rather than judging something to be right or wrong.The ancient practice of mindfulness is gaining popularity as a means of reducing stress and anxiety in today's high-pressure environment.
Mindfulness means maintaining moment-by-moment awareness of our thoughts, feelings, and surrounding environment without judging them to be good orbad. Mindfulness involves acceptance rather than judging something to be right or wrong. It has been shown to be linked to happiness, health and psychological wellbeing.
The concept can be used to help make better money decisions. This involves understanding the thoughts and emotions that influence your decisions and learning how to manage them so they don't have a negative impact. For example, if you are feeling highly optimistic because everything seems to be going your way you may be tempted to take on more risks.
If you are motivated by a desire to be seen as successful by other people, you may be tempted to buy things you can't afford.
Reluctance to admit mistakes and fear of failure can lead people to hold on to poor performing investments that should be sold. Spending causes some people to get an emotional high which can lead to problems with managing debt. Reluctance to change can lead to the continuance of bad money habits.
The first step is to be aware of the thoughts and feelings that influence the choices we make. Awareness allows us to then look at the impact of those feelings and find ways to help reduce negative influences. Techniques for doing this might be as simple as avoiding making financial decisions at a time of high optimism, or balancing strong positive or negative feelings with objective analyses before making a decision.
* Liz Koh is an authorised financial adviser. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free by calling 0800 273 847. For free e-books see moneymax.co.nz and moneymaxcoach.com
