Mindfulness and Financial Decision Making

“Mindfulness” is the buzz-word nowadays. It means being aware of your mental state in the present moment and conscious of your thoughts, feelings, physical sensations of your body and all that is going on around you.

It might sound strange to talk about “mindfulness” in the same sentence as “making the right financial decisions” but in fact it can be an incredibly useful technique to focus your thoughts and to give you a chance to re-examine your reasons for making that purchase – before you come to regret it.

For example, are you someone who acts on impulse? Do you get distracted by the site of colourful “ON SALE” signs and find yourself rushing out and buying clothes and other ‘stuff ‘that you never use afterwards?

Or do you find yourself signing store credit card contracts without bothering to read the fine print only to find afterwards that the interest rates are astronomical and that it wasn’t such a good idea to sign after all?

Or are you someone who goes into a supermarket feeling hungry and comes out with twice as much food as you really need to buy for the week. All those tempting goodies on display compound with the growling, empty feeling in your stomach and just the idea of the sheer delight of eating all that you see overcomes any more prosaic desires to restrict your spending to the mere essentials.

Being “mindful” in any of these situations can be a useful way to take a step back from what you are about to do and question your motivation so that you can be sure if you go ahead and buy or sign you are doing it for the right reasons.

In other words, mindfulness gives you time to distance yourself and the chance to walk away before you come to regret spending more money than you can really afford.

How to be Mindful

  1. Stop what you are doing.
  2. Take a good, long, slow look around you and mentally note all that is going on.
  3. Be aware of how you are feeling. Are you calm and contented? Wildly happy? Agitated? Did you argue with your wife/boyfriend/family before you came into the store?
  4. Look at what you are about to buy. Have you been swept away by the sales pitch and are about to spend more on the item than you can really afford? Is it really something you need or are you trying to make yourself feel better?
  5. Be aware that you are in a place where the main purpose is commerce – the reason that the sales person is being so pleasant and attentive is not so much that they want to be your friend but rather that they are looking to make money out of you. That friendly manner is all part of the sales pitch, not a reflection on how attractive you are as a person.
  6. What would happen if you didn’t decide to buy today but instead postpone the decision? Can you come back tomorrow or later in the week to buy the item in question? What would change? Would it really make a huge difference to your life?
  7. What if instead of spending you choose to save the money instead? What are your long-term financial goals? Are you saving for a deposit on a house? Is one of your aims this year to expedite your mortgage by making an extra payment whenever you can?
  8. Give yourself at least five-ten minutes to consciously run through your thoughts like this so that you are aware of all the arguments both for and against making the purchase.
  9. Turn around and walk away if anyone tries to rush you into making any type of financial decision that may later come back to haunt you.

Being mindful when making financial decisions can make all the difference between staying on track and advancing steadily towards your long term goals, or getting distracted and wastefully spending money in a way that you will later regret.

For more practical advice on wise ways to reduce your spending, please contact our experts at Best Mortgage Montreal.

We have years of experience advising our clients how to save on the costs of borrowing money to build a sound and comfortable financial future.

For more information telephone 1 855 777 1711, 1 (514) 994-1030, or 1 (514) 819-9181

e-mail us at sales@bestmortgagemontreal.com

or come and talk to us at 1100 rue University, bureau 104, Montreal, Quebec, H3B 3A5.

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