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How Does Mindfulness Impact How You Manage Your Money?

New research suggests that mindfulness may make you less likely to focus on your financial future. But some experts believe that assertion is flawed.

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Yoga people don’t focus on material things. 

Practitioners live in the present moment and don’t need to worry about the future. 

People who practice mindfulness are content and unconcerned with money.

At least those are the myths. But is there a connection between mindfulness and money management? A 2021 study, “Being Present: The Influence of Mindfulness on Financial Decisions,” concluded that people who practice mindfulness allocate less money toward investments that bring higher yields. They also made less efficient investment portfolio-trading decisions.

But those who practice and teach mindfulness think the study is flawed.

Mindful money practices take time

In the study, conducted by researchers at the University of Kansas and Marquette University, subjects participated in either a 5-minute meditation recording or a mind-wandering session. Then they made some financial decisions. Those who participated in meditation put as much as 20 percent more toward near-term consumption than the control group did. The researchers concluded that living in the moment encourages people to spend now instead of plan for later. But experts say that the study takes a simplistic look at mindfulness, and note that the practice can actually have a positive effect on one’s financial future.

“To call a five-minute recording ‘practicing mindfulness’ is wrong,” says Saundra Davis, a founding member of the Financial Therapy Association (FTA), an organization that brings therapists and financial planners together to help individuals develop financial plans and create the right mindset to stick with them.

Davis says the experiment used a relaxation method—but that shouldn’t be confused with a mindfulness practice. “It negates what mindfulness is really about,” she says.

Chioma Njoku, a yoga instructor and financial counselor, agrees. “It takes time to really get into these practices,” she says. “Declaring mindful practices to be detrimental to one’s finances because some people in their study chose to take care of their immediate needs is a huge assumption and downright irresponsible.”

The confusion may be rooted misconceptions about what it means to follow the eight limbs of yoga and other yoga philosophies. If you interpret aparigraha (non-grasping) to mean you shouldn’t save, or think santosha (contentment) is opposed to the idea of having aspirations, you could develop a conflicted relationship with money.

How to invest with intention

“When people understand the point of investing, mindfulness does not have a negative impact on their desire to do so. The mindfulness practice supports the plan,” says Davis.

A mindfulness practice may reveal your unique calling—and creating a strong financial plan might help you reach the things you are called to do. Most would agree that following yoga philosophy doesn’t mean you can’t save for a home with space for a yoga room or a plan that allows you to be comfortable and well-cared-for in your golden years.

Njoku says meditation, journaling, affirmations, and asana are empowerment tools that help reduce anxiety and stress where finances are concerned. And she’s experienced this firsthand. After getting laid off from a well-paying corporate accounting job, Njoku became a yoga instructor, making just $350 a month. Even after moving in with her parents, she had to choose between putting gas in the car or feeding her dog. The dog won, but Njoku realized she had to make some changes.

She applied her mindful practice to her financial planning, and saw her money problems turn around. “The mindful practices have helped me every step of the way. They continue to help me remove money blocks,” she says. Realizing she wasn’t the only yogi dealing with financial issues, Njoku started The Mindful Bookkeeper to help yoga teachers and other business owners develop a healthier relationship with money.

More research on meditation and mindfulness

Although she may not agree with the study’s methodology, Davis applauds the researchers’ efforts in studying this area. “As mindfulness becomes popular, it’s important to understand how it shows up in all areas of our lives,” she says.

The study authors have already thought about how to conduct a long-term study. That could mean gleaning data from mindfulness apps. “We might be able to link user information to credit profiles and study how users’ financing decisions vary before and after they begin using the app,” says Kevin Pisciotta, one of the study’s authors. “We think the information is useful for thinking about the immediate effects of a more mindful state; more research is needed to understand the long-term consequences of frequent mindfulness meditation.”

Finding financial freedom

Financial advisers like Davis and Njoku suggest that good financial decisions in the present promise contentment in the future. Here are some ways to incorporate mindfulness into your fiscal decisions.

Develop self awareness. Mindfulness practices focus on noticing what is going on in your mind and your body. Practices like meditation and journaling can highlight hidden strengths and challenges about money. It can help you identify your core beliefs and help you realize whether habits and behaviors are harming or helping you financially.

Hone your future focus. While being present is the cornerstone of mindfulness practice, the practice also allows us to hold a vision  for our highest and best good. We can set our intention for how we want to live, what we want to do, and what we can “be” with our financial resources.

Use yogic principles. You can use the yamas and niyamas to guide your financial choices. Apply saucha to keeping clean records, and use tapas to develop financial discipline. Look for ways to practice asteya (non-stealing) and aparigraha (non-grasping), by making room for acts of generosity.

Choose a partner in practice. You’ll feel more content with your choices if your financial adviser, investment company, bank, or investment club shares your values. There are a number of financial institutions that focus on social good, sustainability, and community investment.

Be consistent. Our practices are just that—practice. And that includes your financial practices. Once you have a solid fiscal plan in place, you can trust yourself to execute the plan consistently to achieve our desired outcomes.

See also: Mindful Money Tips to Inspire Financial Security