Solomon Halpern

Making your financial decisions in a mindful context can change your life for the better. The open, aware state of mind that defines mindfulness is the perfect container for the rigor and clarity which benefit financial decision making. In this context, personal experiences and emotions become valuable information rather than distractions or false signals. Mindfulness is characterized by a gentle, non-judgmental awareness of the present moment. Meditation practice is the most reliable and commonplace method to arouse mindfulness. Providing a container of mindfulness around financial matters is the practice of Mindful Finance. The premise here is that paying attention to your personal experiences, as they occur in your financial life, is valuable. The reason this activity is valuable is because those experiences are full of information. Our bodies and minds have an almost autonomous response to situations. From a Mindful Finance perspective these responses should not be shut down and ignored. Instead, they need to be met with mental equilibrium, to be observed for the messages that they are indicating. Sometimes a feeling of unease is an indicator of a decision that is against your better judgement. Other times it may be an indicator of stepping out of a habitual pattern in a way that you believe will lead to personal growth. Sometimes a feeling of unease is an indicator of a decision that is against your better judgement. Other times it may be an indicator of stepping out of a habitual pattern in a way that you believe will lead to personal growth. In the first case this would be cause to take pause, in the latter it would be welcomed. In either case ignoring the feeling is not helpful to making good decisions. Recoupling our personal experience with our financial life bridges the rift that can exist between our financial selves and our human selves, and can minimize the confusion caused by money matters. In this way we assert our agency in relation to financial matters and become empowered. This empowerment is rooted in the fact that we can be aware of the information provided by our experience and then make financial decisions which are in line with our true needs and goals. Jason Voss, Director of Content at the Chartered Financial Analyst (CFA) Institute, former star mutual fund manager, and author of the The Intuitive Investor, has identified areas in which challenges arise in relation to finance. Three of these challenge areas are: Stress – financial matters give rise to stress; Mental Obstacles – in the face of complex information it is difficult to think clearly; Emotional Biases – when fight or flight instincts are triggered analytical decision making is often abandoned for reactionary or habitual responses. Most people can relate to all of these challenge areas in their own dealings with financial matters. The question is: How do we meet and overcome these challenges? Somewhat counterintuitively, the answer is not to go out and acquire knowledge that we are lacking; or indeed any other technical fix. The answer instead is to look inside by cultivating the mindfulness that comes from meditation. The practice of meditation is a great way to arouse mindfulness, and has proven benefits which apply to these challenges. “At the CFA Institute, we have created a meditation module because meditation addresses all of these challenges, and has other benefits as well,” Voss says. He continues, “Meditation is also free and portable, which makes it ideal for anyone to adopt and use.” That meditation reduces stress is approaching the status of culturally accepted fact. Perhaps less known is a way to judge the effectiveness of meditation in this respect. There are many studies addressing this from varying angles. In a study whose findings are surprising to many people, Rosenkranz, et.al., found that meditation was more effective at reducing stress than a comprehensive exercise program. This provides a culturally relevant benchmark that is useful to people considering the value of meditation. In regard to working with complex information, common sense tells us that a settled and clear mind has a better chance of separating the wheat from the chaff. Again, the notion that meditation can calm your mind is fairly widely accepted. Less commonly known is that there are measurable physical indicators supporting this notion. There are numerous studies whose findings conclude that meditation augments desirable qualities such as concentration, complex thinking, ability to synthesize information, clarity, creativity, and other attributes that are useful in addressing complexity. Going even further, in a meta-analysis, combining the results from many studies on meditation, Fox et.al. found that meditators brains showed actual physical improvements in the regions associated with these and other valuable traits. Money, Emotions and Financial Decisions. The subject of money and finance tends to produce strong emotions in people. These emotions can span the spectrum – from jealousy, anger and despair, to hope and euphoria. A mindful context provided by meditation can calm the habitual reactions that emotions cause. A study by Lykins & Baer showed that meditators were less judgmental, less reactive, more comfortable with negative emotions, and generally more emotionally intelligent than non-meditators. Engaging with financial matters in a way that is non-judgmental towards oneself and observant of emotions, rather than driven by them, lowers suffering and creates space and equilibrium. This turns emotions into learning experiences which provide important information for making good financial decisions. Essentially, science is “proving” what meditation practitioners have known for thousands of years: that meditation is a great way to improve your life. Not surprisingly, when the benefits of meditation are held up against the challenges people face in relation to their financial decisions, they match up nicely. This usefulness in relation to money matters is not particularly occurring in the meditation practice itself, but rather in the space of mindfulness that meditation engenders. Our finances are often an uncomfortable, confusing, and stressful aspect of life. In fact, this aspect of life is often referred to as our “financial situation” – as in “how is your financial situation?” One definition of a situation is: an important and sudden problem. Another is: a set of circumstances in which one finds oneself. At first read, both of these have a somewhat out of control and negative connotation. With mindfulness we can do a little semantic tai-chi on the second definition, turning our financial situation into a place where we can indeed truly find ourselves. References. Melissa A. Rosenkranz, Richard J. Davidson, Donal G. MacCoon, John F. Sheridan, Ned H. Kalin, Antoine Lutz (2012). A comparison of mindfulness-based stress reduction and an active control in modulation of neurogenic inflammation. Brain, Behavior, and Immunity, Volume 27 (2013) 174–184 Emily L. B. Lykins, MS, Ruth A. Baer, PhD (2009). Psychological Functioning in a Sample of Long-Term Practitioners of Mindfulness Meditation. Journal of Cognitive Psychotherapy: An International Quarterly, Volume 23, Number 3 • 2009 Kieran C.R. Fox, Savannah Nijeboera, Matthew L. Dixona, James L. Flomanb, Melissa Ellamila, Samuel P. Rumaka, Peter Sedlmeierc, Kalina Christoff (2014). Is meditation associated with altered brain structure? A systematic review and meta-analysis of morphometric neuroimaging in meditation practitioners. Neuroscience and Biobehavioral Reviews 43 (2014) 48–73

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Author: Solomon Halpern

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