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Financial mindfulness

Financial mindfulness

Financial mindfulness.

The term mindfulness is used a lot in relation to meditation and psychological therapies to describe being aware and paying attention. But what is financial mindfulness?

Financial mindfulness is simply described as having awareness and paying attention to your finances and financial behaviours. It means more than being money smart or financially savvy, as it includes the capacity to regulate emotional responses that can lead to unhelpful financial behaviour and financial stress.

It not necessarily about having a good financial position or good financial health, but an active process of being aware of and paying attention to your thoughts, feelings and financial behaviours in a way that is helpful.

Financial mindfulness is related to the term financial wellbeing, which is broadly defined as “satisfaction with your financial situation”. Financial mindfulness does include financial wellbeing, but also includes financial stress, their symptoms and behaviours.

Financial mindfulness is a practice that can lead you to financial wellness.  Wellness refers to the mindset formed from the way a person evaluates their finances and how it makes them feel. Mindfulness is the process of paying attention to your finances and taking appropriate positive action so that you can achieve financial wellness.

To summarise, Financial mindfulness, is an active process of paying attention to your finances, financial behaviours, attitudes and beliefs around finances. It is keeping awareness of your thoughts, feelings, actions and financial environment in mind so that you can make better financial choices.

Financial mindfulness helps you to focus on what you need to do, empowers you to make sound decisions, and ultimately invest in your financial wellbeing.

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Financial stress is widespread

Financial stress is widespread

Financial stress is widespread

Money worries are common. They existed before COVID-19 and now with changes in our employment and society, financial stress has become more widespread.

The Australian Psychological Society reports that financial stress is one of the major causes of stress in adults, and recently published research on the Financial Stress Index (FSI) from Financial Mindfulness, indicates an escalation of financial stress symptoms due to COVID-19 including negative impacts on relationships.

Financial stress is personal and impacts all areas of our lives. It is something we experience regarding our financial situation today or our financial future.

It also involves our thoughts about money and finances and what we do in terms of spending and saving, and how we manage our finances. 

Financial stress can arise during short term specific financial demands such as change in employment, or from a chronic and long-term financial concern, such as increasing debt with interest repayments or difficulty repaying a home mortgage.

The problem with financial stress is that it does not just impact our finances, it can have a significant effect on our wellbeing including our physical and mental health along with our relationships, work, behaviour and potentially our environment.

Some signs that financial stress is affecting your health, work and relationships include arguing with the people closest to you about money, becoming aggressive to others,  difficulty sleeping, feeling downhearted, overwhelmed, angry or fearful, mood swings, tiredness, loss of appetite, and withdrawing from others.

While these reactions affect your overall wellbeing, if they continue for a prolonged period of time, they could turn into serious health issues.  The important thing is to seek appropriate help.

People from all walks of life may experience problems with their finances at some stage in their lives. It is not something to feel embarrassed or ashamed about, especially as those feelings can stop people from getting the assistance they need.

Financial mindfulness means being aware and paying attention to your finances, and that may mean seeking help. The help required will vary from individuals. It may be practical financial support, or learning budgeting skills, or seeking assistance to manage the stress of money worries.

The first step to being financially aware is to determine how stressed you are by your finances. Our unique Financial Stress Index (FSI) designed by a team of Neuropsychologists and financial experts works out your financial stress levels and potential symptoms.

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Australians distressed and acting aggressively to others

Australians distressed and acting aggressively to others

Australians distressed and acting aggressively to others.

These are the findings from the latest Financial Mindfulness Financial Stress Index (FSI) report which has tracked financial stress in detail over the last 12 months and captured the impact from the COVID-19 pandemic.

An estimated 2.29 million Australians are experiencing levels of financial stress that reduce their wellbeing and capacity to function and it is dragging on the Australian economy.

The lost productivity costs Australian business an estimated $32.14 billion per annum. Key findings from the Financial Mindfulness FSI report during COVID-19* include:

      • 8.76x increase in people always acting “aggressively towards others because of my financial position”
      • There has been an 8.25x increase in those Distressed during COVID19 times from pre COVID-19
      • A 290% increase for always feeling isolated
      • 151% increase in those always finding it hard to ‘wind down’
      • Worry, feelings of tension and agitation increased
      • Increases in people who always or sometimes “experienced conflict with a loved one about money matters”.

The other key findings from the Financial Mindfulness FSI Report were:

      • A large proportion feel worried (89%), overwhelmed (79%), and downhearted (82%) about their financial situation
      • 69% of people say financial stress has negatively impacted their relationships
      • 64% experienced conflict with loved ones
      • 50% could not meet all of their weekly expenses
      • 77% of people are distracted because of financial concerns
      • 62% of people are having difficulty sleeping
      • 50% of people ate, drank, smoked more due to their financial situation.

“The Financial Stress Index (FSI) is a comprehensive measure of the financial factors and biopsychosocial consequences of financial stress developed by Financial Mindfulness,” says Dr Nicola Gates, Consultant Clinical Neuropsychologist at Financial Mindfulness.

“A worrying result has been the significant escalation of people always acting aggressively towards others and the negative impact on relationships in general.”

The company’s Founder and CEO, Andrew Fleming says “Financial stress was a significant problem before the COVID-19 pandemic, but we now can see the increased damage it is having on individuals and work productivity.”

“It is staggering to see how much financial stress is impacting mental and physical health, relationships and work.”

“We developed the Financial Stress Index (FSI) to understand financial stress at a granular level in order to build a solution. Our solution is the Financial Mindfulness App, a personalised program which reduces financial stress,” Fleming says.

The Financial Mindfulness FSI is a leading indicator on financial stress and will be reported every six months to measure changes in Australians’ financial stress levels.

*Data compares user responses in the periods August 2019 to February 2020, with March to August 2020.