I must admit, I am having a blast writing The Personal Finance Playbook. And as it expands, it’s helpful for me to remember the few fundamental reasons why I decided to create it in the first place.
The first reason: I am a personal finance nerd at heart, and proud of it. I happily spend my free time consuming finance books, blogs and podcasts on a near daily basis and truly can’t get enough.
I also recognize that most of you do not share my enthusiasm for the subject matter. So I happily devour the information, dig out the really important stuff and then give it to you in an easy to digest and (hopefully) entertaining format. Win-Win.
Second: I want the playbook to be a resource for when a financial decision needs to be made or when your money situation becomes overwhelming. Whether it’s a financial emergency that pops up, you’re deciding on a car or home purchase, or when all hell seemingly breaks loose in the stock market, my hope is instead of reacting impulsively to these types of situations, the playbook is here for you to help make thoughtful, well-informed, badass financial decisions.
Last and perhaps most importantly, I want to help people improve their lives. While the playbook obviously has a substantial money theme to it, my hope is the concepts here can also be applied to life outside of the financial realm.
Maybe a particular post gives you some renewed self-confidence, or challenges your way of thinking, provides you with an idea, or helps you get back some much needed freedom and control in your life.
That’s my hope anyway.
So against that backdrop, this post is centered around a technique that has helped positively shape my relationship with money but has also made a profound impact in my life.
The technique is meditation.
Now I know there’s a pretty good chance that any momentum I had with you was killed during that last little sentence. I get it. Trust me when I say I was in the same boat only a few years ago. So maybe a little background would be helpful here.
How it all started for me
Let me take you back to September 2016. My five-year relationship had ended the month prior and I was without a job. I was completely overwhelmed by negative emotions most days, drowning in anxiety and the relentless criticism from the voice in my head.
And as luck would have it, I had been fixated on a particular podcast called 10% Happier.
The podcast host, Dan Harris, was a prominent CBS news anchor until he had a panic attack live on Good Morning America, brought on by chronic stress and crazy drug abuse.
After the incident, Dan knew he needed to make a major life change. His quest led him to the most unlikely of solutions: meditation – which he credits for saving his life.
He wrote a book called 10% Happier and hosts a podcast where he interviews people from Anderson Cooper to celebrities and athletes to The Dalai Lama who all credit meditation as key to their happiness, success and quality of life.
And scientific studies seemed to back this. Reduced stress, better physical health, better sleep, a greater sense of wellbeing? Seemed like it was worth a shot.
So after a month of listening, I decided to give meditation a try and downloaded an app called Headspace. Ten minutes a day. I had absolutely nothing to lose. Before day one I made myself a deal: I would meditate each morning for ten days and if I hated it, I could stop on day eleven.
Now I’m not going to lie, the first few sessions were downright messy. Sitting with my eyes closed with just me and my crazy thoughts for ten minutes was so much more difficult than I imagined. Just focus on my breath and when I got distracted by thoughts, gently let them go and return to my breath?
It felt impossible, not to mention ridiculous.
But after a few days it all became slightly more natural and I noticed I was feeling a little calmer during the day. After the ten days was up, I was intrigued and decided to try to hit 21 consecutive days to make it a habit.
And after three weeks of meditating, I really began to feel something. I was more in control of my emotions and had more energy throughout the day. I wasn’t being yanked around as much by every ruthless thought in my head. I was more present minded and began noticing things I never really had before, like how beautiful the trees were on my street.
I unexpectedly started to enjoy meditation.
Now here’s the thing that trips most people up – meditation is not about clearing your mind. The human brain has over 60,000 thoughts a day. Thought creation is as automatic as your heartbeat.
But what meditation does is it helps loosen your grip on your negative thinking and limits the authority of that abusive voice in your head. You begin to see these thoughts arise and then can choose whether or not to attach yourself to them.
It’s all about responding rather than reacting.
Meditation is now a staple in my morning routine. Some sessions are great, many sessions are crazy, but the benefits for me are too good to pass up.
So what does all this have to do with personal finance?
Glad you asked. You see, negative emotions such as stress, fear, and anxiety tend to attach themselves to anything money related and can lead to financial decisions that can range from unhealthy to catastrophic.
For example, most of us know that investing in the stock market can be a gut wrenching and downright scary experience at times. Not only does it go up and down all the time, but when it goes down, you see it everywhere.
On February 5th, 2018 I opened the Wall Street Journal to this lovely message:
BREAKING NEWS: Dow Jones plunges to worst point decline in stock market history.
Instantly, my stomach dropped and my mind raced as I went into a complete panic over my investment portfolio. It actually felt like the world was ending and I began to sweat.
But then I took a breath, zoomed out and realized – this whole crazy chain reaction of emotions started with a thought. And I had the choice whether or not to engage in this particularly ridiculous thought.
So instead of fueling my emotions further, I decided to laugh at my crazy mind. And once I did, all rationality instantly returned. I reminded myself that this isn’t the top and as long I stay the course, save my money and continue to invest, I’ll be absolutely fine.
Taking back control
The stock market is just one example of how emotional decisions or impulses can become the kryptonite to our financial goals. But there are so many others.
Impulses lead us to buy those expensive clothes we never wear. Impulses lead us down the very tempting but dangerous Amazon rabbit hole. Impulses lead us to buying those routine $10 lunches and $5 coffees after innocently peering into the window, or leasing that all-new expensive car with the touchscreen this and the voice command that.
And impulses lead us to sell all of our investments right before the 2016 Presidential Election. Wait, that was just me? Unfortunately I started meditating a month after that brilliant move.
Let’s be real, meditation is not the end-all be-all solution to our problems. It won’t make you rich or completely eliminate your stress. Meditation is simply a tool to help reduce the power of impulses and negative emotions so that they don’t take control over our lives.
Whether you decide to adopt a meditation practice or not, there is a life-changing freedom that comes from choosing not to take the voice in our heads so damn seriously and treating ourselves with a little more compassion instead.
And the more we can develop this skill, the better off we will be not only financially, but also in life.
The Personal Finance Playbook 