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Get Zen With Your Money

Can applying the tenets of tai chi improve your finances? More importantly, can this tai chi analogy carry an entire article? Well, it's worth a try, particularly if you haven't achieved financial zen using conventional medicine (e.g. budgeting software; reams of articles about money management).

The goal of this ancient Chinese art of spiritual awakening is to open the mind (and muscles) through a series of slow movements to improve energy flow. Applying the same principles to managing money would, theoretically, mean improving cash flow and the ability to move more gracefully from one financial issue to the next. The result: inner money peace!

Stick with me -- there really are similarities. Consider what it requires to achieve the ultimate state of zen in both tai chi and finances: commitment, concentration, and insight. So light the incense, roll out the tatami mat, don some hemp garments, and let's find our money chi.

1. Get in the right head space. Where do you start on the path to financial zen? At the beginning, of course. Take a moment to reflect about your lifelong relationship with money. You know that footage of past financial experiences racing through your subconscious? Slow it down and see what story it tells. Don't be surprised if you discover a straight line that starts at your childhood (how you saw your parents handle money issues, for example) and leads directly to your present financial affairs.

2. Look at your situation in the third person. We all have baggage. Try to detach your emotions from your current money situation. Figure out which bags you can leave on the luggage carousel, and which will continue to serve you well. If it helps, think about how a neutral third party would describe your financial situation.

Of course, your invisible money buddy needs raw numbers and concrete data to give you an honest assessment. Use this "60-Second Guide to Budgeting" shortcut if you have no idea where you spent your last $100 in cash. And if you want insights from a financial pro, seek the help of a fee-only financial advisor who is paid by the hour or per project, not by commission. (The Garrett Planning Network is offering a limited-time 10% discount for new Motley Fool clients.)

3. Direct the flow of your dough. Money does not control you; you control the money, Grasshopper. You do that by setting goals. Sure, it sounds simple, but failure to form an honest list of your future wants and needs -- and how much cash they'll require -- can put a serious crimp in your chi. (Here's how one fellow Fool juggles her financial goals.) When you set specific goals, you propel yourself toward that enlightened state of financial peace of mind, because they give you:

  • A concrete reason to continue to work to improve your cash flow.
  • A more purposeful savings plan because you know exactly where to direct your money.
  • Specific achievements to strive for and celebrate.

4. Stay on your path toward financial enlightenment. You plotted your way when your resolve was strong. But there will be times when you'll be tempted to stray (lured off course by that new-car smell or a sweet sale at the electronics store). Stay strong. Make sure you have both short- and long-term goals -- a mix of time frames that reward your financial discipline at regular intervals.

If it helps, carry around a list of your goals, so that with every dollar you spend your cash is directed toward the things that bring you joy. If you don't mind the cleaning lady psychoanalyzing your lifestyle, post your list of goals -- including the dates by which you want to achieve them -- on the fridge or your bathroom mirror.

5. Don't let your ninja reflexes atrophy. Life happens, goals change, furnaces break, cars need new transmissions, and the list goes on. Prevent permanent injury to your financial well-being by staying on top of your finances with regular check-ins. Put reminders on your calendar, and, unlike that spinning class, don't skip just because something good is on TV. The best way to handle emergencies is to stop financial disasters before they strike. Do that by having an adequately stocked emergency fund. (Here's guidance on how much is enough.)

Bask in your enlightened financial state
Pursuing even a few of the exercises above will improve your mastery of money. Just try it. The simple act of becoming more financially aware removes a lot of the angst that you may be feeling about household finances, and gives you the proper footing to move seamlessly into your next pose.

If you need more guidance in finding your money chi, The Garrett Planning Network is offering a limited-time 10% discount for new Motley Fool clients. Just click this link, search your state, and look for the Motley Fool icon to identify participating advisors.

Dayana Yochim swears she is going to take her yoga mat out of her trunk and actually use it in 2010. Click here to read The Motley Fool's enlightened disclosure policy.


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