Mindfulness and Positive Reinforcement: The Path to Healthy Financial Habits or “Zending”

Financial Planning Dentist

In today’s fast-paced society, it’s all too easy to fall prey to the temptations of instant gratification. This attitude often trickles down to our financial habits, where we seek immediate pleasure rather than considering long-term consequences. Enter mindfulness: a mental state achieved by focusing on the present moment, while calmly acknowledging and accepting feelings, thoughts, and sensations. By pairing mindfulness with positive reinforcement, we can cultivate a resilient financial mindset and pave the way for healthier savings habits something we are going to call “Zending” (Zen + Spending). You are Zending when you can save, and spend with mindful clarity, you are not spending in a way that inflicts anxiety later about the bill, and you are living in a way that is on your own terms and harmonious. 

What is Mindfulness?

Mindfulness originated from Buddhist meditation but has become a secular practice in recent decades. It’s about being present and fully engaging with the here and now. In the realm of finance, this means making decisions with awareness, rather than on autopilot or driven by impulsive desires.

Why is Mindfulness Relevant to Financial Health?

When we’re not mindful, we tend to make financial decisions based on emotions, societal pressures, or even habits formed in our youth. This often leads to spending beyond our means, not saving adequately, or not investing wisely. By being mindful, we can:

  1. Recognize our financial triggers: Understand what drives our spending habits, be it stress, societal pressures, or emotional needs.
  2. Pause before spending: Taking a moment to reflect before making a purchase can prevent impulsive decisions.
  3. Make intentional choices: Mindfulness allows us to align our financial decisions with our core values and long-term goals.

Positive Reinforcement for Financial Mindfulness

Set yourself up for success, and have a “positive reinforcement” plan in place. It will help when things get hard, and the road feels long. 

Positive reinforcement involves adding a favorable stimulus to encourage the behavior that led to it. By rewarding ourselves for positive financial behaviors, we can reinforce and strengthen our newly-formed habits.

Here’s how you can apply positive reinforcement to encourage a mindful approach to finances:

  1. Set Clear Goals: Start with clear, achievable financial goals, whether it’s saving for a vacation, paying off debt, or building an emergency fund. Breaking these down into smaller, actionable steps can help make the process less daunting.
  2. Reward Milestones: Every time you achieve a financial milestone, no matter how small, celebrate it. This could mean treating yourself to a small luxury, spending time in nature, or even just acknowledging your achievement with a moment of gratitude.
  3. Visual Representation: Create a visual tracker for your savings goals, like a chart or jar where you can see your progress. Watching your savings grow can be its own reward.
  4. Enlist Support: Share your financial goals with friends or family, and celebrate your achievements together. They can serve as accountability partners and cheerleaders, amplifying the sense of accomplishment.
  5. Mindful Spending Rituals: Before making a purchase, take a few deep breaths. Ask yourself if this purchase aligns with your financial goals and values. If it does, go ahead, and if it doesn’t, walk away. Consider this act of restraint as a victory and reward yourself in a non-financial way, like taking a moment to enjoy nature or spending time on a favorite hobby.


Combining mindfulness with positive reinforcement is a potent strategy for fostering healthier financial habits. By being present in our financial decisions and rewarding ourselves for positive changes, we can pave the way for a future of financial stability and well-being. It’s not just about saving money—it’s about cultivating a mindset that values long-term well-being over short-term pleasures.

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Kevin Taylor

Understanding Roth IRAs and the Pro-Rata Rule

Roth Individual Retirement Accounts (IRAs) can be a great addition to your retirement savings plan. Many people use Roth conversions to get around income limits on Roth IRAs. However, there’s a tricky tax rule called the Pro-Rata rule that can make Roth conversions more complicated than you might think. If you’re thinking about doing a Roth conversion or need help with your retirement planning, consider talking to a qualified financial advisor. They can provide valuable guidance. What Is a Roth IRA? A Roth IRA is a special type of retirement account that lets you invest money after you’ve already paid taxes on it. This means you won’t owe any more taxes when you withdraw your money in retirement. But there are some rules about who can contribute to a Roth IRA. For example, in 2022, married couples filing taxes together had to earn less than $214,000 to make full contributions. What Is a Backdoor Roth or Roth IRA Conversion? High-income earners who want to enjoy tax-free withdrawals often use Roth conversions to get around the income limits on regular Roth IRA contributions. Here’s how it works: you take money from a Traditional IRA (where you haven’t paid taxes on it yet), pay taxes on that money, and move it to a Roth IRA. Then, your money can grow tax-free until you retire. People call this a Backdoor Roth conversion. However, Roth conversions can get tricky if you’ve made non-deductible (after-tax) contributions to a Traditional IRA outside of a 401(k) rollover. Understanding the Pro-Rata Rule The Pro-Rata Rule comes into play when deciding how to tax the money you take out of a Traditional IRA and move to a Roth IRA during a conversion. If you’ve never put after-tax money into a Traditional IRA, the entire amount you convert to a Roth IRA will be taxed at your regular income tax rate. This is fairly straightforward. But if your Traditional IRA has both pre-tax (deductible) and after-tax (non-deductible) contributions, the Pro-Rata rule says your Roth conversion will be taxed proportionally based on your pre-tax and after-tax percentages. You can’t choose which funds to convert to avoid the rule. Calculating Your Taxable Percentage With the Pro-Rata Rule Here’s an example: Let’s say you have $100,000 in a Traditional IRA, and $7,000 of that is from after-tax contributions. Since you already paid taxes on the $7,000, the IRS won’t tax it again. But you can’t just convert the after-tax money. To convert $7,000 to a Roth IRA, you need to calculate the taxable percentage. The IRS wants you to include the value of all your non-Roth IRAs as the basis. Here’s the formula: (after-tax amount) / (total of all non-Roth IRA balances) = non-taxable percentage (amount to be converted to Roth IRA) x (non-taxable percentage) = amount of after-tax funds converted to Roth IRA In this case, only 7% of the $100,000 is non-taxable because you’ve already paid taxes on that $7,000. So, if you want to convert $7,000 to a Roth IRA, 93% of the converted amount comes from pre-tax funds, and only 7% comes from after-tax funds. You’ll need to pay taxes on 93%, which is $6,510, of the converted amount. Also, $6,510 of the original non-deductible $7,000 still stays in the Traditional IRA, which could make future withdrawals more complicated.   Roth conversions can be subject to the Pro-Rata rule, which determines how non-Roth IRA funds get taxed when you withdraw them. Some people think they can put after-tax money in a Traditional IRA and then convert it to a Roth IRA to avoid income limits and enjoy tax-free growth. But the Pro-Rata rule stops this. The IRS makes you calculate your taxable contribution percentage and pay a proportionate amount when taking money out of tax-deferred accounts. This can be confusing and lead to unexpected taxes if you’re not aware of the rule.  

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Mastering Risk Management: Rental Properties – A Comprehensive Guide

Owning rental properties can be a lucrative investment, but it also comes with its own set of risks. To effectively manage these risks, it is important to implement proper risk management strategies. In this blog post, we will explore the value of putting your rental property in an LLC, how to best insure your property, the importance of an umbrella policy for property owners, and ways landlords can manage their risk exposures. By mastering risk management in rental properties, you can protect your investment and ensure a smooth and profitable experience. Putting Your Rental Property in an LLC: Asset Protection: Placing your rental property in a limited liability company (LLC) can provide asset protection by separating personal and business liabilities. In the event of legal claims or debt issues, your personal assets may be shielded from potential losses. Consult with Legal Professionals: Seek advice from a qualified attorney experienced in real estate and business law. They can guide you through the process of setting up an LLC and provide insights into the specific legal and tax implications in your jurisdiction. Best Practices for Property Insurance: Adequate Coverage: Ensure you have appropriate property insurance coverage for your rental property. This coverage should include protection against common risks, such as fire, theft, natural disasters, and liability claims. Property Valuation: Regularly assess the value of your property to ensure your insurance coverage accurately reflects its current market value. Adjusting coverage limits as necessary helps mitigate the risk of being underinsured. Liability Protection: Opt for liability coverage within your property insurance policy. This coverage protects you in case of accidents or injuries that occur on your rental property, reducing the risk of costly legal expenses. The Importance of Umbrella Insurance for Property Owners: Extra Liability Protection: Consider obtaining an umbrella insurance policy that provides additional liability coverage beyond what your property insurance offers. This coverage can protect you from significant financial losses in the event of a major liability claim or lawsuit. Higher Coverage Limits: Umbrella insurance typically offers higher coverage limits, which can be particularly valuable for property owners who face increased exposure to potential liability risks. Consult with an Insurance Professional: Work with an experienced insurance agent or broker to understand the specific requirements and options for umbrella insurance. They can help you determine appropriate coverage limits and ensure your policies align with your risk tolerance. Managing Risk Exposures for Landlords: Thorough Tenant Screening: Conduct comprehensive background and credit checks on prospective tenants to mitigate the risk of problematic tenants. This includes verifying rental history, and employment, and conducting thorough reference checks. Clear Lease Agreements: Develop detailed lease agreements that clearly outline tenant responsibilities, rental terms, and potential consequences for lease violations. This helps manage expectations and reduces the risk of disputes or legal issues. Regular Property Maintenance: Implement a proactive maintenance plan to address potential safety hazards and mitigate the risk of accidents or injuries on your rental property. Promptly address maintenance issues reported by tenants to maintain a safe living environment.   Mastering risk management in rental properties is crucial for protecting your investment and minimizing potential financial losses. Consider the value of placing your rental property in an LLC for asset protection, ensure adequate property insurance coverage, and explore the benefits of umbrella insurance for added liability protection. Implement best practices such as thorough tenant screening, clear lease agreements, and regular property maintenance to manage risk exposures effectively. By adopting these risk management strategies, you can enhance the profitability and long-term success of your rental property ventures. Remember to consult with legal and insurance professionals to tailor your approach to your specific circumstances and jurisdiction.  

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Where to start?

Take a step. Big changes especially long term changes to things like health and finance take time. Don’t make sweeping changes to start, take one step, in the right direction and build off that.  Don’t build a budget immediately because that will most likely lead to a negative experience and most people’s experience with money is already negative. So instead start to save and have those savings go into an investment account that does everything for you to start. If you find that you want to dedicate some more time to it then do it, but first just make it really easy on yourself. What you’ll find over time your account is growing a lot more than your bank account.  Quick tip: Don’t begin reading investment articles or start watching the news to hear market updates, and don’t log into the account frequently because you’ll most likely let emotion get in the way of your new plan. So, find out how much you can save with your income (read our Common Questions section for best practices). Then take that dollar amount and divide it by 12 to figure out how much you need to save monthly. If you get paid bi-weekly divide your annual savings amount by 24 and automate your savings. Log into your payroll provider with your employer and automate that amount to go directly to an investment account.  For more information and resources check out our Education Library!

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