Gratitude is good for your soul … and your finances

I'll admit it. When I lost work last year, a tiny sense of entitlement crept up on me.

Okay, maybe it was more than tiny. On the outside, I told people: “I just feel like I deserve a good job, you know?” On the inside, I thought: Why the $%^@ don't I have a good job? I'm awesome.

My awesomeness, however, is irrelevant. Sometimes these things just happen. They happen to a lot of people, and, despite kind words of encouragement, they don't necessarily happen for any good reason. It's funny — when bad things happen to me, I always tell myself that it's only because something better can happen. It's like I think I'm immune to obstacles or something. Oh, this can't possibly be bad. Bad things don't happen to me, I'm Kristin! It's probably just something amazing in disguise.

Convincing myself that “this happened for a reason” started to get depressing after three months, when absolutely nothing progressed. I felt fueled by entitlement, and it dragged me down. So I stopped. Instead, I kept working hard without expecting anything at all.

Sounds sad, right? It was actually the opposite. Hoping for everything and expecting nothing gave me a deep sense of gratitude. Life doesn't entitle me to any perks, which is why I should be thankful that I have some pretty great ones. I have an awesome place to live. I have a loving and supportive partner and family. Even when I lost that job, I still had other work. (And now, I'm even more grateful to have an abundance of it.)

Life, I realized, is good. Beyond that, I also think that gratitude is a good financial habit. I'll explain.

Impatience is costly

Researchers from Northwestern University, Harvard and the University of California wanted to conduct a study on instant gratification. In an abstract, these researchers wrote:

“The human mind tends to excessively discount the value of delayed rewards relative to immediate ones, with ‘hot' affective processes believed to drive desires for short-term gratification.”

In short, people dig instant gratification. This usually backfires. Impatient investors, for example, can make unwise market decisions — selling a poorly performing fund before they give it a chance to grow in the long term. CBS News reported on the study too. As they put it:

“Whether it's chasing the performance of last year's hot funds, overspending on credit cards, or simply going for the immediate gratification that comes from spending today what you should have saved for tomorrow, literally hundreds of academic research papers say the same thing. The impatient individual costs himself a fortune.”

So we can all pretty much agree that impatience isn't a desirable quality, especially when it comes to finance, right? Well, researchers wanted to go beyond verifying that. They wondered, what separates patient investors from impatient ones?

“Gratitude: A Tool for Reducing Economic Impatience”

The answer, they found, is gratitude. Gratitude is key to making better money decisions. For the experiment, they asked participants to write down a personal experience that was either 1) happy, 2) emotionally neutral, or 3) generated feelings of gratitude.

After writing this down, subjects were asked to make a financial decision — receive $11-$80 right now or wait for a larger amount in the future. Researchers found that the happy and emotionally neutral subjects picked now; gratitude chose later. They concluded that “the emotion gratitude reduces impatience even with real money at stake.”

I know, these anthropological studies aren't the be-all and end-all. But it makes sense: You're satisfied with what you have now, so you're not in a rush to have more. Your patience makes you prudent.

Implementation trumps optimism

For another article, I interviewed Leona Tam, Associate Professor of Marketing at the University of Wollongong. She and a colleague authored a study titled “Saving in Cycles: How to Get People to Save More Money.”

Here's the gist of it. They instructed people to save money for a set period of time, to report their savings at a later date. But before researchers sent the subjects on their way, they split them into three groups and gave them instructions:

• Group 1: “Focus on the total amount of your savings goal for the future.”
• Group 2: “Focus on saving the amount that you want to save now, not next month, not next year“
• Group 3: Just do your thing (no instructions given)

Researchers called Group 1 “linear savers.” Group 2 were “cyclical savers.” In the context of the study, “cyclical” meant, things are the way they are — there's no promise they'll get better or worse. Surprisingly, despite not focusing on a goal, the cyclical people saved an average of 78 percent more than the linear savers.

That's a big number. Overall, researchers suggested that a cyclical mindset made people think more tangibly and practically. In contrast, goals are abstract. They favor optimism over implementation.

I can think of one personal example that supports this: my not taking retirement seriously. When I was in my 20s, I was lucky to have an employer match. I didn't take full advantage of it. I thought, “Oh, I'll probably be rich when I'm older; I'll focus on my retirement then.”

Goals are great. I love them. But it seems like focusing on what you already have yields better results.

This goes hand in hand with gratitude, focusing on what I have now instead of what I hope to have in the future. I'm not saying I shouldn't have hopes for the future. It's just about focus.

Be grateful, and strive for more

Please don't get me wrong. I'm not saying we shouldn't have goals. We should have goals! We should work for bigger and better things. I plan to work my butt off and hope for the best. And no matter how thankful I am for a job, I'll still ask for a raise. Don't let your gratitude hold you back either. What I'm saying is, I think it's possible to have your eye on the prize while still being overwhelmed with gratitude for what you already have.

I want to make this clear: I'm not suggesting you don't strive for great things. That is clear, right? Sorry to beat this point into the ground. But sometimes, my arguments get polarized, and it's frustrating as hell. Like, I'll say, “I love cats,” and people respond with, “Why do you hate dogs, though?” They're not mutually exclusive. You feel me?

In short, I think gratitude can keep you on the right financial track. When you're focused on and satisfied with the present, you can make more level-headed, practical decisions. And those decisions are usually better for the future!

Still, it's difficult to lose something you care about, even if it's just work. So it's understandable that I wanted more. Maybe I was in denial a little. But ultimately, the lesson learned is not the lesson I expected to learn. I kind of thought that, when the dust settled, I'd report that it all happened for a grand reason to make way for something greater.

Instead, I've learned that sometimes, shit happens. But good things happen too, and I'm lucky that I've experienced more good than bad in my life. That fact alone should help me overcome any future feelings of entitlement.