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.

More about...Psychology

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Stefanie @ The Broke and Beautiful Life
Stefanie @ The Broke and Beautiful Life
6 years ago

I don’t know if that inner “I’m awesome” is entitlement so much as knowing your worth. Unfortunately, being awesome is just part of a huge equation, most of which we have little control over.

The strategy of striving for more while being grateful for what you already have is one I try to implement every day (some days are admittedly better than others).

Kristin Wong
Kristin Wong
6 years ago

Ha, ha. I hear ya!

Yeah, it’s a fuzzy line between knowing your value and feeling like the world owes you something because of it. Sometimes worrying about entitlement can actually hold me back. I’m terrible about asking for pay increases, for example.

Don @ Breath of Optimism
Don @ Breath of Optimism
6 years ago

This is a really interesting post. I am all about optimism and staying positive no matter what life throws at you. The studies that you cite show that you need a healthy balance of living in the moment and having goals. Without a goal of retirement, you won’t even bother saving right now. So many people are overwhelmed when it comes to saving for retirement because they keep hearing they will need $1 million or more to retire. For most people that make an average salary, that number seems unattainable. This is when you have to focus on the present… Read more »

Kristin Wong
Kristin Wong
6 years ago

Another tip I’ve come across for doing this: break up your goals. So if you have one large, looming savings goal, break it up into monthly milestones. This makes the goal more present. And manageable!

Sean
Sean
6 years ago

Absolutely wonderful post. My favorite line: “I think it’s possible to have your eye on the prize while still being overwhelmed with gratitude for what you already have.” The enemy of happiness is the “D” word — DESERVE . I hate that word and all the times it is used. One does not simply “Deserve” things. You get what you work for and earn. Good or bad there aren’t things that any of us deserve. All of the people I know that are the happiest subscribe to your thinking in this article. We strive for the future and a long… Read more »

Kristin Wong
Kristin Wong
6 years ago
Reply to  Sean

Thanks, Sean!

Yeah, it’s weird how “I deserve” can creep up. It helps to understand that entitlement can actually rob you from the things you already have.

Thanks for the comment!

Aldo @ MDN
Aldo @ MDN
6 years ago

This is great stuff. I came from a third world country – Dominican Republic – so I’ve always appreciated the little things that we’ve had. But after I came to the US my view on things got corrupted a little with the consumer mentality that gets drilled into you from all different sources. I started wanting more and more and felt that I deserved those things. That mentality changed quickly when I got myself into debt. I would like to say that I went through a consumer phase because now I’m back to what my mama taught me – appreciate… Read more »

Carla
Carla
6 years ago

I think I’ve always had the opposite issue: not feeling like I deserve anything great. If I got laid off from a job, I felt I was the token employee they had to eventually expel so I shouldn’t be be surprised and should be happy I had the opportunity in the first place. It has held me back from pursuing my goals and reaching for my dreams. Similar outcome.

Ironically, having a gratitude journal does help. Cutting goals up into bite size pieces helps me focus on the small chunks instead of the entire meal which could be overwhelming.

Financial Samurai
Financial Samurai
6 years ago

I love the message Kristin! Being happy what we have is truly the key to happiness. I’ve been wondering for a while now when the good times would end, and it did end for a while after my pet died, and then I lost a bunch of money in stocks with the tech correction. But I’m over it, and am looking forward to what lies ahead.

The journey is always the most exciting part.

Good luck to you!

Dave Lalonde
Dave Lalonde
6 years ago

This is great post! Lots of useful information. I noticed that when the crowd was divided into three groups, Group 3 was not given any set of instructions. Why was that?

Kristin Wong
Kristin Wong
6 years ago
Reply to  Dave Lalonde

Thanks, Dave!

Control group, I think?

melanie
melanie
6 years ago

I’ve recently started keeping a gratitude journal. Each night I write down 3 things that happened that day that I am grateful for. It’s made me a much happier and more grateful person!

Bernie
Bernie
6 years ago

Thanks for writing an insightful post that couldn’t have come at a better time. Latelym I’ve been feeling financially pinched, and the old resentment about why can’t things be better has been starting to creep up. However I found the more these self entitled feelings build, the worse my finances get. Love the post and I plan to link to it soon.

El Nerdo
El Nerdo
6 years ago

A little late to get into the conversation but this is a great subject.

KRISTIN – please read as soon as you can the book “Embracing Uncertainty” by Susan Jeffers. It contains the meat of your argument in it, and then some. Really excellent stuff.

Okay! Good night.

Kristin Wong
Kristin Wong
6 years ago
Reply to  El Nerdo

Cool-I will put it on my list. Thanks for the rec, El Nerdo!

jim
jim
6 years ago

AMEN!!!!!

Well said!

Ross
Ross
6 years ago

I really like this post! I like how you use academic research, optimism, and personal experience to talk about how gratitude can have such a positive influence in your life. Thanks Kristin! Cheers!

Allyson
Allyson
6 years ago

Excellent post!! Interesting and I love your writing style!

Judy Ann
Judy Ann
6 years ago

When I learned that my contract would not be renewed after working nearly 25 years at a university, I was shocked first. But I quickly found myself in a place of gratitude when I spoke with administration about mine and my office’s predicament. I wasn’t going to let them see me as bitter and write me off, and I wasn’t bitter. It was sad but I had a great job for a long time and felt lucky. Even now, almost 6 years later, I still tell people I got lucky. I had the time to make sure I could walk… Read more »

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