We all logically know that money by itself will not make us happy. Yet so often we find ourselves falling into the trap of wanting the next best thing, or struggling to delay gratification (for ourselves or those we love)—denying something good now in order to have something great later. Aside from focusing on willpower and self-discipline, which seem so difficult to maintain, what else can we practice? In this season of thanksgiving, could practicing gratitude help us make better financial decisions?
Researchers from several top universities decided to put the gratitude theory and its impact on financial decisions to the test. They placed participants in a position to obtain a monetary reward now or a higher reward in 30 days. But before asking them to decide now or later, they were asked (at random) to recount an event from their life when they felt either happy, neutral or grateful. Those who reflected on situations for which they were thankful were more likely to delay instant gratification for a greater reward in the future. Interestingly, those who reflected on neutral or happy situations had the same degree of patience—a lesser degree than those who reflected with gratitude. Meaning, it wasn’t happiness that increased their self-control; it was gratitude.
For different reasons, we each might struggle with overspending this time of year. Perhaps it’s because the holidays are associated with pain or loss and we tempt ourselves to think about purchasing that thing we’ve been wanting will make us feel better. But we know it will only be temporary, and we’ll regret the purchase later. Or maybe we overspend because we love seeing the look on a loved one’s face when they open something unexpected, even though we know it would be in their best interest to purchase something a bit lower cost and put the difference in savings for their future. When it comes to children, we also know deep down that not gifting them every “latest and greatest” now might help them strive to achieve it for themselves later, providing them the gift of personal accomplishment.
So, when we feel this tension rise up, why not put the gratitude theory to the personal test this holiday season? Just as the participants in the study did, why don’t we take a moment to reflect on the many things in our lives for which we are grateful? And then, only after counting our blessings, make a decision. Whichever way it goes, a multitude of studies show that our overall well-being will be improved, and we’ll simultaneously increase our chances of making a good financial decision. So, what is there to lose? Let’s practice gratitude.
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