I’m Thankful For…
November 24, 2014As a parent, I am constantly trying to instill an “attitude of gratitude” in our children and the best approach is to model this attitude as much as possible along life’s journey. I always try to devote time for regular prayer and meditation but I am also adding a simple but formal gratitude journal to the weekly routine. As a financial planner, I know that I could do much more to encourage others to do the same.
Before you dismiss this concept as feel-good “happiology,” consider the possibility that gratitude can also help us display more positive financial behaviors and reduce problem behaviors such as overspending. A research study that explored the role of gratitude was led by David DeSteno at Northeastern University and was published in the journal Psychological Science. In this study, the researchers compared a desire for immediate cash against a willingness to wait for a larger reward at different times in the future. In behavioral finance circles, these inter-temporal choices are commonly referred to as “discounting” (e.g., smaller rewards or gains now are compared to larger ones in the future).
Participants were randomly assigned to recall and briefly write about an event from their past that made them feel either (a)grateful, (b)happy, or (c)neutral. Next, they were presented with a series of 27 different scenarios such as receiving $54 now or $80 in 3 months. As expected, the individuals who wrote about feelings of gratitude displayed greater patience than those who wrote about neutral or happy times. The average participant in the gratitude group required an immediate $63 to forego receiving $85 in three months compared to the neutral or happy groups, who required $55 for that same future amount.
The previous example helps illustrate the important role gratitude can play in our own financial lives. When we think about some of the saving and spending decisions we make on a routine basis, the concept of willpower is often discussed but displaying patience is difficult. Perhaps gratitude is a better alternative to willpower since it has been shown to be a potential source of patience.
It may be hard to show patience related to your financial planning efforts during this holiday season. Hopefully a little exercise in gratitude can help provide extra patience to make the wisest financial decisions possible. So this Thanksgiving season, consider hitting the pause button and re-focusing your personal financial life plan on the things that are going great and the many blessings your family has been presented. Here are some steps you can take:
Create a gratitude journal. Consider establishing a gratitude journal and commit to one or two entries per week over the next six weeks. You can even use a smartphone or calendar to set alerts or reminders on a certain day to spend at least 5 minutes one or two times per week purposefully completing this statement: “I am grateful for…”
Don’t just create a long list of responses. Focus on the details. Providing responses that tackle the things you are grateful for with depth is usually more effective than just making extensive lists.
Avoid overkill. Too much time spent on journaling efforts surrounding gratitude may actually have a negative impact. This is because constantly focusing on positive activities may actually make us adapt to these positive events. If you spend too much time focusing on the things you are grateful for, you may even become a little ungrateful of the fact this activity was suggested in the first place.
Think about what life would be like without certain blessings. This goes beyond the image of a child sitting in front of a plate of veggies with mom reminding him or her about all of the kids in this world without access healthy or reliable meals. Try a little addition by subtraction while imagining what life would be like without the blessings you do have. I know that when I get into my goal-driven state of mind, it is a natural tendency for me to focus on the things that I am working towards rather than where I currently stand.
If too many “life happens” moments occur and you get stuck, go back to the basics. Avoid breaking the habit and try to just be grateful for being here and life itself.
May your Thanksgiving week be an enjoyable one and if you are traveling, be safe out there. Will you be committing to a gratitude journal or have you already completed a similar exercise? Feel free to share your experiences in the comments section below.