What on earth does gratitude have to do with managing your money?

Is it really as simple as counting your blessings? Research seems to be saying that yes, a mindset of gratitude helps you handle your money better due to increased patience. Not only that, but gratitude also helps increase your happiness and decreases the likelihood you’ll succumb to temptation.

We know money is emotional. And many emotions can have the effect of making us spend more. It’s a bit like comfort eating when we’re upset; when we’re upset or angry the temptation is to spend more.

So, it’s really good news that a positive emotion like gratitude (and one that we can easily evoke in ourselves) has a positive impact on how we spend.

What did the researchers do to come to this conclusion? The study had a group of 75 participants. The purpose of the study was to test financial self-control, or in other words the ability to delay gratification.

The participants were placed in one of three emotional states: grateful, happy or neutral. They were then told they could have $54 now, or $80 in 30 days. If you do the calculation, that’s a 48 per cent return on their money. That’s very good, but money isn’t about maths … it’s about emotion.

Money behaviour

Those in the happy and neutral group showed a strong preference for having $54 now. Behavioural economics tells us this is quite a normal response. The temptation to have something immediately is very strong, and we don’t tend to think about the maths unless it’s a great deal more that we’ll receive later.

However, those in the gratitude group were much more likely to wait for the $80 a month later, and the greater gratitude they were feeling, the longer they were prepared to wait.

An important point to note here is that just feeling happy wasn’t enough to delay gratification; it was the specific feeling of gratitude. This result is interesting not just in terms of money behaviour, but it also has implications for obesity and smoking.

The next question has to be, how do we cultivate this emotion of gratitude, particularly when the temptation to spend our money is at its greatest?

Here are a few suggestions:

Try keeping a gratitude journal. Each day you jot down two or three things that you’re grateful for. It could be as simple as being grateful that your train was on time, or your baby smiled at you, or your teenager said actual words to you instead of grunting.

Reducing the desire

If keeping a journal isn’t your thing, then when the impulse strikes, take a 10-second break and think about two things you’re thankful for. Quite often, being grateful for what you already have is enough to reduce the desire for more.

Social comparison, FOMO and seeing what everyone is up to on social media isn’t a good use of your time when you are wanting to be more mindful of what you are spending. So, stop doing it! Focus on your own goals, your own now and your own future, not everyone else’s.

We often forget to track our progress; when you reach your goal, celebrate it. Then move on to the next one. This helps you stop, take a breath and feel a sense of achievement.

So now you have the warm fuzzies, and are diligently keeping your gratitude journal, and FOMO is a thing of the past, in a practical sense how does this feeling help you be better with your money?

You know the dreaded budget that you hate and can never stick to? Well, once you have reframed it to being a money plan, gratitude helps you stick to it.

Instant gratification

You know what enough is for you, so you are less likely to want to keep up with the Joneses or succumb to instant gratification, which keeps more money in your bank account and reduces financial anxiety.

You can set goals with more clarity about what is right for you and your family, so saving becomes easy and a bit more fun. You get an extra layer of gratitude as you see your savings grow, whatever it is you are saving for.

Forget making rash decisions; you will be more considered in making decisions as they won’t be just about the money. You are able to weigh the pros and cons and come at a decision from a more rational perspective than fear of “not enough”.

Feeling gratitude won’t only impact your money, it will help increase your overall feeling of wellbeing, which flows into your health and your relationships.

So why not give it a go, come up with one thing right now you can be grateful for. For me, I’m looking out my office window and the sun is shining. I’m very grateful for that.

If you need a bit of help to start your money gratitude journey, drop me a line, I’d love to help. lynda@moneymentalist.com