How Gratitude Can Lead To Better Finances

“Gratitude is not only the greatest of all virtues but the parent of all others.”            


You probably don’t need Cicero to tell you that we feel better expressing our thanks to those we love. Telling our families and friends how much we care feels good for both parties. Both givers and receivers of gratitude can serve up a host of advantages that can help us lead more prosperous lives.

Why not be grateful every day? Gratitude studies suggest these benefits:

  • Healthier mental and physical well-being;
  • Our happiness increases;
  • Reduces stress, anger, and other negative emotions;
  • Generates positive chemical reactions in our brains; and
  • It enhances coping mechanisms.

All of these advantages are free AND can lead to better social relationships at work, school, with family and friends. Expressing gratitude is a win-win for us. It can help better deal with our careers and our finances.

How Gratitude Can Lead To Better Finances


 Boosts Motivation And Strengthens Our Social Relationships

We spend much of our waking hours working with others in teams, as employees, managers, and clients. Thanking someone for a job well done motivates us. We are getting high ratings on reviews from those we serve, and that feels great.

Gratitude is like a moral barometer. Getting a few words of appreciation from your boss when working on a challenging assignment provides a boost and energy. According to a 2001 study, gratitude is on par with empathy, agreeableness, guilt, and shame. Beneficiaries of gratitude are motivated, behave more prosocial, and are valuable to your team.

When managing others, you want everyone to be equally devoted and contribute to the team’s good, especially for the client. As an employee, you want your peers to share their ideas and efforts. Collaboration is a major part of the future workplace. Both the leader and employees need to be in sync. As the saying goes, you can catch more flies with honey than you do with vinegar. These researchers found experiencing gratitude fosters social behavior for both beneficiaries and benefactors, improving our interpersonal lives.

Increases Patience, Decreases Instant Gratification

Those who are thankful may have more incredible willpower and can delay instant gratification. Delaying gratification is a substantial benefit when it comes to shopping and impulse buying. In a study led by Prof. David DeSteno, a psychologist at Northeastern University, randomly assigned participants went to one of three conditions of which they wrote about a past event that made them: 1) grateful, 2) happy, or 3) neutral.

 Participants had to pick between getting $63 now versus $85 in three months to measure impatience in this study. Those who wrote on experiences that made them feel happy or neutral favored the immediate payout of $63. On the other hand, those who were grateful opted for the higher amount of $85, delaying gratification. The damage is done to our wallets because we are impatient, wanting instant gratification. That can be expensive.

A high percentage of us shop impulsively. Overspending or spending beyond our means leads to higher borrowing, usually on credit cards, which command high-interest costs on unpaid balances.

In a poll:

  • 5 of 6 Americans admit to impulse buying, spending $100 or more.
  • 84% of poll respondents made impulse buys, and 77% did so in three months.
  • 79% made spontaneous purchases in the store, with only 6% buying on their mobile phones.


Alternative To Materialism And Envy

Gratitude is negatively associated with envy and materialism. Materialism is a persistent emphasis on lower-order needs of material comfort and physical safety. Those values are in contrast to higher orders like self-expression and quality of life. As gratitude involves wanting what one has rather than having what one wants, instilling a sense of gratitude may help people appreciate the moment’s gifts. That is, free yourself from past regrets and worry about future anxieties. It is a better place to be. With gratitude comes the realization that happiness is not contingent upon materialistic happenings in one’s life. Rather, it is because we are part of caring networks of giving and receiving.

Being grateful is a more frugal pick over being materialistic. We may want expensive homes, luxury cars, and exotic vacations. These things make us feel more prosperous in front of our friends and family as a measure of our success.

Hedonic Treadmill

When we buy a new car, we usually get a boost of energy and happiness that is short-lived. This temporary boost is called a hedonic treadmill or adaption theory. As such, there is a tendency for people to get a quick buzz after their purchase and then quickly return to a stable level of happiness. Buying major things are habitual for some. The enjoyable moment is fleeting (though the bills are not). Spending to be happy often leads to lifestyle inflation which can be costly. Better financial habits can be learned even from millionaires.

One of my favorite books, The Millionaire Next Door, explores the different financial paths of two different kinds of millionaires. In one group are the frugal millionaires. They allocate their time and money efficiently to build wealth. The more typical millionaires concern themselves with the display of their social status but are financially more vulnerable. The book is based on studies from the 1990s and remains relevant today.

Count Your Blessings And Be Happy

Reflect on your present blessings, on which every man has many, not on your past misfortunes, of which all men have some.”    Charles Dickens

We feel good when we are grateful and we function better with others. We live more prosperous lives, not solely based on money but as fulfilled beings. Grateful people have more resources–psychological, social, and spiritual–that can be drawn on in times of need.

A 2013 survey confirms earlier studies and broadens the demographics finding:

  • Americans are a grateful bunch.
  • Women are more grateful than men. (I knew that!)
  • Age is not much of a factor in gratitude as gender is.
  • While “your current job” received the lowest score from those surveyed, that is, people are not so grateful for their jobs, those earning over $150,000 are. Good to know!

Gratitude has a seemingly endless list of physical, psychological, and emotional benefits that help us live better every day. According to many studies, we have better immune systems, lower blood pressure, sleep better, have less stress, have greater self-worth, are more productive, experience joy and pleasure. Dr. Robert Emmons has pointed to a 25% increase in our happiness levels. Let’s be grateful for that!

Grateful Expressions Boost Our Brains 

Regularly expressing gratitude changes the molecular structure of our brains, A study led by Zahn using functional MRIs to measure the brain activity of participants imagining their own actions toward another person, experiencing different emotions either conformed (eg. gratitude or pride) or were counter to a social value (eg. anger or guilt). They found that gratitude can boost areas of the brain, releasing dopamine, a chemical that plays a positive role in many daily behaviors such as motivation, movement, and energy. I’ll take that dopamine now!

Promotes Generosity

Studies suggest that there is a neural connection between gratitude and altruism. Culturally, we admire people who give to others selflessly. Appreciation from others may lead us to offer more as part of our moral barometer to take great action. Hearing someone being grateful to us may encourage us to feel more generous. When we are beneficiaries of kind words, we feel more optimistic, less stressed, and feel good in general.

Giving to others doesn’t always mean charitable donations, although that is meaningful giving. It could also mean volunteering in a soup kitchen, reading a book to a child or an older person in a hospital or rehab center. Paying it forward to others in any way you can has its rewards.

Being Grateful Is Good For Our Career

We are more productive at work, enjoy better relationships with our coworkers, and are more confident in asking for raises. Gratitude cultivates better decision-making and improves engagement with others. More sleep and less stress allow thinking more clearly. We are motivated and energetic in our workplaces and better reach our potential.

Being Grateful Leads To Financial Goal Achievement

The same advantages we gain at work can help us deal with our personal lives’ financial situations. We can better handle money management issues head-on rather than delay payments. Procrastination is among the worst traits to have when dealing with money, especially when carrying burdensome debts. Instead, be proactive with your financial situation and make changes when necessary. Postponing bill payments adds late fees, higher interest costs, and negatively impacts your credit scores.

To better achieve our short-term and long-term financial goals, we need better habits.

Here is a list of ten “must do’s” to strengthen your financial position:

  1. Establish an emergency fund of at least six months of your living expenses in case of unforeseen events.
  2. Automate payments to avoid late fees.
  3. Pay your credit card balances in full, not just the minimum.
  4. Monitor your credit reports to find errors, and find ways to improve your FICO score. A higher score will help when you can have financial flexibility when needed.
  5. Save for retirement through tax-advantaged employer-sponsored benefits. Separately open up an IRA (preferably a Roth IRA) for more retirement savings.
  6. Set up a 529 savings plan as early as possible for your newborn. You will benefit from more years to invest; compound interest on interest will help you avoid borrowing later on for your children’s college tuition.
  7. Spend within your means to lessen or eliminate your borrowing needs.
  8. Don’t be impulsive when shopping. Retailers encourage us to spend, so counter those tendencies by buying what you need and value.
  9. Pay your income taxes on time and avoid unnecessary penalties. Why pay the government more than you owe?
  10. Earn more by being productive at work, making better decisions, and improving social relationships.

How To Practice Gratitude More

Be thankful for what you have; you’ll end up having more. If you concentrate on what you don’t have, you will never, ever have enough.” Oprah

  1. Simply smile at what you have in terms of family, friends, a job, or a career you enjoy.
  2. Send old-fashioned “thank you” notes to those whom you are grateful to or for having in your life.
  3. Keep up a gratitude journal to save those great moments.
  4. Practice saying and thinking about gratefulness in a meaningful way.  Exercising your ability to switch gears to counting your blessings rather than focusing on obligations often works for me. With two teenagers, it can be challenging to have some quiet moments for yourself. However, I find it can work for the good.
  5. Sometimes, losing a loved one makes you more grateful. It may run counter to the most challenging experiences. My mother lost her whole immediate family and extended family except for my Uncle before 20. Yet, she was always grateful for her life and that of her brother. It gave her the chance to have her own family.
  6. Having a traumatic experience often makes us grateful. I recently finished and enjoyed I Am I Am I Am, a memoir by Maggie O’Farrell. She had 17 brushes with death. Towards the end of the book, she is talking to a guy about her experiences. He said to her, “How unlucky for you,” to which she emphatically answered, “No, I was quite lucky,” and goes on to express her gratitude which ultimately made her stronger among other emotions.


Final Thoughts

Practicing gratitude is an inexpensive way to feel physically and mentally healthy. Try to have daily doses of gratitude which may help to reduce strains at work and home. It may produce better benefits than spending money impulsively, leading to big bills and higher borrowing costs. There are many reasons in your life to be grateful. Give yourself time to appreciate what you have as often as you can. Express your feelings to others. The perks are worth it.

Do you write in a gratitude journal? Have you been told you are appreciated or have you said it to others? You can make someone’s day better and remove some stress, add some motivation and energy to someone’s day, or helped them to resolve a lingering problem. 

Thank you for reading The Cents of Money. You are appreciated!







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