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With Thanksgiving just around the corner, it’s the perfect time of year to reflect on everything good in your life — especially if doing that reflecting uses a muscle you haven’t flexed in a while. Positive psychologists (those who specialize in improving overall well-being) have been saying for decades that feeling and expressing gratitude has a huge impact on your happiness. But did you know it can also affect your finances?

Take a few minutes at the end of each day to write down three things you’re grateful for.  At the end of each week, re-read your entries.  Experiencing a pattern of gratitude is a helpful habit builder.

Benefits of Gratitude

The benefits of gratitude aren’t just limited to increased contentment with your current financial situation, although that is a big part of it. Experts say feeling grateful might affect the kinds of decisions you make today and going forward — which can help set you up for a better future.

Gratitude Improves Our Relationships With Others

But what is gratitude, exactly?  Sure, you know it when you experience it.  It’s that warm and fuzzy feeling that you get when someone gives you a gift or helps you out.  But, it’s also more than that.  "Gratitude is an emotion that evolved to cement the need for reciprocity, to get along with other people,” says Thomas Gilovich, Irene Blecker Rosenfeld Professor of Psychology at Cornell University. "If I do something good for you, it works best if you then do something good for me.”

It’s more than just quid pro quo.  According to social psychology, it plays an important role in our relationships. The feeling of gratefulness affects the way we think and feel about our friends and family over time, and it helps us build deeper connections with them.  "Gratitude cues us into the fact that we have people around us who care about us, and then it motivates us to maintain our relationships with those people,” explains Jo-Ann Tsang, Associate Professor of Psychology at Baylor University.

Gratitude Helps Us Save More and Spend Less 

In addition to improving your interactions with others, gratitude can help you on an individual basis — specifically with your finances.  As Gilovich explains, gratitude helps you focus more on the long term rather than the short term.  That can help stave off impulse and other unnecessary purchases in the now.

Too often, people don’t save enough for retirement or overspend on things they don’t need because they let their emotions cloud their judgment. But feeling content with what you already have shifts your focus away from what you don’t.  That’s a plus.  "People who are more grateful tend to be less materialistic,” says Tsang. "If you’re more materialistic, that might negatively affect your financial well-being because you’re constantly wanting more things.”

Another bonus? Buying less stuff may mean you have more room for experiences, which in addition to generally making you happier, also limits how much you compare yourself to others. "Experiential things are less comparative,” Gilovich explains, citing his own researchOpens in New Window on consumption behaviors. "Keeping up with the Joneses is so much a material rat race, less of an experiential rat race.”

Put simply, you’re not thinking about whether your friends could afford to go to Bora Bora when you’re at the beach in New Jersey with your family — it’s much easier to just sit and enjoy the ocean.

How Do You Practice Gratitude?

Gratitude Even if feeling grateful doesn’t come naturally, there are ways to get better at it. According to Tsang, even something as simple as keeping a gratitude journal for a few minutes every day can drastically improve your happiness.  "You might not feel gratitude because there can be personality differences in how easily we feel happy about the good things in our life,” she says. "But you can decide to be on the lookout for those things, even just making a list every day or every week.”

Like any other skill, the more you practice being grateful, the better you get at it (and the happier you feel!). And while journaling is part of this skill-building, the way you spend your money can be just as important.  "It’s easy to imagine [gratitude] being something of a virtuous cycle,” says Gilovich. "That is, I spend my money on experiences rather than possessions — that makes me more grateful. And it leads me to pursue experiential consumption more in turn.”

Being Grateful Makes You a Better Person

All these benefits boil down to one simple thing: gratitude makes you happier. From how you treat others to how you feel about yourself, learning to be grateful for what you have is a win-win.  "Think about a world where you’re experiencing the opposite of gratitude: being entitled or being resentful,” Gilovich says. "You get consumed by it, and therefore you aren’t living up to your best self.” By shifting your mindset to focus on how you feel about your life instead of how much money you do or don’t have, you can learn to block out those negative emotions and live fuller lives.

 

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