Greed and fear are two states of mind sometimes associated with making money, investment decisions and wealth building strategies.
This Thanksgiving, try gratitude instead.
There is a link between gratitude and greater account balances, greater investment portfolios and greater satisfaction over spending decisions, according to financial advisers who have witnessed how money and emotions mix.
“By practicing gratitude, we can overcome the urge to spend on possessions that won’t increase our happiness and focus on areas like spending quality time with family and friends,” said James Vermillion of Vermillion Private Wealth in Lexington, Ky.
“Gratitude can also help us delay gratification and avoid the impulse for immediate reward in return for more worthwhile rewards later.”
To be sure, many people might find it challenging to feel financially grateful when so many aspects of Americans’ financial lives now feel stretched thin.
Consumer sentiment hit a decade low in November, according a closely-watched gauge on consumer mood released Wednesday. People have been buffeted by high inflation that nips and gnaws at their budget.
Incomes rose 0.5% in October but the cost of goods and services increased 0.6% in the same month, according to Wednesday data from the Commerce Department. That follows other government data showing the pace of inflation hitting a 31-year high in October.
And even as the economy recovers from COVID-19’s shockwaves, numbers indicate many people are still unemployed, struggling and even hungry.
Last month, 9.4% of people told Census Bureau researchers they sometimes didn’t have enough food. That’s up slightly from an 8.8% national average one month earlier — and for people on firmer footing, those numbers can serve as another reminder to be thankful.
Gratitude leading to abundance, not scarcity
Is a glass half empty, or half full? The answer may show person’s mental default to scarcity or abundance.
Scarcity, real or perceived, can lead a person to focus intensely — and anxiously — on the shortcomings, studies show. Other studies show mental health can play an important role in shopping habits; a household where someone suffers from depression has “striking differences” in its spending traits, researchers recently said.
“A focus on gratitude for what we have, combined with optimism and positivity about the future, takes us out of a mindset of scarcity and into one of abundance,” said Melissa Walsh of Clarity Financial Design in Winter Park, Fla.
If someone starts with gratitude for what they already have, that mindset “can lower impulse-based financial decisions, like expensive impulse purchases, because gratitude can take us out of the immediate moment and help us refocus on long-term, values-based decision making.”
It’s a point people should remember especially if they are planning on Black Friday shopping, Walsh added.
Knowing when enough is enough