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Money may not buy happiness, but a positive attitude can do more than bring a smile to your face – it can boost your financial health.
“When you are negative, your brain splits resources between your work and managing your negative emotions so you have less energy to focus on the task [at hand],” says Shawn Achor, co-founder and CEO of GoodThink Inc. and author of “Big Potential.” “When you are positive, the brain doesn’t feel under threat, so it releases more resources to help you be creative and productive. This means your energy lasts longer, you are three times more creative, productivity rises, sales increase, memory deepens and test scores improve,” he adds.
While most people believe happiness is the outcome of reaching success, it’s actually the opposite: Happiness is what makes you successful and leads to improved financial well-being. In fact, a 2015 study by the Social Market Foundation and the University of Warwick’s Centre for Competitive Advantage in the Global Economy found that happiness increases productivity on work-related tasks by 12 percent on average.
Benjamin Hardy, author of “Willpower Doesn’t Work: Discover the Hidden Keys to Success,” says your emotional state has everything to do with your success – and your finances – as it determines the quality of your thoughts and overall mindfulness.
Shifting your perspective and lifting your mood can get your finances in tiptop shape. Read on to learn why starting your day with a sunnier disposition can lead to financial success.
1. A positive disposition helps you make smarter financial decisions. A sunny outlook can provide balance and clarity for making sound financial choices. Chad Rixse, co-founder of Millennial Wealth, a financial-planning firm for young professionals based in Seattle, says that happiness helps people make smarter money decisions. “We’re not so quick to make emotionally driven decisions, but rather think about how [our] decisions might impact the overall level of happiness we are currently experiencing and choose a more objective approach as a result,” he says.
Jamie Gruman, a professor of organizational behavior at the University of Guelph and founding chair of the Canadian Positive Psychology Association, says happiness also directly influences investment choices.
“Happy people will be more innovative and think more broadly in terms of the financial options they consider, and they will consider a greater number of vehicles and be more open to investment options they might have otherwise overlooked,” Gruman says. “This can diversify their portfolio, reduce risk and improve their long-term financial performance.”
2. Happiness can help you increase your income. People with a brighter outlook on lifeare typically more satisfied with their jobs, perform better on assigned tasks and are more likely to help others. As a result, content employees tend to collaborate well in team environments and gain social support from their co-workers. Employees with a positive disposition are also less likely to miss work and typically cope more effectively with challenges, all of which promote career advancement.
“When we are happy, we are better able to focus, concentrate and have greater motivation to tackle challenging tasks,” says Kristina Hallett, clinical psychologist and executive coach based in Suffield, Connecticut. Not only does a positive attitude create a better work environment, it also increases productivity in both quality and quantity of work and can increase your chance for getting a raise or a promotion and a better evaluation from your supervisor, she adds.
3. A positive mindset can open doors to new business opportunities. Happy people have greater success in networking due to their willingness to engage with others and form relationships more quickly, which can lead to new business partnerships and increased sales.
“When you are happier, more people are attracted to working and collaborating with you,” says Rebecca Cafiero, lifestyle expert, speaker and trainer at RebeccaCafiero.com, where she helps people find success and turn their passions into a business. “People don’t buy what you sell, they buy you, and no one wants to buy a negative person or their services.”
Jennifer Winsor, a wellness expert with Waves and Willows, a lifestyle website and blog, says that a positive person is more likely to be asked to participate in a team or group project because they are a pleasure to be around. “In an employment setting, this could lead to exciting new career opportunities or training which could allow for career advancement and increased financial benefits,” she adds.
4. Optimism can motivate you to eliminate debt. Debt is often associated with feelings of depression, embarrassment and failure. However, these negative attitudes toward your finances and any debt you may be carrying will keep you from paying it off.
“A positive outlook on your finances means that you’re accepting radical responsibility for any debt you’ve taken on and are committed to paying it down, so you’ll look for opportunities to create more money to pay it off, find ways to reduce the debt or educate yourself to avoid this situation in the future or ask for help,” Cafiero says.
5. Happiness can help reduce wasteful spending. Feelings of inadequacy often trigger poor spending habits, which leads to wasteful impulse purchases. According to a 2018 study about impulse spending from the deal-sharing platform Slickdeals, consumers spend an average of $450 on needless purchases every month. Impulse spending fails to be an antidote to these emotions, however. A better mood may ultimately help keep you from blowing money on needless purchases.
When you’re feeling optimistic and happy you tend to have a greater sense of energy and purpose and fill your time doing things you enjoy instead of spending money on things that you think will bring you joy, Hallett says.
6. A positive outlook can help you discuss your finances with your spouse. Financial tensions can cause many couples to fight, leading to significant strains in both the relationship and family budget. Talking about sensitive topics, whether you’re addressing debt or your loved one’s spending problem, should come from a positive place. Approaching these conversations with the right attitude will help influence a willingness to change and improve each other’s bottom line.
“You will get more of the results you want if you approach your spouse with a smile and a positive attitude when discussing sensitive matters,” says Dr. Fran Walfish, family and relationship psychotherapist and author of “The Self-Aware Parent.”
“When you approach your spouse warmly and positively, he relaxes and can feel safe to open up to you. Approach him with a critical tone and he will clam up, become defensive, argue and the conversation flow will stop,” Walfish says.
7. Happiness can help boost your well-being and reduce health care costs. A positive mindset can help improve your immune system and keep you healthier.
“In general, stress is thought to increase disease risk through changes in health behaviors and through alterations to neurohormonal systems,” says Sheldon Cohen, a professor of psychology at Carnegie Mellon University in Pittsburgh, who has been at the forefront of stress research for 30 years. People who have a positive emotional style, on the other hand, are less likely to get sick, he says.
If living a healthier and longer life isn’t enough reason to boost your mood, just consider the money-saving benefits you’ll receive with a reduction in potential medical expenses.