For investors, volatile markets often highlight an unfortunate quirk of the human brain: We fixate on the negative. Our tendency to give more attention to what’s gone wrong than what’s going right is what behavioral economists call negativity bias.<\/p>\n
The good news? Negativity bias can be overcome. And appropriately enough as we head into Thanksgiving, it starts with thinking about what we’re thankful for.<\/p>\n
Gratitude can have a significant impact on our lives, from physical and mental health to improved decision-making. In fact, we know that people frequently behave irrationally when stimulated by an extreme emotion. For example, we may not know that we’re becoming stressed as it can come on gradually and undetected. But when we are under stress, we tend to make poor decisions because the brain is hardwired to \u201creflex before it reflects”\u2014emotionally react before thinking. Alternatively, those who practice gratitude not only experience greater life happiness and satisfaction, but also are more patient with their financial decision-making.<\/p>\n
Gratitude, as professor and leading gratitude researcher Robert Emmons defines it, has two parts. First, it’s an affirmation that there are good things in the world. Second, \u201cwe recognize that the sources of this goodness are outside of ourselves. \u2026 We acknowledge that other people\u2014or even higher powers, if you’re of a spiritual mindset\u2014gave us many gifts, big and small, to help us achieve the goodness in our lives.”<\/a><\/a>1\u00a0<\/sup>Reminding yourself of the things you’re grateful for can go a long way. One study showed that people who keep a list of what they’re grateful for see a reduction in depressive symptoms.2<\/sup><\/p>\n The benefits of gratitude don’t stop there. Here are a few more reasons to apply it in your financial planning practice. To start, gratitude can support your clients’ commitment to pursuing their financial goals. In a study published in\u00a0Psychological Science<\/i>, researchers found that grateful people showed more patience and self-control in reaching their objectives.3<\/sup>\u00a0A 2020 study took this a step further and found that gratitude also promotes risk aversion.4<\/sup>\u00a0Saving for retirement and other milestones definitely takes willpower, but it turns out that feelings of thankfulness can help us persevere.<\/p>\n In difficult times, gratitude is even more valuable for its stress-fighting effects. According to eMoney’s 2022 Consumer Pulse research, individuals and families are feeling the pressures of inflation, citing fears of rising prices and financial insecurity ranging from budget constraints on buying groceries to funding retirement savings.5<\/sup>\u00a0As economic uncertainty rises, so too can feelings of stress and anxiety.6<\/sup>\u00a0A 2022 survey of Americans shows 42 percent say money concerns have had a negative impact on their mental health.7<\/sup><\/p>\n It’s during these times in particular that being intentional about noticing the good in life can help us put, and keep, what we value in perspective.<\/p>\n So, how can you leverage gratitude in your financial planning practice? We’ve gathered three practical ideas for applying gratitude to grow your business, deepen relationships and help guard against stress and burnout.<\/p>\n Integrating gratitude into your practice’s culture can take many forms. There are tried-and-true solutions, like client appreciation events, but smaller acts of gratitude also have a big impact. Including a line in your client newsletter that expresses heartfelt appreciation for your clients is simple to implement. A handwritten note to thank a client for a referral can solidify that connection. And sharing the local restaurants you’re grateful for so others might discover them can spread the thankfulness around.<\/p>\n Even\u00a0your website and social media channels<\/a>\u00a0can reflect what you’re grateful for, whether it’s the team that supports you or your favorite travel destinations. Regularly identifying and sharing what you’re grateful for helps rewire your brain to notice more of the good things in life and may help remind others to do the same.8<\/sup><\/p>\n Younger generations of clients are looking to be more intentional with their money when they seek out an advisor. In fact, a recent MIT AgeLab study showed that 40 percent of those age 30 to 45 described their ideal advisor as a life coach.9<\/sup><\/p>\n What would that look like, exactly? For some advisors, it means that a client’s values are an integral part of\u00a0the discovery and onboarding process<\/a>. Finding out what a client is thankful for\u2014a loving family they don’t want to be a burden to in their twilight years, or a charity making an impact in their community\u2014is the foundation. From there, you create what some call a financial mission statement or a family motto.<\/p>\n Once you have those motivators spelled out, you can help refocus clients when they want to panic-sell investments or they change their minds about saving their bonus. You can remind them of the mission they communicated to you and their touchstones of gratitude, then discuss whether the decision connects to those or not.<\/p>\n During the Great Recession, advisor Lauren Pearson, CFP\u00ae, would lie down under her desk to relieve stress in between client calls. She recently shared on TikTok (@wealthedit) how many advisors feel extreme pressure when markets get choppy.<\/p>\n A gratitude exercise can help bolster resiliency in turbulent times. It could be as simple as a daily phone reminder to identify three things you feel grateful for. You could also try starting a gratitude journal or joining a \u201cgratitude challenge,” like\u00a0this one<\/a>\u00a0at TED.<\/p>\n \u201cGratefulness allows us to be moved toward possibility,” Kristi Nelson, author of\u00a0Wake Up Grateful,\u00a0<\/i>writes. Taking a moment to scan for what inspires feelings of gratitude can open our minds to those possibilities, whether they’re for your clients’ financial planning, your practice, or your life.<\/p>\n To continue learning about how to apply financial psychology in your practice, read our guide to\u00a0Tapping into the Emotional Side of Financial Planning<\/a>\u00a0or check out our Financial Psychology knowledge hub<\/a>.<\/p>\n Sources:<\/p>\n 1. Emmons, Robert. \u201cWhy Gratitude Is Good.”\u00a0Greater Good Magazine<\/i>, November 10, 2010.<\/p>\n 2. Kumar, S. A., Edwards, M. E., Grandgenett, H. M., Scherer, L. L., DiLillo, D., & Jaffe, A. E. (2022). Does Gratitude Promote Resilience During a Pandemic? An Examination of Mental Health and Positivity at the Onset of COVID-19.\u00a0Journal of Happiness Studies<\/i>, 23(7), 3463\u20133483.<\/p>\n 3. DeSteno, D., Y. Li, L. Dickens, and J. S. Lerner. 2014. \u201cGratitude: A Tool for Reducing Economic Impatience.”\u00a0Psychological Science<\/i>.<\/p>\n 4. Zhang, Y., Chen, Z. J., & Ni, S. 2020. The security of being grateful: Gratitude promotes risk aversion in decision-making.\u00a0The Journal of Positive Psychology<\/i>, 15(3), 285\u2013291.<\/p>\n 5. eMoney Consumer Pulse Survey, August 2022, n=1,201.<\/p>\n 6. Godinic, D., Obrenovic, B. & Khudaykulov, A. 2020. Effects of Economic Uncertainty on Mental Health in the COVID-19 Pandemic Context: Social Identity Disturbance, Job Uncertainty and Psychological Well-Being Model.\u00a0International Journal of Innovation and Economic Development,\u00a0<\/i>6(1), 61-74.<\/p>\n 7. Sandberg, Erica. \u201c42% of U.S. Adults Say That Money Negatively Impacts Their Mental Health.”\u00a0Bankrate.com<\/i>, May 2, 2022.<\/p>\n 8. Brown, Joshua, and Joel Wong. \u201cHow Gratitude Changes You and Your Brain.”\u00a0Greater Good Magazine<\/i>, June, 2017.<\/p>\n 9. \u201cFuture of Client-Advisor Relationships.” AIG and MIT AgeLab, 2020.<\/p>\n DISCLAIMER: The eMoney Advisor Blog is meant as an educational and informative resource for financial professionals and individuals alike. It is not meant to be, and should not be taken as financial, legal, tax or other professional advice. Those seeking professional advice may do so by consulting with a professional advisor. eMoney Advisor will not be liable for any actions you may take based on the content of this blog.<\/p>\n","protected":false},"author":100,"featured_media":8180,"template":"","thought_leadership_cat":[97],"class_list":["post-8157","thought_leadership","type-thought_leadership","status-publish","has-post-thumbnail","hentry","thought_leadership_cat-financial-psychology"],"acf":{"left_sidebar_ads":false,"right_sidebar_ads":false},"yoast_head":"\nGratitude Helps Us Patiently Pursue Goals<\/h2>\n
A Potential Antidote to Money Stress<\/h2>\n
#1 Add a Dash of Gratefulness to Your Brand<\/h2>\n
#2 Make Money More Meaningful<\/h2>\n
#3 Use Gratitude to Lift Your Spirits<\/h2>\n
Open to the Possibilities of Life<\/h2>\n