We’ve all heard that money can’t buy happiness, but happiness can buy money, and cried a little every time we heard it. But it turns out there could be some truth to this: being happy - or more specifically, being optimistic - might actually help you save more money, according to research from the American Psychological Association.
The research team, led by Dr. Joe Gladstone from the University of Colorado Boulder, conducted an extensive study across multiple countries. They analysed data from over 140,000 participants in the U.S., U.K., and 14 European countries. And they found that people who maintained an optimistic outlook about their future consistently managed to save more money.
How much more? For households with average savings of $8,000, those with higher optimism saved an additional $1,352 on average. That’s a significant difference, especially considering that this held true even after accounting for factors like age, income, relationship status, and personality traits.
And crazily enough, it turns out optimism is an even stronger factor in saving behaviour than financial literacy or risk tolerance. All those complex financial concepts we struggle to understand might be less important than simply maintaining hope for the future.
This effect was particularly strong among people with lower incomes. As Dr. Gladstone explains, this makes sense. When you’re living pay cheque to pay cheque, saving money can feel pointless. But having an optimistic outlook can provide that extra push needed to set aside even small amounts of money, despite current challenges.
I now know whom to blame for my poor financial situation. I need to go shout at my financial advisor for not sending me Sandeep Maheshwari videos and helping me build an optimistic mindset.