A new study from the Texas Tech University Department of Personal Financial Planning shows that positive thinking can really pay off.
If you're feeling less than satisfied with your financial situation right now, try counting your blessings.
Yes, really. A new study from Texas Tech University's Department of Personal Financial Planning shows that applying a positive psychology exercise can increase your happiness and financial satisfaction.
After pointing out the theoretical connection between positive psychology and personal financial planning back in 2015, Sarah D. Asebedo, a certified financial planner (CFP) and assistant professor in personal financial planning, has now tested that theory using the Three Good Things exercise.
"The Three Good Things exercise is a popular evidence-based exercise from positive psychology that aims to promote gratitude for the good things happening in life, which has been shown to result in short- and long-term increases in happiness," Asebedo said. "To complete this exercise, you write down three good things from your day, every day for at least seven days. In addition, you write down what caused each event and how you felt at the time and later when recalling them. We tend to weigh negative events more heavily than good events, therefore, it takes effort to refocus your attention to the good things that are happening and recognize your personal contribution to them."
Participants were evenly divided into four groups: (1) Three Good Things, where participants listed three positive events; (2) Three Good Financial Things, where participants listed three positive financial events; (3) Three Financial Things, where participants listed three financial events without positive framing; and (4) a control group. Responses were gathered daily for one week as well as after the end of the week and after 30 days to determine any lasting effects of the interventions.
Asebedo and her co-authors hypothesized the basic Three Good Things exercise would most affect happiness and the Three Good Financial Things would most affect financial satisfaction. But what they found was somewhat surprising.
"Our evidence suggests that the Three Good Things intervention elevated not only happiness, but also financial satisfaction," Asebedo said. "We tested a few different variations of this exercise, given the application to the financial domain, but found the traditional exercise to be the most effective overall for elevating general happiness and financial satisfaction levels.
"These findings suggest that people who are interested in improving their life experience generally and for their finances would benefit from completing this exercise, and financial professionals can encourage clients to do so. This exercise is useful in both good times and bad, but may be particularly useful in today's environment when times are tough and uncertain, and when negative news and events are everpresent."
Study co-author Todd D. Little, a professor of educational psychology and leadership in the College of Education, played a central role in the study's data analysis.
"Sarah is an extremely thoughtful researcher, and the area she's focused on is something that's rather underdeveloped in literature and is an important need," Little said. "It was a well-conceived study and the findings are going to be vital for the literature. It has significant implications for policy and practice."
While the findings support the application of positive psychological concepts and interventions to the financial domain, Asebedo notes more research is needed to fully investigate these effects.
In addition to Asebedo and Little, other authors on the paper are Blake Gray, a graduate research assistant in personal financial planning; Martin C. Seay, Kansas State University; and Shane Enete, Biola University.