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The Optimism Advantage: How an Optimistic Outlook Boosts Savings, Especially for Low-Income Earners
A Commentary By Victor Perton
Can optimism help people save money? A study, , published in the Journal of Personality and Social Psychology, suggests that it can—and the effect is most potent among lower-income individuals.
Contrary to the belief that optimism might lead people to neglect financial planning, researchers Joe Gladstone and Justin Pomerance found that individuals with a positive outlook on the future tend to save more money over time. Analysing data from 140,000 participants across the U.S., U.K., and Europe, the study revealed that optimism is a psychological resource that encourages future-oriented financial behaviour.
Lead author Joe Gladstone, PhD, of the University of Colorado Boulder, said, "We often think of optimism as rose-colored glasses that might lead people to save less for the future. But our research suggests optimism may actually be an important psychological resource that helps people save, especially when facing economic hardship."
The impact was particularly striking for lower-income individuals. "For someone living paycheck to paycheck, saving can feel futile. But an optimistic outlook may provide the motivation to set aside money despite present challenges," Joe Gladstone noted.
The research suggests that an optimistic mindset fosters resilience and goal-setting, encouraging individuals to prioritise long-term security over short-term difficulties.
The implications for financial education are profound. Traditional financial literacy programs often focus on numbers and strategy, but incorporating optimism-building techniques—such as envisioning a better future—could make saving feel more achievable. This aligns with broader findings from The Optimism Effect, highlighting how optimism fuels productivity, innovation, and economic progress. It also supports the growing concept of the optimism economy, where hopeful and forward-thinking attitudes drive financial and societal well-being.
"Ultimately, a mindset of hope for the future, paired with the skills to manage money wisely, may be key to helping more people build financial security," said Dr Gladstone.
This research reinforces The Optimism Principle—optimism is the key to solving life's most pressing challenges. Fostering a mindset of hope and smart financial habits could be a powerful combination for achieving financial stability.
If optimism can help nations thrive, why not our personal finances too?
My Six Favourite Practices for Cultivating Happiness and Optimism
In my work at The Centre for Optimism, I've found that optimism isn't just an abstract concept—it's something we can practice and strengthen daily. Here are six ways to build optimism and happiness in your own life, which, in turn, can improve your financial habits and overall well-being:
- Smile! Share a genuine smile with every person you meet and pass today. Smile at yourself in the mirror. A simple, genuine smile can change any room's atmosphere, lift your mood, and have a contagious effect on those around you. Read more.
- Joyful Greetings – Instead of the usual "How are you?" ask, "What's been the best thing in your day?" This slight shift can transform conversations into uplifting moments of connection. You could even use "What's brought you joy today?"
- My Best Self – Regularly visualising and working towards the best version of yourself helps align your thoughts and actions with optimism and happiness. This practice takes half an hour and includes writing a diary entry for a perfect day in your life five years hence. Try it here.
- My Optimism Superpower—Choose optimism as your superpower and write about how it is reflected in your life, work, relationships, and spirit. Options include natural optimism, resilient optimism, purposeful optimism, realistic optimism, cautious optimism, relentless optimism, infectious optimism, and more. Explore your optimism superpower.
- Surround Yourself with Optimistic People—Engaging with individuals and communities that reinforce a hopeful and solution-focused approach will help sustain your optimism. Optimism, like pessimism, is infectious, so make sure to maximise the time you spend with optimistic people. Generally, optimists attract other optimists. Choose your company wisely with people who fill your glass with optimism and joy. It can become a virtuous circle as you seek out optimistic companions and people seek your company.
- Practise Gratitude – Recognising progress, no matter how small, helps build a sense of accomplishment and motivation. There are two elements to gratitude practice: The first is to express your thanks to people frequently. You know how to do that face-to-face, by phone, email, or message "thanks". Do it often, and you will feel better. The second is to record your gratitude daily: Write down the three best things in your day at the end of the day; the trick to the effectiveness of that journaling is to reread what you recorded first thing in the morning.
Financial security, happiness, and optimism are deeply connected. By cultivating an optimistic outlook and engaging in these simple daily practices, you can strengthen your ability to save, invest in your future, and build resilience.
What steps can you take today to cultivate an optimistic financial mindset? What opportunities do you see for applying optimism in your daily decisions?
Additional Comments:
"The researchers offer up a pretty compelling case for the power of optimism in financial planning. By encouraging a positive outlook, individuals can strengthen their financial resilience while fortifying their long-term financial security. Consequently, the study’s authors call for a reevaluation of financial education strategies, with an eye toward the value of psychological interventions in promoting savings and financial well-being," wrote Denis Storey.
Science Daily: Optimism can boost saving, especially for lower-income individuals
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