Why do some people look on the bright side, while others always see the glass as half empty?
“Whether or not you’re an optimist depends on a number of factors. Your temperament plays a major role,” explains Valérie S. Legendre, a psychologist and senior mental health consultant at Sun Life.
“Optimism also depends on your primary socialization environment – your family – and your upbringing,” she adds. “So let’s say you grew up in a family that was anxious or negative or always expected the worst. Then it’s probably harder for you to believe that things will eventually get better.”
But the good news is that optimism can be cultivated. Anyone can become more optimistic and believe in a better tomorrow. What’s more, developing optimism can affect all areas of your life:
- your good habits,
- your ability to see your plans through,
- your physical health,
- your mental health and
- even your financial health.
How optimism connects to financial health
A recent survey in the U.S. found that optimists were 7 times more likely to exhibit better financial health than pessimists. The survey didn’t define financial health in terms of wealth or income, but in terms of people’s relationship with money. For example:
- Do you have control over your finances? Are you able to make ends meet?
- Do you have financial goals? Are you on track to meet those goals?
- Do you have a financial emergency fund?
- Does your budget allow you to make choices that let you enjoy life (e.g. going out for dinner, travelling, etc.)?
What do optimists do when it comes to money?
According to the survey, optimists do the following things to improve their financial well-being and reduce money-related stress.
- Discuss your finances with family, friends or a qualified advisor. It’s time to take the taboo out of talking about money. 76% of respondents classified as optimistic said they feel comfortable discussing money with family and friends, compared to 53% of pessimists.
- How to agree with your spouse over money
- How to talk about money with your family
- How to have “The Talk” with your aging parents
Optimists were also more likely than pessimists to seek financial advice from experts. And of those who got help from investment advisors, 63% of optimistic respondents reported following their advice always or most of the time. This figure fell to 40% among pessimists.
- Find an advisor near you.
- 5 tips for finding an advisor you can trust
- Important questions to ask an advisor you’re just meeting
- Seek progress with small, realistic goals. Optimists see value in making progress toward a goal in small increments. That might, for example, mean saving a little bit – even just $10 a month – toward a future purchase.
- Learn from a financial setback and then bounce back. The optimists surveyed were not immune from financial challenges. Far from it. But they were more likely than pessimists to say that they learned from their setbacks.
Marie-Ève Poulin, Market Director, Recruiting at Sun Life, knows a thing or two about financial optimism. Part of her work involves making sure advisors have the tools to meet their Clients’ needs.
“Among our core values, we always stress that no one is immune from a financial setback,” says Poulin. “And more importantly, that a bad financial situation now does not necessarily mean a bad financial future. Anyone can adopt better behaviours and have a more optimistic attitude toward their finances.”
5 steps to being more of an optimist
Now that you understand how optimism can benefit your bottom line, maybe you’d like to try developing a more positive outlook on the future. What should you do? Legendre has the following game plan for you.
- Become aware of what’s holding you back. Do a little self-evaluation and reflection. What are the limiting thoughts that dominate my self-talk? For example: “I’ll never be able to get out of debt.” “Some things are impossible for me, but not for other people.”
- Choose to change and set goals. Yes, you have to make a deliberate choice to be more optimistic. It’s the same way you would decide to be more physically active or quit smoking. You do this by setting a specific goal for yourself. As an example, let’s say your goal is to pay off your debt. Look for the meaning behind this goal. Ask yourself: What’s it in this goal that’s important to me? The answer will help you to stay on track when obstacles or temptations arise. So when you feel the urge to make an impulse purchase, you could say to yourself: Will this expense help get me closer to my goal? When you have a clear objective, it’s easier to hold firm and not get blown off course.
- Make a plan. Your goal will look more attainable if you make it very specific and break it down into smaller steps. Why? Because each sub-goal you achieve will feel like a success. That success triggers a feeling of self-worth. And that, in turn, triggers a feeling of optimism. It’s a virtuous circle that encourages you to keep going and boosts your self-esteem.
- Celebrate and take credit for your successes – both small and big. Optimists feel that they’re responsible for their success. However, pessimists would say it was just good luck or a coincidence. The trick here is to have a ritual around recognition. It’s a good way to develop your optimism, and it’s great for your morale and your mental health.
It could be something as simple as taking a few moments at the end of each day to look back on your small wins. For example, you might say, “Today I succeeded in staying within my budget. I resisted that impulse purchase that would have derailed me.
Don’t underestimate the impact this sort of recognition can have on your motivation. You’ll also be able to revisit these little successes when you experience setbacks or feel discouraged.
- Frame your goals in a positive way. Be concrete and aim for something that you find pleasant or enjoyable. For example, you might want to put $5,000 in your tax-free savings account (TFSA) as a way of saving up for a family vacation. It’s a lot easier to stay on track when your goal gives you something nice to look forward to. You’ll find it much harder to be enthusiastic about a disciplinary sort of goal, such as going on a super tight budget.