While it doesn't influence our opinions of products, we do receive compensation from partners whose offers appear here. We're on your side, always. See our full advertiser disclosure here.
We learn in biology class that stress hormones help us respond to dangerous situations, like tornadoes and kitchen fires. The problem is, many of us have allowed stress to become part of our everyday lives, impacting everything from our relationships to how we manage money. Stress covers us in a blanket of unhappiness and pessimism.
Fortunately, there is an antidote to stress: optimism. Optimism is the flip side of stress and unhappiness. It's the surest way to combat negative emotions. Plus, studies indicate that people with an optimistic mindset make smarter financial moves.
What optimism can do for you
First and foremost, optimism can make you happier. Being an optimist does not mean you ignore stressors or pretend the world is a perfect place. Being an optimist means recognizing problems but approaching them in a productive way.
You can't look at a person and immediately tell if they're an optimist or pessimist. But put them in a stressful situation and watch how they cope. A pessimist is likely to spin out of control, making what might have been a minor situation worse. Optimists tend to view problems as temporary setbacks. They may be uncomfortable in the moment, but they see hardships as an opportunity to learn and improve.
Optimism and finances
Psychological researcher Michelle Gielan partnered with Frost Bank to study whether optimism impacts financial behavior. They found that optimists are more likely to enjoy financial health and make beneficial money moves than pessimists.
For example, 70% of pessimists have put money aside toward a major purchase, compared to 90% of optimists. Nearly 66% of optimists are building an emergency fund, while less than 50% of pessimists are doing the same. The fact that optimists are more likely to build an emergency fund underscores the fact that optimists do not see the world through rose-colored glasses. They expect bad things to happen and want to prepare.
Having money put aside in a savings account toward a future purchase or to cushion you against the unexpected is a good way to reduce your financial stress.
The study factored in attributes that could skew the results like demographics, wealth, and skills. Even so, it showed optimists do better throughout their careers. Not only are they more likely to be promoted than pessimists, but they also tend to earn more money.
How to nurture your inner optimist
You may have been born into a family that made it difficult to feel optimistic. Or, maybe you were once an optimistic person but now feel beaten down by everyday stressors. Neither scenario prevents you from cultivating optimism in your life today. According to Gielan, optimism is like a muscle anyone can build. All it takes is practice. These tips can help you exercise and nurture even the tiniest seed of optimism.
Learn to view optimism as a rational response to trouble. Rational optimists see the world for what it is and understand there are going to be problems. They also believe their actions can make a difference and so maintain a solution-focused mindset. Optimism isn't some pie-in-the-sky idea that life is perfect. It's the rational belief you can face trouble head on.
Celebrate small improvements. Winston Churchill said, "Perfection is the enemy of progress," and the adage certainly applies to optimism. Will you feel optimistic 24/7, no matter what's going on? No. But as long as you're making progress, you're on the right path.
Become more mindful. Mindfulness allows you to focus on the here and now. The more mindful you learn to be, the less likely you are to ruminate over things that have gone wrong in the past or worry about the future. Stay present in this moment.
Jot down positive emotions. Research has shown that merely stopping to write down a positive thought, feeling, or experience can improve optimism. Keep a small notebook handy and when something good happens, make a quick note.
Practice cognitive restructuring. Cognitive restructuring works like this:
- You realize you're worried or something has triggered a negative thought or emotion.
- You take a moment to figure out what it is you're feeling and identify the thoughts tumbling through your mind.
- You quickly search for evidence to support or refute the thoughts. Let's say you run into the bank to withdraw money, and the teller (who has never been very friendly) gives you a sour look. You immediately assume it's because your bank balance is low or because you were late making your car payment. Before you allow negative thoughts to fill your mind -- about the teller or yourself -- look for evidence. If you have no concrete evidence to support your suspicion, practice letting it go. At the end of your life, you're not going to care that a bank teller may have given you a dirty look.
Connect in a meaningful way with others. Social connection is one of the most significant predictors of personal happiness and is strongly associated with optimism. Reach out to someone each day, whether it's a family member, old friend, or new acquaintance you would like to get to know. We humans are social creatures, and as such, thrive when our relationships are healthy.
Becoming more optimistic isn't like flipping a switch. It may take time and focus, but optimism is a trait that can benefit your life, emotionally and financially.