Be Optimistic and Improve Your Finances

When times are hard, it can be difficult to be optimistic.

However, research has shown that being optimistic can help you improve your finances. Personal finance author Katie Brockman wrote an article entitled “Optimists Are 7 Times More Likely to Have Better Financial Health, Survey Says“.

In her article, she cites research that shows that optimists are more likely to take steps to improve their financial health.

For instance:

• Optimists are more likely to seek out financial advice
• Optimists are more likely to show interest in learning about money management
• Optimists are more likely to change their habits after a setback
• Optimists are more likely to save up money for a major purchase

However, it can be difficult not to feel pessimistic if you have experienced a recent setback, like a job loss. Yet, even in difficult times, there are things that you can do to feel more optimistic and improve your finances.

Goal Setting

Setting goals can help you look to the future instead of worrying about the past.

The key to setting good goals is to start with small steps. Setting too aggressive goals, or goals that are too far into the future, can be counterproductive and demotivating. Start by setting small goals, like putting $10 or $20 a week into your savings account or reducing your restaurant expense by $20 a week.

As you meet these small goals, you will gain confidence and optimism. This increased confidence will reinforce the behaviors that will help you set and reach even more significant goals.

Build a Plan

Building a “financial plan” can help you see the bigger financial picture and give you a greater sense of control.

The trick to building a financial plan is not to get overwhelmed. You need to build a plan that works for you. A plan that is too complex can be difficult to track, which can cause you to abandon the plan.

Your plan can be as simple as writing down your larger financial goals and then listing the steps to reach the goals.

For example, if your goal is to increase your cash balance, your steps (i.e., plan) may include:

1. Write down your current cash balance
2. Estimate your expected deposits and withdrawals for this month
3. Calculate your expected end-of-month cash balance
4. Take actions to increase deposits and/or decrease withdrawals
5. Compare your actual end-of-month cash balance to your predicted cash balance
6. Go back to step (1) and repeat

Writing your plan down and tracking how you are doing against the plan will increase your confidence and optimism.

Support Groups

We can increase our optimism and chances of success when we join with other people in similar situations. Reaching out to friends, coworkers, or others that you trust and are in similar circumstances can help you share ideas and find support.

Social media, financial websites, and newsletters that also provide valuable insights and useful recommendations for improving your financial management skills and increasing your confidence.

Feeling like you are not alone in your struggles can improve your chances of taking positive actions to improve your finances.

Gratefulness

Take the time to appreciate the things you have already accomplished in terms of your possessions and your relationships.

Many studies have found a link between gratefulness and individual happiness.

Appreciating what we already own and have accomplished can increase our confidence and optimism and help us live healthier, happier and more productive lives.

• Being Thankful for Having Less
• The Connection Between Personal Finance and Self-Esteem
• Out of Reach Financial Goals
• Income, Debt and Happiness
• Dealing With Depression During Tough Financial Times

Reviewed November 2024

About the Author

Joel Fink is a retired CPA and financial services executive living in Dallas, Texas. He enjoys writing articles that help real people with simple ideas to manage their money and improve their lives.