How were you feeling the day you had to turn in the form telling your ben­e­fits depart­ment what per­cent of your salary you wanted to set aside for your 401K? Or the time you were deciding to rack up $5,000 in credit card debt so you and your spouse could take a two-​​week cycling vaca­tion in the south of France? What mood were you in when you got that $10,000 check from your late aunt’s estate and were debating whether to invest it all in your Van­guard index fund or spend$1,500 on that leather jacket you’d been coveting?

A new paper by pro­fes­sors at North­eastern, Har­vard, and Uni­ver­sity of Cal­i­fornia at River­side says that if you were feeling a sense of grat­i­tude when making those deci­sions, you would likely have put the max­imum in your 401K, fore­gone the cycling trip and invested all $10,000 in your index fund. According to the paper, “Grat­i­tude: A Tool for Reducing Eco­nomic Impa­tience,” to be pub­lished in the journal Psy­cho­log­ical Sci­ence, most of us fight an impulse for imme­diate grat­i­fi­ca­tion when we make finan­cial deci­sions, espe­cially if we’re feeling sad or even just neu­tral about our state of affairs. According to the con­ven­tional social sci­ence wisdom, we make the best finan­cial deci­sions when we take emo­tions out of our decision-​​making com­pletely. But David DeSteno, a psy­chology pro­fessor at North­eastern Uni­ver­sity and one of the paper’s lead authors, says he and his col­leagues have empir­i­cally proven that grat­i­tude pro­duces supe­rior finan­cial decisions.

Read the article at Forbes →