Afford Anything - The Financial Benefits of Optimism, with Michelle Gielan

Episode Date: February 24, 2021

#302: Did you know that optimists worry about their finances 145 fewer days than pessimists? They’re also more likely to save money, and are 7x as likely to experience better financial health. Michelle Gielan, bestselling author of Broadcasting Happiness, defines optimism “as the expectation of good things to happen and the belief that our behavior matters.” She shares specific tactics and mindset shifts we can make right now to become more optimistic and resilient, and, in the process, develop a better relationship with stress. For more information, visit the show notes at https://affordanything.com/episode302 Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. Every choice that you make is a trade-off against something else. And that doesn't just apply to your money. That applies to your time, your focus, your energy, your attention, anything in your life that is a scarce or limited resource. And that opens up two questions. Number one, what matters most? And number two, how do you align your daily, weekly, and annual decisions in a way that reflects that? Answering those questions is a lifetime practice.

and that's what this podcast is here to explore. My name is Paula Pant. I am the host of the Afford Anything podcast. We talk often about how investing is not the study of finance. Investing is the study of behavior. And every aspect of your investor behavior, from your contributions to your asset allocation, to whether or not you panic and buy on the dip,

all of those elements of your behavior have a far greater impact on your investment returns than any, hypothetical movement of decimal points on a spreadsheet ever will. Mastering money is mastering money is mastering emotion, behavior, habit. And it is for that reason that I prioritize speaking with people from the behavioral fields, whether that's behavioral economists or psychologists whose work intersects with finance, business, and success. And so, it's a long lead-in, but so for that reason, I've invited Michelle Gielin to be our guest on today's episode.

Michelle has spent the past decade researching the link between success and happiness. She was a national CBS news anchor who then pivoted and got an advanced degree in positive psychology from the University of Pennsylvania. She's a featured professor in Oprah's Happiness Course, and she's the executive producer of the Happiness Advantage on PBS. She runs the Institute for Applied Positive Research and was named one of the top ten authors on Resilience, by the Harvard Business Review. In our upcoming interview, we discuss recent research that she's done around the relationship between optimism and financial well-being. Here she is, Michelle Gieland.

Hi, Michelle. Hi, how are you, Paula? I'm excellent. How are you doing? Good. Thanks so much for having me on. Oh, thank you for coming on the show. Now, Michelle, you started researching positive psychology in the middle of a recession.

What did you learn at that time and how can you? we extrapolate from that in order to figure out how to get through the current pandemic? Yeah, you know, when we saw the great recession, I thought this was going to be the big one, and we would never see anything like that, hopefully, ever again, during the course of our lifetimes. But unfortunately, obviously, we've seen what 2020 brought us. And I really think it's been more pervasive because it's affected so many aspects of our lives. You know, I ran a study where we We're looking at how people feel about their finances now versus last year. And 40% of people say that they're in a worse position than they were.

Seeing all that, you just see the potential for the research now because that's what we saw almost 10 years ago. So this was the height of the recession. We're seeing people losing their homes, their jobs, their retirement savings. And it was just emotional. It was awful to witness this. And so at the time, I was a national news anchor at CBS News. I hosted the CBS Morning News and a couple of their shows. And I felt as a journalist in some ways very helpless.

And I can't imagine how people in these dire economic situations felt themselves. And so my producer thought I was a little crazy. But in the midst of all of this, I was like, why don't we do a series called Happy Week? And he's like, what are you talking about? But the idea was what I felt like we were doing on the news was we were reporting problem, problem, problem, problem, with little to no talk of solutions. And so I'm so grateful he was open to this idea. What we ended up doing was we had a week where we did a series of interviews only focusing on tackling those biggest challenges.

The reason we called a happy week was we wanted to take back control of our happiness in the midst of the recession instead of waiting helplessly until the economy recovered. We got the greatest viewer response of the year from that programming. And more importantly, at least for me at the time, was it shined a light on the potential for positive psychology. All of our experts that appeared on the program had some connection to positive psychology. They gave us concrete, research-based positive habits or strategies or tools that we can engage in to overcome these challenges that we're experiencing. So like, for instance, if someone was facing, their home was facing

foreclosure, they had actionable steps they could take. If they were fighting with their spouse over money, they could have better conversations using some of these tools. And positive psychology has been, first of all, it's the scientific study of happiness and human potential. It allows us to understand how we not just survive experiences like this, but how we can thrive in the midst of these great challenges, and then how we can help other people do the same. And what I love about it, you know, I have a degree in engineering. I'm a total engineer, as they call it. I love science. I like the research component of it. So we can understand And if you walk into a company and you implement certain positive habits, what happens to business

outcomes? What happens to engagement? If someone trains their brain to be more optimistic, what happens to their financial well-being and how they feel about their financial picture? Having the data allows us to understand this research more deeply and then how to apply it. So that's what I've been doing for the last decade or more of my life, you know, after leaving CBS and getting a master's and now getting to see the ripple effect that this research has as people have been handling the fallout from the pandemic. I'm very grateful to get the opportunity to

witness this. Obviously, would rather not have seen any of this because of the, you know, the challenges we're experiencing. But I'm seeing these incredible stories of people thriving amidst great, great challenges. And so what common threads have you found? What practices did people use that were proven effective or demonstrated to be effective at that sense of thriving back in the Great Recession that are also being used today? Well, what we see from now more than a decade of research is that when our brain is in a more positive and optimistic state, we fuel every single business, educational, and health outcome that we know how to track.

When our brain is more positive, optimistic, and resilient, we experience three times greater levels of creativity, 31% higher levels of productive energy. If we're a sales professional, we outsell our pessimistic counterparts by 37% or 56% was a follow-up study. People experienced 23% lower levels of stress-related symptoms like headaches, backaches, and fatigue. And probably my absolute favorite out of all of these is the research and the work that I've been doing in partnership with Frost Bank, looking at the impact of optimism on financial well-being. showing that when we are more positive and optimistic, we actually see that's very directly connected to experiencing higher levels of financial well-being.

So how is optimism, with regard to research, how is optimism defined and how is it measured or quantified? Yes, and thank you so much for asking this question because I think this is the biggest misunderstanding that people have when they hear the word optimism. They think it's just thinking positively, like in the vein of Pollyanna. you know, rose-colored glass is ignoring reality. When we start to understand the definition, it transforms our, I think, people's desire to want to engage with this research and ultimately fuel a more positive and optimistic mindset.

So optimism is in our research defined as the expectation of good things to happen and the belief that our behavior matters, especially in the face of challenges. So my husband's a happiness researcher. also. And I know we're two married happiness researchers. I know what that means, what that can mean. But anyway, he's very funny. If you've seen a TED talk called the Happy Secret to Better Work, it's one of the most popular they have on the site. His name's Sean Acor. And you just laughed for 12 minutes straight. That's him. He's extremely funny. So we go out and give toxic companies. It's like our day job, right? And we don't always get to travel together. And this is, of course, pre-pandemic. We haven't been traveling much recently.

So anyway, I love swapping stories with him when he comes home and he says, you won't believe what happened. I said, well, I gave this talk at this company on the power of optimism. And the CEO absolutely loved the research, wanted to figure out how to more deeply embed it in his organization. And so he offered me a ride to the airport. And that way we could talk about it. So Sean said he got in the guy's car. He puts on his seatbelt. The guy gets in, doesn't put on a seatbelt, which is weird.

And after a little while, the seatbelt bell is ringing. So Sean, like, very, very funny, thinks he's making a joke, turns to the CEO and says, oh, so you don't, you don't wear a seatbelt? So, I's like, no, man, I saw your talk. I'm an optimist. So Sean's like, no, you are something else, but I'd still love to work with you. But so as Sean says, optimism doesn't stop cars from hitting us. It doesn't stop reality from impinging upon us, right? So what we're talking about in our research is rational optimism.

It's taking a realistic assessment of the present moment while maintaining the belief that our behavior matters, especially in the face of challenges. So in the midst of a global pandemic, for instance, it is very important that we stay in touch with our finances, you know, in the near term, what this has implications for in the long run. It's very important to be in rational connection with the effect that, for instance, for many people, working at home, largely by yourself, only doing Zoom. calls can have, you know, that effect that it can have on your well-being, when we can really understand truly what's happening. But in the midst of that, we believe that our behavior makes a difference. That's when we feel a sense of hope, we feel a sense of empowerment, and we feel ready to pick an action step and move forward. So it sounds to me as though optimism is defined as the perception of control coupled with anticipation of a,

desired outcome in the future? Yes, absolutely. That's spot on. At a tactical level, are there specific practices that across the decade plus of research you've done, specific practices that have repeatedly increased either perception of control or anticipation of more desired outcomes? Yeah, so we have now been focused on researching those, what we call the two-minute positive, habits that help us train our brain to see reality in a different way and thereby influence our levels of optimism. And so, you know, on a very simple level, and these are great things to engage others in as you practice it yourself, the practice of gratitude can be instrumental from a scientific

perspective in transforming how we experience our world. Writing down three new and unique things we're grateful for each day, around the dinner table sharing three new and unique things each of us are grateful for out loud. There's actually a fantastic study. I love this one where if you do it with your spouse, you just, you know, share three things right before you're going to bed with each other out loud, that after six months researchers found that these couples rated each other as more attractive than they were when they started the practice, which I think is amazing because like that not only shifts

It's your own perception of your life, right, as you're recounting the best parts of your day, but also it's shifting how others see you. And it makes sense, right? Because if you think about when you first meet somebody, you know, there's that joke, oh, it's the representative. You're dating the representative, not the real person. But the representative is usually excited about life and talking about the best of what's happening in their world.

And so you're getting a chance to get to know them on a more, on a deeper level. But, you know, we found in terms of financial habits, I mean, optimists think and act completely differently, which speaks so much to the definition of it, right? They're not just thinking positively, but they're actually doing positive habits. You know, we found people who are optimistic as compared to pessimistic were significantly more likely to have socked away some money. It's not, it doesn't have to necessarily be a ton of money. They just have some money and savings.

It's those small behaviors that remind your brain your behavior matters. Even if you're just saving $5 a week, reminding by engaging this habit and seeing the progress, you're reminding your brain that this actually makes a difference in my long-term goals. You mentioned when you were discussing gratitude naming three things daily. So it strikes me that there's quantity and then there's frequency. is there research around the optimal quantity and or frequency of something like a gratitude practice? Yeah, so it's really interesting. We have done this with some folks we worked with, you know, when we do workshops and stuff, we say, okay, right now I want you to start writing down a list of all the things you're grateful for.

And this is before we've really gotten into the research or talked about definitions and all that stuff. What we find is the average person in that moment can come up with about 13. and the half of them are their family members, you know, the ones that they like. So what ends up happening is we sort of can hit a roadblock where we're not necessarily able as easily to see those things around us. But by day three or four of practicing just three things, people become better at it, right? Because it's not about those 45 seconds that it takes you to write down three new and unique things. It's about the 23 hours and change of the rest of your time. day, that you see the world in a different way as your brain starts scanning for more of those

things to add. And by the way, I should also say that what's, what really helps is not only those three things, but also writing why. So you're really differentiating that sunset on that Thursday from the sunset that you saw the week before. Why is that sunset so wonderful to you? Well, maybe it helped you have a moment of relaxation or, it, the pink was just the brightest you've seen in a long time. I'm grateful for my health. Well,

yeah, everyone is, but why? Oh, I'm grateful for my health today because I got to go and run around with my child outside. It's that specificity. So more important, I think, than the number. So to answer your question more clearly, I think three is good because it's enough to write some things, but it doesn't seem like an overwhelming list. Frequency of daily for a period of time is very helpful because it gets your brain in that rhythm. And then specificity is extremely important because then you're drilling down for the big things to see the small parts of them that really are what you're grateful for so that you can

next day revisit that same health topic, right? But you're doing it in a different way. And what you found in your research is that the opposite is also true. You've described research on other podcasts. You've described research in which the news, if a person is exposed to news early in the morning and they hear negative news, that impacts them seven, eight, nine, ten hours later. Their self-reported mood. Yes.

This was fascinating. I knew intuitively that being exposed to negativity from the world can have a negative impact on your mood and mindset, right? Just and obviously anecdotally, everyone tells you, oh, the news is so depressing. and it makes me feel awful. So I wanted to see from a research perspective if we could quantify that. What we did was we exposed people to three minutes of negative news in the morning, the control group, we had three groups.

We had one that received three minutes of basically neutral news. And then another group received three minutes of more positive news. And then six to eight hours later, we surveyed them and we asked them about their day and a whole host of questions. And what we found was that the people who were exposed to just three minutes of negative news had a 20% higher likelihood of reporting their day as not good than the people who had been exposed to the positive day. So if you're exposed to just three minutes of negative news in the morning, you increase your likelihood of having a bad day by 27%, which is remarkable. And that is after six to eight hours.

So you're still feeling the effects as you're cooking dinner that night. But, you know, that said, what I think was even was significantly more hopeful in terms of how to transform our day is, yes, create a media moat first thing in the morning and give your mind a time to wake up and bolster its positive resources by doing gratitude, by listening to podcasts like this, right, where you're filling your brain with positive content by being really mindful and present at breakfast with your children or taking quiet time to just sit and watch your breath go in and out. But also, I think what's more hopeful was a follow-up study, which found that if you don't just expose your brain to problems, but you go on to focus on solutions, these are potential or actual solutions your brain can take, that you actually improve your creative problem-solving abilities on subsequent unrelated tasks. So what that tells me is that you can engage with the negative.

You just can't leave your brain there. You have to move your brain on to a place where it sees a path forward. It can problem solve. It can remember its behavior matters. And ultimately then hopefully spur that positive action that helps you overcome challenges in your own life and in the world. We'll come back to this episode after this word from our sponsors. Fifth Third Bank's commercial payments are fast and efficient, but they're not just fast and efficient. They're also powered by the latest in payments technology built to evolve with your business.

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Even if they're on a complete news diet, they would still have to deal with a certain level of negativity in their day-to-day job, for example. How do you engage with that negativity and yet move your brain on? when your brain just doesn't want to move on. Yeah. So if you have a negative coworker or, you know, for some people, unfortunately, a negative spouse, I mean, you're going to get your dose of negativity even if the news is off, unfortunately.

But the flip side of it is happiness all the time is actually a disorder. We don't study people like that. So that ultimately is not our goal, right? We're not trying to be completely cut off from negativity. We're not trying to, because then that goes back to the ignoring reality part. So I think what you're asking is the really brilliant question, which is even if you're dealing with these sources and turning them down when you can, the reality is you're still exposed to negativity.

So how do you deal with that? I always try to do two things, and this is all gleaned from the research. First of all, the more you can bolster your own positive resources by engaging in these positive habits, the more that you lessen the effect of, let's say, negative people. So I'm thinking a guy at your office that you have to engage with, he just drives you nuts. He's not going to have such a power over you if your brain has been sort of made battle ready before you engage with him. And then another thing that I always talk about is this concept of taking the strategic retreat. So if you know that somebody that you have to deal with is giving you trouble, you can take a retreat. You bolster those positive resources.

I mean, even opening up your phone and looking at pictures from your favorite folder of your children's smiley faces or a trip that you went on two years ago to get your brain in that great state. And then when you reenter the fray, you just have a game plan. So how can we limit exposure with that person? How can we keep the conversation in a good place? And how can we, if it's like a coworker, for instance, just get what we need and get out. So really keeping it to a two-minute drill where we just, we know the game plan and then, you know, we get in and get out. And this is from a person who knows basically nothing about football. So I had to check all this stuff with my husband.

But I think two-minute drills can be really valuable both on and off the field. The first suggestion that you made was to get your mind battle ready. How do you do that? I mean, I think it's about, first of all, understanding that when somebody is negative, so negativity is merely expressed suffering. The more that we can keep that top of mind, the more compassion we can have for those people that are going around and being toxic to other people. It doesn't excuse them necessarily, right, because we don't want to be. to just say, oh, well, it's just because you're suffering, so you can just ruin my day. But if we can remember to have compassion for those people experiencing that, I think that softens our heart,

and that helps us not let them have such an effect. Then the more we can keep our brain in that positive state, I think the less that they're going to have that negative effect. I often talk, I wrote about this in my book, Broadcasting Happiness, about this idea of fact checking. So I take a lot of the ideas and the tools from media for my days in media and fact-checking a story. It's a very basic and very important thing that we all need to engage in, whether we're journalists or not. When we're experiencing something in our world that's causing us stress or when we're engaging with somebody that's negative, we can try to help our brain see those other facts that are equally true to the ones that our brain is currently focusing on, that will help us experience our reality differently.

So not about a person, but just about a general experience that we go through that's very common. I'll give you an example. I'm never going to finish this project in time. Well, of course I'm not going to finish this project in time because I am completely swamped. All my colleagues are so busy. I can't ask anyone to help. I have my son's recital later this week. I'm exhausted.

I'm never going to finish this project in time. Well, if we can get really clear with what we're stressing about and why we're stressing, It's also equally possible to look for those other facts in our reality that help us see a new story. So these are successes, wins, resources, relationships, anything that we can leverage or any past experiences we've had that just point to a different relationship with that stress. So in this example, I'm never going to finish this project in time. Well, you know, I have been at this company for four years. I've never needed a deadline extension before. And actually, I can't ask those three people, but I could ask these other two guys to help me with small pieces of this proposal.

And they could write small paragraphs about, you know, speaking of a proposal, I have the proposal that I handed in about six months ago on my computer. I could use that as a template, a jumping off point. And if I were to add up the number of hours between nine and six between now and the deadline, that's actually more than 20 hours I could devote to this project, right? It's a completely different picture. And if we can get our brain to focus on those equally true facts, our brain can start to calm down and then we can start to come up the action plan and see the path forward. Right. So it's very normal for us to have stresses or to get kicked off our game by somebody

and their negativity. The question is, how quickly can we help our brain see another picture to get back to a better place. So if you're having trouble with someone in particular and their toxicity, you can ask yourself questions like, well, what do I like about them? How have they made a positive contribution to our family or to this office? What are other ways that you can see this person? So it doesn't necessarily excuse them for, you know, dumping on you, but it does allow you to just ever so slightly soften towards them and hopefully transform your relationship with them. It sounds to me like it's the practice of converting I can't to how can I?

Oh, I love that. Yes, yes. Because then you're not falling victim to external circumstances. You're seeing your power within the world to change your reality and to change how Others see the world. We're extremely influential over other people. The problem, the challenge in all of this is that, you know, I go out to give toxic companies and I'll ask an audience, right?

Hundreds of people. How many of you have ever had someone say, you can't change other people, right? And I get like 98% of the audience raising their hands, right? Because we've all had someone say, you can't change other people. I think that this has become a rather oftentimes unspoken belief in our, own mind and our thinking that is not only disadvantageous to us, but it's also scientifically broken and backwards. We're actually changing people all the time. The thing is, one who's focused on cultivating a positive mindset and being pleasant to other people,

we forget our power. If we can't change other people, then how come that negative guy on our team can sometimes so easily influence us? So we're changing people all the time. And there's study after study that shows that if you walk into a doctor's office and you prime them to be positive, the doctors will come up with the correct diagnosis, 19% faster more accurately than doctors at neutral. If you get kids to think of a positive memory and then give them a set of blocks, the kids in that positive condition, we'll put together the blocks 50% faster and better than the kids at neutral. Managers who get their teams to start focusing on all that they're already doing right by praising one person new and different each day for a period of three weeks, they're able to raise

the entire team's level of productivity by 31% in that period of time. And this is all just by getting teams or individuals or family members to focus on the good, focus, get their brain in that positive state. And we have the ability to transform other people. How do you prime somebody to be positive? Oh, gosh, it's been sometimes it's so easy. In the children's study, they literally just asked them about a positive memory. Did you have jello for lunch today? Which only works if they actually had jello. It's worth for otherwise.

In that doctor's study done by Cornell, the researchers gave the doctors a small bag of candy, which they weren't allowed to eat because that might influence their glucose levels, right? But it was just that simple gift that was so transformative for them. They felt happier and then they did better at their jobs. So it can be something so simple.

As our children get older, we have this month, they'll be seven and three. As our children get older, I would like whenever they have important tests to just in the car, on the way to drop them off, be talking about all the great things. Like get their mind completely off this test and focus on the fun trip that you went on or, you know, the fact that they're so brave because they just jumped off the high dive or whatever that makes them feel happy and alive. because it literally can be a two-minute conversation that puts them in that positive state. In the midst of all of this conversation about positivity, it strikes me that we are, humans are prone to negativity bias.

Is that something that we need to overcome? How does that influence all of this, the whole body of research of positive psychology? Yeah, so we're real experts at finding negative stuff in our environment. Some of us more than others. But yes, we are very good at it because it's a survival instinct. And it was very important to us for many, many, many years. To some degree, it's still important. But the unfortunate thing is that for many people, from a scientific perspective,

what we're seeing is that they are still on high alert when they need not be. And it's actually tearing down every organ in their body. What I mean by that is that there is little chance that, for instance, when you're sitting in your office or you're at home, that you're going to be attacked. And yet, our brain can act as if it's on high alert like that's actually going to happen. And so what we see is people experiencing these responses to stress, to stressful things in their environment, as if they're being potentially attacked by somebody. So what we need to do is as best we can build awareness around this, help our brains find

more peace and calm when appropriate and try to move ourselves away from that stress state. So we did a study with UBS with stressed out managers. This was a handful of years ago. We split these very stress managers into two groups. The control group we ran through a typical stress management training, how you deal with stress. And then for the experimental group, we put them through a new kind of training where we showed them equally true scientific studies that showed how stress can be enhancing to the body and mind.

It can improve mental agility and cognition, your memory, your energy levels. Then we taught them how to see, own, and use stress and basically trying to transform their relationship with the stress that they were experiencing so they could channel it in a different direction. Then we tracked them over time. And four months later, during a time in their business when it was extremely stressful, we found that the experimental group, those who had tried to transform their relationship around stress,

they were actually experiencing a 23% drop in stress-related symptoms like headaches, backaches, and fatigue. What this points to is, first of all, our mindset is malleable around stress at any point. And what we also came to see is that this element, we call positive engagement, right? Your positive engagement with stress is actually significantly predictive of your long-term levels of success

that you'll have over the course of your lifetime. So if we can move our brain away from that natural instinct to feel like there's threats in our environment everywhere all the time and instead help it calm down and channel its energy in a different direction, we actually significantly reap the benefits. We'll return to the show in just a moment. When you talk about in this research around the relationship between lack of stress and greater success over a lifetime. How is success measured? Is it done by a person's subjective definition of success, or are there specific metrics that are held to the whole group? That is a phenomenal

question. A lot of it has to do with one's perception of their success over the course of their lifetime. Some of it does have to do with just general success markers that we as human beings have developed in this in modern society right like how much money you make and whether or not you're promoted regularly so this is in the work domain or how accomplished you might be in your community and so it's sort of a mix of those two but a lot of it is about your perception of your success and how successful you feel that you have been over the course of your career i think that perception piece is just so it's just so amazing uh and and relates to so many aspects of our lives and That's where the malleable piece comes in, right?

Some researchers have, you know, there's hot debate, obviously, in the scientific community about this. But what they have generally come to believe is that if I know everything about your external world where you live, how much money you make, what kind of car you drive, married or not, kids are not, et cetera, et cetera, I can, as a researcher, only predict about 10% of your long-term levels of happiness and success. But meanwhile, the other 90% is. is a mixture of your genes, sort of your pre-genetic disposition, right, for optimism and positivity,

or pessimism and negativity, et cetera, and how you process the world. And so the debate is, is it 50% genes and 40% perception or, you know, what's the split there? I don't think it matters so much. What we know is that it's their, your genes set your pre-genetic, or your genetic predisposition, your set point. And then after that, there is, a sizable amount that is really up to you. It's up to your upbringing, your environment, what you hear from your parents. And then as you become an adult and realize you have agency over all this. So back to what you're talking about about control, you can actually make a difference in how you see your reality. Because that, we all know, we have friends like this.

We've seen this in television shows. So when you're asking about success, two people can move through their career and let's say at the same organization, get the same promotions and end up in the same place at the end of their career. And one can feel like she is just winner, winner, chicken dinner. That was amazing. I have just done so well over the course of my career. And the other just feels like a failure. And there's really, if you're just measuring by job and by typical markers of success, both of them have been extremely successful. So perception really makes a difference. To that extent, how is it that anticipation of positive outcomes in the future could be a definer of optimism, given that what you've just described in the difference of person A

versus person B, it seems to me as though the difference between them is the gap between expectation and reality. So wouldn't it be the case that higher expectations would mean that you've got a wider delta between expectation and reality, therefore causing greater disappointment? I think that having reasonable expectations drives you towards, wanting to achieve those. And if we have irrationally high expectations, then I think it can lay the groundwork for a massive disappointment if we don't get there.

But I know from my own personal experience, I always wanted to be in the hardest class that I could in school because I thought, even if I don't do exceptionally well in here, but I do pretty good, this pretty good I'm going to learn more than I would have if I were in a class that wasn't as hard, right? So I think having, you know, you can draw some similarities there and you can say, well,

if I expect good things from myself or good things for my life, then I think that that can push you to want to accomplish those. But whenever it's irrational, whether irrationally high or irrational types of outcomes, that that's never helpful because that can be really disappointing when you don't achieve them. So then those higher expectations are the precursor to the habits that give you a higher likelihood of achieving set expectation. Yeah. And because if you engage in those positive habits, then it's a self-fulfilling prophecy. Right.

That makes sense. We've been discussing stress. Let's talk specifically about financial stress. Many people describe the experience of financial stress as something that, at least anecdotally, I've heard from many people in my audience that that financial stress seems like stress of its own kind, a unique type of stress that is unrelated to any other forms of stress. Is there heft to that? I mean, is there something special about financial stress that sets it apart?

I think so because. finances are so fundamental to every aspect of our lives. If we don't have our financial house in order, it can feel like it threatens every area of our lives. And, you know, we've been talking so much about optimism. We've looked at the role of optimism and financial stress or on the flip side, financial well-being. And the connection is just remarkable. I, you know, I've studied optimism for a decade. I did not expect the connection to be so clear. is when we did this study with Frost Bank. One stat that just basically blew my mind was this concept of optimist stress about their

finances, 145 fewer days than pessimists. I mean, that's almost five months. So you think about all the energy that the pessimists are spending, worrying about their finances, and if anyone is worried about that, oh, this is just, optimist must be the rich ones, right? they have all their stuff taken care of. We actually, we, first of all, we surveyed more than 2,000 adults nationwide. We asked them all kinds of questions to understand their financial well-being.

And then we leveled the playing field. So we controlled for things like wealth, income, skills, behaviors, demographics. So we got just an even playing field to understand where optimists fall on the income spectrum, on the wealth spectrum, and then how that impacts their financial well-being. We found that optimists, first of all, were on all parts of the spectrum. So it really had nothing to do with how much money you were making. It was just about whether you believed your behavior made a difference, whether you expect a good thing to happen.

And then on the financial well-being side, those optimists ended up stressing about their money, much less often than the pessimists. They also enjoyed seven times higher levels of financial well-being as well-being, I should just say, we adopted the Consumer Financial Protection Bureau definition. This is really, as you know, I'm sure it's a very full picture of your financial life. So it's not just about how much money you're making or how much you have stashed away in the bank. It's actually a number of things. It's like, can you pay your bills on time? Do you have a little bit of extra money if you want to go take a class or go out to dinner?

It's really about that full picture. Do you feel like you're in a good place and do you feel like your money allows you to live your life to bring happiness to you? And if so, then you're you experience higher levels of financial well-being. Is financial well-being or feeling of financial well-being fairly consistent throughout one's life? That's a really interesting question. And I would say from personal experience, probably not, but I haven't actually studied that directly. I do know that you often hear the story from the person who, who is poor and who's made it rich, that making it rich, yeah, it does make things easier in some

ways, but it's not the be-all and all when it comes to happiness. We're coming to the end of our time, but I want to wrap up by asking about behaviors that optimistic people have with their money and specifically anything that's applicable for the audience. So for the people who are listening to this, are there any specific behaviors that have been shown in the research to be beneficial that people can start doing right away? Absolutely. And this was one of the pieces of the study that I was most interested in because I love

these small positive habits that we can engage in. So one of them is to focus on what's working. We found that optimists really have a clear picture of what is working well in their financial life. And then they just make sure to celebrate those things. So if they're saving $5 a week in their savings account and maybe instead of buying that cup of coffee, right, the fancy one at Starbucks, then they focus and celebrate on that. We also found that they seek progress, not perfection. So instead of having some absolutely perfect plan and a perfect picture of what your life financially can look like, instead, just look at what you can do over the next year or the next couple years and have a rough plan.

The rough plan ends up being significantly more helpful because even though we expect good things to happen, we don't want to be necessarily attached to specific outcomes, especially those big ones, that can lead us to disappointment. Instead, sort of have that rough plan and be nimble and as situations may change. And so you're still trending in that positive direction, but you're not overwhelming yourself with it. The one I think that has been most helpful, and this is what we dove into more deeply in the second study we did together, was to take the taboo out of money, to really have meaningful and helpful conversations. We found that 57% of American adults talk about money regularly and that 94% of optimists discuss their finances at some point in their lives, while pessimists are

three times more likely to never discuss their finances. So even though it's 57% percent of American adults, it's significantly more optimists than pessimists, which makes sense, going back to the definition of optimism. The pessimists mostly don't talk about their finances because they think it might be unhelpful or it feels unnatural to them. Like the unnatural pieces they wait for other people to initiate conversations as opposed to jumping in there and starting those conversations themselves. So if you want to train your brain to be more optimistic, this is a fantastic area to

work on. And so we aim to understand what optimists do to more deeply practice this particular tool. They find their squad. They always had, we found, like, you know, the group of people or one person that they can go to to talk about their finances. These are people who might make around the same money as them or might be in a similar job as them or maybe they're someone who's a respected, you know, member of their family, for instance, that they feel comfortable talking to. They also seek perspective. Optimists are two and a half times less likely to monopolize a conversation. They ask open-ended questions.

They listen to the perspective of other people. They're very aspirational. 58% of optimists typically have financial conversations that are goal-related, which I love having discussions about goals because I leave those conversations totally energized to do something great. and they also keep it brief, which that is something to really keep in mind next time you're planning a financial conversation. If sitting down for an hour with your financial planner or with a friend to talk about your finances seems like too much, just say, hey, why don't we

meet with for 15 minutes or 30 minutes? It's just having more regular, shorter conversations that can be more helpful than not having those conversations at all. So those are great ways to ultimately practice optimism in the financial realm and then ultimately hopefully reap the benefits in other domains of your life. Excellent. Well, thank you so much, Michelle. Where can people find you if they would like to know more about you and your work? Absolutely.

I would love that. You can go to my website, Michelle Geelan.com. And then if you want to do a optimism challenge, Frost offers a fantastic one at opt for optimism.com. Thank you, Michelle. Well, what are some of the key takeaways that we got from this conversation? Here are five, and they focus on actionable steps that you can take. Number one, specificity is key if you are trying to adopt a gratitude practice. Michelle says that listing three things you're grateful for on a daily basis is a good foundation upon which to build.

And the reason, remember we talked about both quantity and frequency, the reason that her suggestion was three items daily, was because three is just a enough to prime your mind, get your mind thinking about this topic, the topic of things in your life that are going right, things you're grateful for. It's just enough to kind of get your wheels turning and doing it daily is frequently enough that you're thinking about it every day. And then the real benefit, as she explains, is the other 23 and a half hours, 23 and three quarters hours of a day when you are doing other things, your brain will still be looking for things to be grateful for. Now, in order to prime that pump, be specific. The more specific, the better.

You know, you could say, oh, I'm grateful for my pets every single day, but why today specifically? What have they done today? What is it about today? That makes that top of mind for you. The more specific you are, the more you prime your brain to continually search for that information. What really helps is not only those three things, but also writing why. So you're really differentiating that sunset. on that Thursday from the sunset that you saw the week before.

Why is that sunset so wonderful to you? Well, maybe it helped you have a moment of relaxation or the pink was just the brightest you've seen in a long time. And so that is key takeaway number one. Specificity is key when practicing gratitude. Key takeaway number two. Engage with negativity productively. It's impossible to design our lives in such a way

that we won't run into negativity. Even if we create a media moat, there's still negativity on social media, in our jobs, with our family and friends. There's negativity everywhere. And so, since we can't avoid it, how do we manage it? How do we make ourselves ready

to encounter negativity out there in the wild? Michelle suggests taking a strategic retreat. Taking the strategic retreat. So if you know that somebody that you have to deal with is giving you trouble, You can take a retreat. You bolster those positive resources. I mean, even opening up your phone and looking at pictures from your favorite folder of your children's smiley faces or a trip that you went on two years ago to get your brain in that great state.

And then when you reenter the fray, you just have a game plan. When possible, set boundaries beforehand. Know your limits. Go in, get what you need and get out. Minimize the time spent interacting with the person as much as possible. And remember that negativity is expressed suffering. This can help us have more empathy, more compassion towards others. We shouldn't excuse their behavior, but we can recognize that they're suffering.

That is key takeaway number two. Key takeaway number three. Fact-check your thoughts. What are the stories that we're telling ourselves, and are they true? Think of yourself as an investigative journalist and fact-check your thoughts before you buy into them. Don't believe everything you think. You can also gather other elements of the story that support a different, more positive, more productive narrative. If we can get really clear with what we're stressing about and why we're stressing,

it's also equally possible to look for those other facts in our reality that help us see a new story. So these are successes, wins, resources, relationships, anything that we can leverage or any past experiences, we've had that just point to a different relationship with that stress. This can help you paint a different picture and reframe your situation. Sometimes we're too close to things. It's hard to read the label when you're inside the jar. So by taking that step back, that zoom out, you can take a more objective stance and you can see things from a different light.

And so that's key takeaway number three. Fact check your thoughts. Key takeaway number four. Transform your relationship with stress. Keeping your body on high alert all the time is really terrible for it. How can we transform our relationship with stress into a better one? Michelle cited a study in which researchers took stressed out managers and split them into two groups. The control group had typical stress management training.

The experimental group had new training that showed them equally true scientific studies that showed how stress, can enhance the body and mind. In other words, people in the experimental group were shown the positive effects of stress. They were also taught how to see, own, and use stress. Here's what happened. Four months later, during a time in their business when it was extremely stressful,

we found that the experimental group, those who had tried to transform their relationship around stress, they were actually experiencing a 23% drop and stress-related symptoms. The researchers found that positive engagement with stress is significantly predictive of your long-term levels of success over the course of your lifetime. And so that means that recognizing that we have agency in situations,

remembering the power we have, can help us manage stress. Our outlook also influences how much we're impacted by stress. If we have an optimistic outlook about a stressful situation, we're likely to not feel as stressed about it. Michelle gave the example of, as a student, she always wanted to take the most difficult classes, even if she knew that she would get a worse grade in that harder class, because she thought that even if she got a worse grade, she would learn more. And so she wasn't stressed out by focusing about the fact that her grades may have been

performing worse than they otherwise could have been. You know, she wasn't stressed out about the downside. She was enthusiastic about the upside. She was enthusiastic about the fact that she was learning a lot more. And so that outlook that she had reduced her stress level. Same class, same grades, but a reframing of perspective. And so that's key takeaway number four. Transform your relationship with stress.

Finally, key takeaway number five. Create optimistic money habits. Optimists are significantly more likely to save because saving is a small behavior that reminds, your brain that you have agency and that what you're doing makes a difference. As Michelle gave the example, even saving $5, which mathematically is not going to add up to a huge amount of money, but it cues your brain into the narrative, hey, look, I do have control over my money. I have enough control of over my money that I'm able to save. I'm able to put cash away, even if it's just

five bucks a week. And once you do have that feeling of control, it continues to be. build. Optimists also stressed less about their finances 145 fewer days per year than pessimists. That's a significant chunk of the year in which optimists were free from the stresses that pessimists were facing, and they also enjoyed seven times higher financial well-being than pessimists. Given that we know all of that, the question then becomes, how can we become more optimistic with our money. Well, here are a few pointers. You can focus on and celebrate the things that you're doing right. You can seek progress rather than perfection. You can resolve not to become too attached to any one plan, have a rough plan instead, as they say, planning is everything, but plans

are nothing. And you can take the taboo out of discussing money. We found that 57% of American adults talk about money regularly and that 94% of optimists discuss their finances at some point in their lives while pessimists are three times more likely to never discuss their finances. You don't have to have long, drawn out conversations. Keep these money conversations to 15 to 30 minutes. Focus on goals and ask open-ended questions. Find trusted friends and family to confide in or find a community of like-minded people with whom you can share your goals, your wins, and your struggles. We have a great community. Affordanything.com

slash community. It's completely free. It's a wonderful group of people who are dedicated to get in this done. And it's not on any of the noisy social media platforms like Facebook or Instagram or Twitter. I love them all. I'm totally an Instagram addict. But you go on social media and you get distracted. And that's why we decided to hold our community in a distraction-free zone. in a place where you're not going to get pulled by the siren call of everything else that's on Facebook. So our community is hosted away from all of the noisy social platforms. It's in a distraction-free zone. People are much mellower, much nicer.

You don't get the trolls like you can in some other places. So it's a sanctuary where you can go and talk about money. So afford-anything.com slash community. You can talk to people there. And of course, always talk to your family, talk to your friends. You know, make sure that you're talking openly about money with somebody. I think that's a portion of that takeaway around creating optimistic money habits. If money is a taboo topic, if you're too embarrassed to discuss it, then how can you ever have a healthy relationship with money?

So part of developing financial optimism is being part of that 94% of optimists who discuss their finances with, the people around them. So those are five key takeaways from this conversation with Michelle Gielin. Hey, I have an exciting announcement. So afford anything just celebrated its 10-year anniversary. And this podcast specifically just celebrated its five-year anniversary. So happy anniversaries to afford anything and to the Afford- Anything podcast, 10 years and five-year respectively. Steve, I guess this calls for a sound effect. That's all I, that's how I can think to party.

Oh, we also have a great video of baking, well, it's a cake baking video. It's a long story. But if you are subscribed to the show notes, you will see it. You can subscribe for free at afford anything.com slash show notes. Thank you again for tuning in. My name is Paula Pan. This is the Afford Anything podcast. If you enjoyed today's episode, please share it with a friend or a family member. That's one of the most important ways that you can spread the message of financial health, financial resilience, financial optimism to the people around you. Make sure that you hit subscribe or follow in whatever app you're using to listen to this show so that you don't miss any of our awesome upcoming episodes. And while you're there,

please leave us a review. Thanks again for tuning in. This is Paula Pant and I will catch you in the next episode.