Put Your Money Where Your Mind Is: Positive Emotions and Temporal Discounting

Financial stress is a widespread issue that has a profound impact on the ability to make sound financial decisions. People experiencing financial stress are generally more prone to temporal discounting: valuing immediate (monetary) outcomes more than future ones. This tendency can prolong the problematic financial situation. In this study, we developed and tested an intervention to help individuals in financial stress increase their focus on their future financial goals. Based on the broaden-and-build theory, which suggests that positive emotions facilitate attentional broadening, we induced either joy or hope in the participants. Our online survey was filled out by 324 UK-participants with varying degrees of financial stress. First, the participants filled in a questionnaire that measured their experienced financial stress. To induce positive emotions, the participants then wrote about personal experiences that either make them feel joy or hope. Finally, they made a series of...Show moreFinancial stress is a widespread issue that has a profound impact on the ability to make sound financial decisions. People experiencing financial stress are generally more prone to temporal discounting: valuing immediate (monetary) outcomes more than future ones. This tendency can prolong the problematic financial situation. In this study, we developed and tested an intervention to help individuals in financial stress increase their focus on their future financial goals. Based on the broaden-and-build theory, which suggests that positive emotions facilitate attentional broadening, we induced either joy or hope in the participants. Our online survey was filled out by 324 UK-participants with varying degrees of financial stress. First, the participants filled in a questionnaire that measured their experienced financial stress. To induce positive emotions, the participants then wrote about personal experiences that either make them feel joy or hope. Finally, they made a series of hypothetical financial decisions. Participants in the gains condition chose between receiving a small amount now, or a larger amount in the future. Participants in the losses condition decided between paying a sum now, or a larger amount later. We hypothesized that, compared to the control condition, temporal discounting would be lower in both the joy and hope condition (1); and that, compared to the control condition, the positive relationship between financial stress and temporal discounting would be weaker in both the joy and hope condition (2). Although our emotion manipulation was successful, linear regression analyses indicated that both hypotheses were not supported. First of all, financial stress and temporal discounting were not positively related in our sample. Additionally, inducing joy and hope did not lessen temporal discounting. We can conclude from this that further research is needed on how temporal discounting can be reduced.Show less

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Put Your Money Where Your Mind Is: Positive Emotions and Temporal Discounting