Dr. Heidi Grant

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5 Easy Tips for Spending Less

January 12, 2011 by Heidi Grant Leave a Comment

Everyone knows that if you want to get your finances in order and start being smart about your financial future, you need to make a financial plan.  And there is lots of terrific advice out there from personal finance experts on what should go into that plan. But knowing how to stick to your plan, whatever it might be, is the really critical part of the puzzle, and it’s the part we pay the least attention to.  Understanding how to stick to a plan once you’ve made it isn’t a financial issue, it’s a motivational one.  Luckily, there are very effective strategies you can use to make sure you follow through on your good financial intentions.

Tip #1: Be very specific about what you want to achieve.  “Saving money each month” sounds like a good step, but how much money?  “Pay off credit card debt” is a great idea, but how quickly?  How much will you pay, and on which cards?  When the steps in our plans are vague, like “spend less here” or “save more there,” there is way too much wiggle room.  We find ourselves settling for very small changes in the right direction, when actually, people are much more motivated when working toward challenging goals.  Be specific, and set the bar high.

Tip #2: You need to make sure that your plan includes concrete actions you are going to take in order to reach your financial goals.  Turn “spend less money eating out” into  “I’ll bring lunch with me to work each day, and eat out no more than once a week.”  One of the most common reasons we fail to reach our goals and stick to our plans is that we don’t translate what we want to accomplish into real, everyday behavior.  “Cut down on my clothing expenses” needs to become “spend no more than $____ on clothes each month,” or you’ll never succeed in making real change.

Tips #3-5: Most of us are guilty of buying things we don’t really need.  If your finances are in a sorry state, you will definitely need to get a handle on your impulse buying, and fast.    Out-of-control spending is just another example of succumbing to temptation – for some of us it’s doughnuts or chocolates, for others it’s gadgets and designer shoes.   Tips #3-5 are simple strategies you can use to help you resist the temptation to spend.

Tip #3: Never, ever shop as a pick-me-up.  When you are tired, anxious, stressed, or depressed, your self-control will be at its weakest.  This is a perfect recipe for a bad decision.

Tip #4: When you are faced with the temptation to splurge, it can help if you stop and think about someone you know who has lots of self-control – someone who is financially responsible. Self-control is actually contagious, and studies show that just thinking about someone who has it can boost your own.

Tip #5: Finally, reward yourself for good behavior.  Everyone needs incentives.  When you have a fiscally responsible week, or month, treat yourself to something you want that won’t totally blow your budget.   For some of us, there just isn’t enough inherent satisfaction in being frugal to keep you motivated, so reward yourself with something that speaks to you.

When Optimists Marry Pessimists

January 10, 2011 by Heidi Grant Leave a Comment

How to understand and appreciate what motivates your partner, and stop fighting over which one of you is really right.

It can be very frustrating when two people who love each other find that they don’t speak the same motivational language. I have met many, many married couples who are fortunate enough to share common goals, but don’t necessarily see those goals in the same way.

It’s particularly common for one person in the relationship to have what psychologists call a promotion focus, meaning that they tend to see their world and their goals in terms of what they can gain, while the other person has more of a prevention focus, seeing their world and goals in terms of what they stand to lose.  In other words, one half of the couple sees success as being about achievement, aspirations, reaching for the stars and being your best, while the other defines success as fulfilling your obligations, avoiding danger and mistakes, and being the kind of person others can really count on.

In my new book, SUCCEED: How We Can Reach Our Goals, I spend a lot of time focusing on this difference because it affects so much about how we think, feel, and what motivates us.  Promotion-minded people are usually optimists – thinking about what can be gained in any situation helps them to more comfortably embrace risk, and they are motivated by confidence and praise.  They work quickly, creatively, and they take chances.  They make lots of mistakes (relative to the prevention-minded, that is), but never miss an opportunity to win big.

Prevention-minded people are more realistic, even pessimistic – thinking about what they might lose in any situation makes them want to avoid risk like the plague, always choosing the bird in the hand over two in the bush.  They are, in fact, more motivated and energized by criticism than by praise (which they often don’t trust).  There’s nothing like the possibility of failure to get their motivational juices flowing.  They work deliberately, carefully, and accurately.  They plan ahead, and rarely procrastinate.  They may not seize every opportunity, but they are far better at avoiding disaster.

Married couples often waste a lot of energy, and create a lot of unnecessary animosity in their relationship, arguing over which person is seeing things the “right” way.  (Early in our marriage, my husband and I were constantly butting heads when it came to our toddlers’ budding ability to walk.  He wanted to give them opportunities to climb and explore, while I wanted to wrap them in bubble wrap from head to toe and make them wear helmets on the staircase.   You can easily guess which one of us is promotion-minded, and which one is all about prevention.)

Once you realize that you and your partner simply approach your goals differently, the good news is that you can stop fighting over who is right.  You can more easily see what is valuable about your partner’s viewpoint, appreciate what they are bringing to the table, and start speaking to each other in one another’s motivational language. The very best partnerships strike a balance between promotion and prevention, since both are necessary for living a healthy, satisfying life.  Between the two of you, you’ll make sure that your family has adventures and new experiences, while also making sure the kids have clean underwear and the bills get paid.

Follow me on Twitter @hghalvorson.

The Top 10 Psychology Studies of 2010

December 21, 2010 by Heidi Grant Leave a Comment

The end of 2010 fast approaches, and I’m thrilled to have been asked by the editors of Psychology Today to write about the Top 10 psychology studies of the year.  I’ve focused on studies that I personally feel stand out, not only as examples of great science, but even more importantly, as examples of how the science of psychology can improve our lives.  Each study has a clear “take home” message, offering the reader an insight or a simple strategy they can use to reach their goals, strengthen their relationships, make better decisions, or become happier.   If you extract the wisdom from these ten studies and apply them in your own life, 2011 just might be a very good year.

1)  How to Break Bad Habits

If you are trying to stop smoking, swearing, or chewing your nails, you have probably tried the strategy of distracting yourself – taking your mind off whatever it is you are trying not to do – to break the habit.  You may also have realized by now that it doesn’t work.  Distraction is a great way to resist a passing temptation, but it turns out to be a terrible way to break a habit that has really taken hold.

That’s because habit-behaviors happen automatically – often, without our awareness.  So thinking about George Clooney isn’t going to stop me from biting my nails if I don’t realize I’m doing it in the first place.

What you need to do instead is focus on stopping the behavior before it starts (or, as psychologists tend to put it, you need to “inhibit” your bad behavior).  According to research by Jeffrey Quinn and his colleagues, the most effective strategy for breaking a bad habit is vigilant monitoring – focusing your attention on the unwanted behavior to make sure you don’t engage in it.  In other words, thinking to yourself “Don’t do it!” and watching out for slipups – the very opposite of distraction.   If you stick with it, the use of this strategy can inhibit the behavior completely over time, and you can be free of your bad habit for good.

J. Quinn, A. Pascoe, W. Wood, & D. Neal (2010) Can’t control yourself? Monitor those bad habits.   Personality and Social Psychology Bulletin, 36, 499-511.

2) How to Make Everything Seem Easier

Most of us have grown accustomed to the idea that our moods, and even our judgments, can be influenced by unrelated experiences of sight and sound – we feel happier on sunny days, more relaxed when listening to certain kinds of music, and more likely to lose our tempers when it’s hot and humid.  But very few of us have even considered the possibility that our tactile experience – the sensations associated with the things we touch, might have this same power.

New research by Joshua Ackerman, Christopher Nocera, and John Bargh shows that the weight, texture, and hardness of the things we touch are, in fact, unconsciously factored into our decisions about things that have nothing to do with what we are touching.

For instance, we associate smoothness and roughness with ease and difficulty, respectively, as in expressions like “smooth sailing,” and “rough road ahead.” In one study, people who completed a puzzle with pieces that had been covered in sandpaper later described an interaction between two other individuals as more difficult and awkward than those whose puzzles had been smooth. (Tip:  Never try to buy a car or negotiate a raise while wearing a wool sweater.  Consider satin underpants instead.  Everything seems easy in satin underpants.)

J. Ackerman, C. Nocera, and J. Bargh (2010)  Incidental haptic sensations influence social judgments and decisions.  Science, 328, 1712- 1715.

3)  How To Manage Your Time Better

Good time management starts with figuring out what tasks you need to accomplish, and how long each will take.  The problem is, human beings are generally pretty lousy when it comes to estimating the time they will need to complete any task.  Psychologists refer to this as the planning fallacy, and it has the very real potential to screw up our plans and keep us from reaching our goals.

New research by Mario Weick and Ana Guinote shows that, somewhat ironically, people in positions of power are particularly poor planners.  That’s because feeling powerful tends to focus us on getting what we want, ignoring the potential obstacles that stand in our way.   The future plans of powerful people often involve “best-case scenarios,” which lead to far shorter time estimates than more realistic plans that take into account what might go wrong.

The good news is, you can learn to more accurately predict how long something will take and become a better planner, if you stop and consider potential obstacles, along with two other factors:  your own past experiences (i.e., how long did it take last time?), and all the steps or subcomponents that make up the task  (i.e., factoring in the time you’ll need for each part.)

M. Weick & A. Guinote (2010) How long will it take? Power biases time predictions. Journal of Experimental Social Psychology.

4) How to Be Happier

Most of us tend to think that if we just had a bit more money we’d get more satisfaction out of life, but on the whole, this turns out not to be true.   So why doesn’t money make us happier?  New research by Jordi Quoidbach and colleagues suggests that the answer lies, at least in part, in how wealthier people lose touch with their ability to savor life’s pleasures.

Savoring is a way of increasing and prolonging our positive experiences.  Taking time to experience the subtle flavors in a piece of dark chocolate, imaging the fun you’ll have on an upcoming vacation (and leafing through your trip photos afterward), telling all your friends on Facebook about the hilarious movie you saw over the weekend – these are all acts of savoring, and they help us to squeeze every bit of joy out of the good things that happen to us.

Why, then, don’t wealthier people savor, if it feels so good?  It’s obviously not for a lack of things to savor.  The basic idea is that when you have the money to eat at fancy restaurants every night and buy designer clothes from chic boutiques, those experiences diminish the enjoyment you get out of the simpler, more everyday pleasures, like the smell of a steak sizzling on your backyard grill, or the bargain you got on the sweet little sundress from Target.

Create plans for how to inject more savoring into each day, and you will increase your happiness and well-being much more than (or even despite) your growing riches.  And if you’re riches aren’t actually growing, then savoring is still a great way to truly appreciate what you do have.

J. Quoidbach, E. Dunn, K. Petrides, & M. Mikolajczak (2010) Money giveth, money taketh away: The dual effect of wealth on happiness.  Psychological Science, 21, 759-763.

5) How to Have More Willpower

Do you have the willpower to get the job done, or have you found yourself giving in to temptations, distractions, and inaction when trying to reach your own goals?   If it’s the latter, you’re not alone.  But more importantly, you can do something about it.  New research by Mark Muraven shows that our capacity for self-control is surprisingly like a muscle that can be strengthened by regular exercise.

Do you have a sweet tooth?  Try giving up candy, even if weight-loss and cavity-prevention are not your goals.  Hate exerting yourself physically?  Go out and buy one of those handgrips you see the muscle men with at the gym – even if your goal is to pay your bills on time.  In one study, after two weeks of sweets-abstinence and handgripping, Muraven found that participants had significantly improved on a difficult concentration task that required lots of self-control.

Just by working your willpower muscle regularly, engaging in simple actions that require small amounts of self-control – like sitting up straight or making your bed each day – you can develop the self-control strength you’ll need to tackle all of your goals.

M. Muraven (2010) Building self-control strength: Practicing self-control leads to improved self-control performance.  Journal of Experimental Social Psychology, 46, 465-468.

6) How to Choose a Mate

What role does personality play in creating marital bliss? More specifically, is it your personality, your partner’s personality, or the similarity between the two that really matters when it comes to being happy in your marriage? A study of over 10,000 couples from three countries provides us with some answers.

Your own personality is in fact a powerful predictor of your marital satisfaction.  People who were more agreeable, conscientious, and emotionally stable reported being significantly happier with their spouse.  That spouse’s personality was also a reliable, though slightly less powerful, predictor of relationship satisfaction.  Keep these same traits – the “Big 3” for happiness in a marriage – in mind when you are seeking Mr. or Ms. Right.

Finally, there’s personality similarly – which, as it happens, doesn’t seem to matter at all. The extent to which married couples matched one another on the Big Five traits had no predictive power when it came to understanding why some couples are happy together and others not.   This is not to say that having similar goals or values isn’t important – just that having similar personalities doesn’t seem to be.

So if you are outgoing and your partner is shy, or if you are adventurous and your partner doesn’t really like to try new things, it doesn’t mean you can’t have a satisfying marriage.  Whether you are birds of a feather, or opposites that attracted, you are equally likely to live a long and happy life together.

Just try to be generally pleasant, responsible, and even-tempered, and find someone willing to do the same.

P. Dyrenforth, D. Kashy, M.B. Donnellan,  & R. Lucas  (2010) Predicting relationships and life satisfaction from personality in nationally representative samples from three countries: The relative importance of actor, partner, and similarity effects.  Journal of Personality and Social Psychology, 99, 690-702.

7) How to Feel More Powerful

In the animal kingdom, alphas signal their dominance through body movement and posture.  Human beings are no different.  The most powerful guy in the room is usually the one whose physical movements are most expansive – legs apart, leaning forward, arms spread wide while he gestures.  He’s the CEO who isn’t afraid to swing his feet up onto the conference room table, hands behind his head and elbows jutting outward, confident in his power to spread himself out however he damn well pleases.

The nervous, powerless person holds himself very differently – he makes himself physically as small as possible: shoulders hunched, feet together, hands in his lap or arms wrapped protectively across his chest.  He’s the guy in the corner who is hoping he won’t be called on, and often is barely noticed.

We adopt these poses unconsciously, and they are perceived (also unconsciously) by others as indictors of our status.  But a new set of studies by Dana Carney, Amy Cuddy, and Andy Yap reveals that the relationship between power and posing works in both directions.  In other words, holding powerful poses can actually make you more powerful.

In their studies, posing in “high power” positions not only created psychological and behavioral changes typically associated with powerful people, it created physiological changes characteristic of the powerful as well.   High power posers felt more powerful, were more willing to take risks, and experienced significant increases in testosterone along with decreases in cortisol (the body’s chemical response to stress.)

If you want more power – not just the appearance of power, but the genuine feeling of power – then spread your limbs wide, stand up straight, and lean into the conversation.   Carry yourself like the guy in charge, and in a matter of minutes your body will start to feel it, and you will start to believe it.

D. Carney, A. Cuddy, and A. Yap (2010) Power posing: Brief nonverbal displays affect neuroendocrine levels and risk tolerance.  Psychological Science, 21, 1363-1368.

8) How To Tell If He Loves You

“If he really loved me, then he would…”

Everyone who’s ever been in a relationship has had thoughts like this one.  If he loved me he would bring me flowers, or compliment me more often, or remember my birthday, or remember to take out the damn garbage.    We expect feelings of love to translate directly into loving behaviors, and often judge the quality and intensity of our partner’s feelings through their more tangible expressions.  When it comes to love, actions speak louder than words, right?

Well, not necessarily.  According to new research by psychologists Lara Kammrath and Johanna Peetz, romantic feelings like love, intimacy, and commitment reliably lead to some loving behaviors, but not others. In their studies, love predicted spontaneous, in-the-moment acts of kindness and generosity, like saying “I love you,” offering a back rub, or surprising your partner with a gourmet dinner – the kinds of loving actions that don’t require much in the way of forethought, planning, or memory.

On the other hand, love does a lousy job of predicting the kinds of “loving” behaviors that are harder to perform, often because they have to be maintained over longer periods of time (e.g., remembering to do household chores without being asked, being nice to one’s in-laws) or because there is a delay between the thought and the action (remembering to buy your wife a gift for her birthday next week, keeping a promise call home during your conference in Las Vegas.). When it comes to the harder stuff, it’s how conscientious you are, rather than how much in love you are, that really matters.

So if you’re trying to get a sense of how your partner really feels about you, the smaller, spontaneous acts of love that occur without much forethought are a much  better indicator of the depth of his love than whether or not he remembers your birthday or to take out the trash.

L. Kammrath & J. Peetz (2010) The limits of love: Predicting immediate vs. sustained caring behaviors in close relationships.  Journal of Experimental Social Psychology.

9) How to Make It Easier to Cut Your Losses

Sometimes, we don’t know when to throw in the towel.   As a project unfolds, it becomes clear that things aren’t working out as planned, that it will cost too much or take too long, or that someone else will beat you to the punch.  But instead of moving on to new opportunities, we continue to devote our time, energy, and money to doomed projects (or even doomed relationships), digging a deeper hole rather than trying to climb our way out of it.

Why?  The most likely culprit is our overwhelming aversion to sunk costs – the resources that we’ve put into an endeavor that we can’t get back out. We worry far too much about what we’ll lose if we just move on, and not nearly enough about the costs of not moving on  – more wasted time and effort, and more missed opportunities.

But thanks to recent research by Daniel Molden and Chin Ming Hui, there is a simple way to be sure you are making the best decisions when your endeavor goes awry:  focus on what you have to gain, rather than what you have to lose.

Psychologists call this adopting a promotion focus. When Molden and Hui had participants think about their goals in terms of potential gains, they became more comfortable with accepting the losses they had to incur along the way.  When they adopted a prevention focus, on the other hand, and thought about their goals in terms of what they could lose if they didn’t succeed, they were much more sensitive to sunk costs.

If you make a deliberate effort to refocus yourself prior to making your decision, reflecting on what you have to gain by cutting your losses now, you’ll find it much easier to make the right choice.

D. Molden & C. Hui (2010) Promoting de-escalation of commitment: A regulatory focus perspective on sunk costs.  Psychological Science.

10)  How to Fight With Your Spouse

Having a satisfying, healthy relationship with your partner doesn’t mean never fighting – it means learning to fight well. But what is the best way for two people to cope with their anger, frustration, and hurt, without undermining their mutual happiness?

Thankfully, recent research by James McNulty and Michelle Russell provides the answer.  The best way to deal with conflict in a marriage, it turns out, depends on how serious or severe the problem is.  Did your spouse drink too much at the party last night, or is he drinking too much every night?  Did she splurge a little too much on clothes last month, or are her spending habits edging you closer and closer to bankruptcy?  Did he invite his mother to dinner without discussing it with you first, or did he invite his mother to live with you without discussing it first?  Little problems and big problems require very different approaches if you want to have a lasting, happy marriage.

When it comes to minor problems, direct fighting strategies – like placing blame on your spouse for their actions or expressing your anger – results in a loss of marital satisfaction over time.   Flying off the handle when he forgets to pick up the dry cleaning yet again, or when she spends a little too much money on a pricey pair of shoes, is going to take its toll on your happiness in the long run.  You really are better off letting the small stuff go.

In response to major problems, these same direct fighting strategies predict increased marital satisfaction!   Expressing your feelings, blaming your partner and demanding that they change their ways will lead to greater happiness when the conflict in question is something significant – something that if left unresolved could ultimately tear your relationship apart.  Issues involving addiction, financial stability, infidelity, child-rearing, and whether or not you live with your mother-in-law need to be addressed, even if it gets a little ugly.  Couples who battle it out over serious issues do a better job of tackling, and eventually resolving those issues, than those who swept big problems under the carpet.

J. McNulty & V.M. Russell (2010) When “negative” behaviors are positive: A contextual analysis of the long-term effects of problem-solving behaviors on changes in relationship satisfaction. Journal of Personality and Social Psychology, 98, 587-604.

Permission to Make Mistakes Usually Means Fewer of Them

September 14, 2010 by Heidi Grant Leave a Comment

From my Fast Company blog:

If you have ever had to assign an employee a new project or task, you are no doubt familiar with the look of discomfort and anxiety such assignments often provoke.

While some people may be eager to tackle a new challenge, hoping it will help them to climb the corporate ladder, many workers are really just trying to survive without committing any major screw-ups.    Becoming responsible for something new and unfamiliar is understandably frightening.  The odds of making a mistake increase dramatically when you are inexperienced.  Small wonder that a “new” assignment is greeted with so little enthusiasm.

So how can we motivate employees to approach new responsibilities with confidence and energy?  The answer is simple, though perhaps a little surprising:  Give them permission to screw-up.

I know this may not be something you are thrilled to hear, because immediately you’re probably thinking, “If my employee screws up, I’m going to be the one who pays for it.”  But you needn’t worry about that, because studies show that when people feel they are allowed to make mistakes, they are significantly less likely to actually make them!  Let me explain.

People approach any task with one of two types of goals: what I call be-good goals, where the focus is on proving that you have a lot of ability and already know what you’re doing, and get-better goals, where the focus is on developing ability and learning to master a new skill.

The problem with be-good goals is that they tend to backfire when we are faced with something unfamiliar or difficult.  We quickly start feeling that we don’t actually know what we are doing, that we lack ability, and this creates a lot of anxiety.  Countless studies have shown that nothing interferes with performance quite like anxiety does – it is the productivity-killer.

Get-better goals, on the other hand, are practically bullet-proof.  When we think about what we are doing in terms of learning and mastering, accepting that we may make some mistakes along the way, we stay motivated despite the setbacks that might occur.

Just to give you an example, in one study I conducted a few years ago, I found that people in pursuit of be-good goals (i.e., trying to show how smart they already were) performed very poorly on a test of problem-solving when I made the test more difficult (either by interrupting them frequently, or by throwing in a few additional unsolvable problems).

The amazing thing was, the people who were pursuing get-better goals (i.e., who saw the test as an opportunity to learn a new problem-solving skill) were completely unaffected by any of my dirty tricks.  No matter how hard I made it, these participants stayed motivated and did well.

Usually, when managers assign a new task, they emphasize how important it is for the work to be done flawlessly, no matter how challenging it might be.  They make the focus all about being good, and the prospect becomes terrifying.

The irony is that the pressure from managers to be-good results in many more mistakes, and far inferior performance, than would a focus on getting-better.

How can you assign projects in a way that conveys the goal of getting-better?  It’s easy, actually. Here are the 3 steps:

Step 1: Acknowledge that the project is difficult and unfamiliar, and that you expect your employee will need some time to really get a handle on it.  They may make some mistakes, and that’s ok.

Step 2:  Remind your employee that you are there as a resource, to help them when they run into trouble.

Step 3: Let them know that you are confident they have what it takes to eventually master this new responsibility.

Remember, by giving your employee permission to not do everything perfectly from the start, and by acknowledging that there is a learning curve and that improvement takes time, you are taking the anxiety out of the situation.  And in so doing, you are not only increasing their motivation to succeed, but also dramatically reducing the chances that any mistakes will be made at all.

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