Power Trip
The Mindset That Makes You Better With Money
Just thinking of yourself as powerful helps you make better financial decisions
It’s easy to feel like you don’t have much control over money, at least when it comes to the big-picture things. Sure, you’d love a larger income, but your salary is what it is, and you can only negotiate so much. Or you’d like cheaper rent, but you live in a city where demand for housing is high. If anything, most of us feel the exact opposite of control when it comes to money: Our day-to-day lives are forever dictated by our financial ones.
Yet research suggests that a sense of control is critical to your financial well-being. In a 2014 study out of Stanford, researchers found that simply feeling more powerful led people to make better saving decisions. To get study participants in the right mindset, researchers put some subjects in a room where they sat in a tall chair (these people were dubbed the “leaders”) and others in a different room where the only seating option was a low ottoman (these were the “followers”). The researchers then asked both groups how much money they wanted to save. The leaders were willing to save between 34 and 42 percent of their income, while the followers saved only between 13 and 18 percent of theirs.
