We've all been there: It’s early morning. You’re stuck in rush-hour traffic. You’re running late. And you need the strongest concoction that your coffee shop can brew.
Now imagine your surprise when you pull up to the window, and the barista says, “Your drink has been paid for by the customer before you. Would you like to keep the trend going?”
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Get started with a free financial assessment.
That’s exactly the situation that Carson Skinner, a 34-year-old graphic designer from Jacksonville, Fla., found himself in one Saturday morning. He said yes—and became the 22nd person in a row to pay it forward to the driver behind him.
"The odd thing is that, when I pulled up, I thought, 'Why don’t I pay for the person behind me?' " remembers Skinner. "Then the cashier informed me that someone earlier in line had started paying for the person behind. It’s not a foreign concept to me, but it brightened my day."
Most of us have, at some point, either paid it forward to someone else or benefited from the random kindness of a stranger. It’s a nice feeling—and one small act can truly turn your day around.
News Flash: Generosity Is Human Nature
David Rand, a researcher at Harvard University who will soon start a professorship in the psychology department at Yale University, has spent years studying human cooperation, as well as what drives us to pay costs that will benefit the greater good.
Rand's research revolves around reputation motivators, which are the conscious and subconscious mechanisms that encourage us to cooperate with others. "If you interact repeatedly with the same person or small group of people, you're likely to help them, so that they will help you in the future," Rand explains. And it's not just on a small scale. Rand adds that when we're interacting with huge groups, we're still inclined to cooperate because we never know who could be taking note.
Last fall, in conjunction with two other researchers, Rand asked 2,000 subjects to participate in a game—participants were given money, and then asked to decide whether they'd keep it for their own purposes or place the money in a pool to collectively benefit other people. The results? Most of the subjects chose to help fellow man before thinking to use the money for a selfish purpose.
“We explain the result as follows: In our daily lives, structural factors, like reputation, make cooperation a winning strategy, so we get used to cooperating most of the time,” says Rand. Translation: No one likes selfish people, so it makes sense to help others. Essentially, not only does paying it forward have an immediate monetary cost—like the price of a cup of coffee—but Rand explains that the overall cost you’re paying to help the greater good includes your time and effort.
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How Helping Others Actually Helps You
That’s not to say that the only reason we choose to pay it forward is for the reputation boost. Take, for instance, the story of Sherry Richert Belul, an inspirational book author and life coach based in San Francisco. She chose to celebrate her 48th birthday by completing 48 random acts of kindness within 48 hours—and most of the beneficiaries were strangers.
Richert Belul asked friends to pass along the names of people who could use a little encouragement, and then set about on her mission. She left voice mails of poetry. She sent a book to a recent divorcée. A teenager who had just lost his job received an iTunes gift card. In total, Richert Belul spent $150 of birthday gift money that she had received from family and friends during her pay-it-forward project—and gained an invaluable present for herself in the process.
“I realized how much unconditional love I could feel for people I didn’t know,” she says. “It changed my whole outlook on life. I realized that I don’t ever need to feel lonely or unloved—I don’t think I’ll ever be the same.”
You don't have to be a millionaire to incorporate giving into your financial plan.
Amy Jo Lauber, president of Lauber Financial Planning, has seen many clients find ways to increase (or retain) their net worth by taking advantage of tax deductions associated with philanthropic donations or planned gifts to family. Lauber also says that you don’t have to be a millionaire to incorporate giving into your financial plan—but she does believe that, in order to best enjoy your resources, you can’t be too attached to them.
“You can’t control the stock market. You can’t control inflation. You can’t control taxes. When people focus on those things, they tend to get anxious,” says Lauber. “But when you focus on the things you can control—how you earn your income, how you save it and how you protect it—part of that is choosing to share your money. It feels good to share. It’s a little thing that puts a smile on your face.”
For some people, giving and sharing happens to be a continuation of a lifelong legacy—it's something that's passed down from parent to child. This was certainly the case for Lindsay Livingston, a 28-year-old former dietetic intern at Ohio State University. Last year, she chose to put her own spin on her family’s tradition of giving back at Christmas by incorporating a philanthropic element into a six-week healthy living program that she coordinated through her internship.
Of all the daily challenges in Livingston's Elf 4 Health program, which included tasks tailored to healthy eating and wellness, the act of “paying it forward” proved to be one that all 900 participants were eager to complete. “Some paid for coffee in the drive-through, some left money at the vending machines for the next person, some helped people with groceries at the supermarket, and one even brought food to a new mom,” says Livingston.
Giving Is About More Than Just Money
Maybe you’d like to pay it forward more often, but your budget is stretched to the max. That’s OK—sometimes just an offer to help can leave a lasting impression. Walter Meyer, a 49-year-old writer in San Diego, vividly recalls an incident that took place around Christmas in 1984.
While driving home, he heard the telltale thump-thump-thump of a flat tire, and pulled off to the side of the road. He was shocked when not one, not two, but seven people stopped to offer assistance. “It actually turned this awful evening into a good one,” says Meyer. “I thought everyone in California was so rude and indifferent, and yet here were all these people stopping to see if they could help.”
Helping strangers can have material benefits—like showing your friends that you are a good person.
There are also the people who choose to pay it forward through their line of work. By day, 45-year-old Monique Littlejohn works as the development director for the Boys & Girls Club of Santa Barbara, Calif. By night, she’s busy crafting jewelry for her line, Gems of Intention. The side project isn’t all about money for her—in fact, for each piece of jewelry that she sells, Littlejohn donates another piece to nonprofit organizations for auctions and fund-raising efforts. This year, she has given away close to $2,000 worth of gift certificates and products.
Her sense of altruism stems from a past career as a marketing executive for an Internet startup that went under during the dot-com boom. “I was making a couple of people wealthy. At the same time, I felt like I was losing my soul to the process because we were selling air,” says Littlejohn. “I realized that I needed to make a difference in the world.”
And that, Rand would say, is the key philosophy behind much of his research on the idea of paying it forward—the sense that we’re all in this together.
While his expertise doesn't lie in the psychological effects of giving, Rand is able to speak to its other effects: “Helping strangers can have material benefits—like showing your friends that you are a good person, and creating a community where such cooperative behavior is the norm."