5 ways to spend money on your happiness

Can money buy happiness? It depends. In our research, we found that financial confidence and emotional confidence are intrinsically linked — but income isn’t the sole driver of financial confidence. Instead, proactive financial habits and a wealth of financial knowledge are more closely related to financial and emotional confidence, and they’re the key to increasing overall life satisfaction and well-being.¹

So, here are five ways you can spend your money to maximize your happiness.

Buy experiences

It’s a no-brainer. Spending on quality time with family and friends greatly increases our happiness. Experiences often provide more happiness than things because you can share them, making us more likely to feel connected to others. Instead of buying material goods you don’t need, plan a day trip with your family or attend a pasta-making class with some friends.

Treat yourself (sometimes)

Steering a steady financial course is a great approach, with occasional treats to reward yourself. But be careful not to indulge too frequently, as it may derail your expectations and happiness. Routinely setting aside money to create a splurge fund (a designated pool of money for fun purchases) within your means is a great way to make sure you get the joy of an experience or gift without getting into trouble.

Gift it away

Treating yourself is a great reward, but spending money on others can boost your happiness too. Consider buying gifts for loved ones or donating to charity.

Invest in your well-being

Financial, emotional, and physical wellness are all closely related.² This means that spending to make sure your mental and physical wellness are taken care of can be a good investment in yourself. Whether it’s looking into therapy or spending on fitness programs you enjoy, make sure you’re taking care of both your mental and physical wellness as part of your overall well-being.

Ask for help

Freedom from worry may be the biggest gift you can give yourself and your loved ones. While 70% of Americans have formulated some kind of financial strategy, only 43% have a clear financial objective. On the other hand, those who work with a financial professional tend to have a written, comprehensive financial strategy, leading to greater financial and emotional confidence.³

Reaching out to a financial professional is a great way to get personalized help and craft a concrete plan to incorporate these healthy spending habits into your life. While happiness may not sit on a store shelf with a price tag, these five tips can make your days a little brighter.