This One Financial Trick Lets You Buy Happiness
Conventional wisdom has it that, to be happy, we should make a certain amount of money, wear certain clothes, or buy a house in a particular neighborhood. There are so many "should-do's" out there that it's easy to lose sight of the fact that making money isn't the end goal. Money is a tool, a tool we can use to build a life that's best suited for each of our individual needs.
Everyone has different happiness triggers, though, and a surprising number of us spend a lot of money on products that detract from overall happiness. According to Mindy Crary, Financial Coach and Certified Financial Planner Practitioner in Seattle, WA, "Conscious spending is about being aware of what kind of spending makes you happy and what kind of spending doesn't make you happy so that you can make successful financial decisions."
So, how exactly can one gain financial clarity?
There's nothing sexy about the act of financial tracking, but the end result can be mind blowing. According to Crary, people are often astounded when they uncover how much they're spending in categories that really aren't that important to them.
People automatically spend a staggering amount on coffee, dinners out, clothing, or other items that don't necessarily enhance life satisfaction. "Once you have complete clarity about where your money is going," she says, "you start to make better choices automatically."
Change Your Mindset
People tend to view budgeting as a negative or in terms of what's being taken away from them. "We get into this unconscious cycle of buying what we think we're supposed to buy," says Crary. "We get into routines without really examining them."
According to the research, we're happiest when we spend our money on "restorative activities" like exercise, sleep, travel, and spending time with family and friends. Conversely, consumption based purchases like a bigger home or fancier car tend to detract from happiness.
According to Crary, it pays to think about the things that you'll gain by focusing your dollars in a direction that's really meaningful to you. "Conscious spending is about being more yourself and how being more yourself helps you save money," she says.
Make a Plan
Once you know what's truly important to you, it's easy to scale down on the things that are not. In other words, it's important to spend your money — so long as it's on things that increase your overall happiness. In her practice, Crary has seen people entirely change the way they live their lives. After assessing their spending patterns, clients have downsized homes, increased travel, and spent more time with family. Some have even given up their daily latte, although if that's what truly brings meaning to your life, by all means, keep buying it.
Ultimately, we often get caught up in a consumption treadmill and forget that we earn money to make our lives easier and more enjoyable. "Once people set up a plan, when they're really conscious, they're spending money to make themselves happy," says Crary. "Only once they're truly aware can they get the best piece of every dollar."
Are you a conscious spender? How do you control your spending?