When you think of financial well-being, perhaps you think about having enough money in the bank for retirement or a stable job that gives you a regular paycheck. Or maybe it’s just being able to cover your expenses and save a little each month. Each of those examples are ways of calibrating financial well-being.
I would like to suggest a new way to define financial well-being that focuses on the psychology of happiness. Happiness comes from a variety of sources, including the ability to create and enjoy memories and experiences.
I propose that as part of building financial well-being that we carve out some of our finances to fill our lives with more of those things we so enjoy.
When it comes to money, most of us like to think about how we are going to spend it. When the paycheck arrives, we first think about what bills we need to pay, what we want to buy, and—hopefully—what we plan to save or donate to charity. One thing many of us do not think about is how we might use our money to create more happiness in our lives by investing in gratifying life experiences. Though these experiences are often intangible, they can be appreciated for a lifetime.
In one study published in the Journal of Positive Psychology, researchers from San Francisco State University found that before making a purchase, people stated that they knew that a life experience would bring them more happiness, but that they thought it would make more financial sense to buy the material item. However, the researchers also found that the same individuals’ opinions changed after they made the purchase. Most of the participants said that they realized the life experience would have made them happier and also had better financial value.
It may not seem like it when you’re passing by the department store window, but when it comes to long-term happiness, life experiences instill the greatest memories and bring the greatest joy.
Making memories with your family and friends is a great way to connect."
Some of my favorite memories come from experiences such as the day at the theme park with my children and their look of pride when they finally went on the big roller coaster; or the time we went on a progressive dinner and ate an appetizer at one restaurant, a main course at another and dessert at a third!
In my private practice, I have heard time and time again from clients how important and lasting life experiences have been to their happiness. I had a client, Sharon, who was experiencing some marital difficulties and considerable financial stress. Her husband had ruined their family financially, which left her in an extremely bad situation. She ultimately became a single mom and had to rebuild her life.
She also needed to take care of herself on an emotional level. She found joy in baking and enjoyed spending that quality time with her children. She carved out money each month to shop for unique ingredients and decorations while her kids bragged that their family owned 52 kinds of sprinkles! Though the sprinkles may qualify as “things,” they were merely an add-on to the incredible shared experience and wonderful memories of baking that my client was giving to her daughters.
The goal here is not to go out and buy the most sprinkles in the neighborhood or to spend money at a theme park. The goal is to put aside some money every month for the set purpose of creating memories that can move you and the people that you care about into an emotionally positive place—creating lasting memories along the way. This effort toward my version of financial well-being involves creating experiences that aren’t routine; they are about doing something special.
Swim with the dolphins, travel, take up a new hobby, bake five different kinds of unusual cookies and share them with your favorite neighbors.
Take tons of pictures and make memory books, absorb the sights, smells and tastes of something new. When I am doing these activities, I tell myself to take pictures with my eyes. What I mean by that is that I will take a moment to focus on what I am seeing or doing, and I try to take in what it looks like, feels like, smells like so that I can remember as much as I can when I recall the experience.
Making memories with your family and friends is a great way to connect. You can continue that bond by talking about the shared experience far into the future. Another tip: Make sure to include all of the participants in the planning, because often the anticipation and organizing of the activity is part of the joy and fun. That said, making memories can be unplanned as well. Sometimes a spontaneous trip to the beach with a picnic lunch from your favorite sandwich place or a quick surprise night away can be perfect happy memory makers!
So, the next time you get that paycheck, or some money lands in your lap, see if you can set aside a little spending money that will enhance your financial as well as emotional well-being, and go make some memories.