Should you save for your future or spend on enjoying life now? While money cannot buy you happiness, a recent survey by insurer Aviva reveals that being in control of your finances does. In fact, 57% of Americans have less than $1,000 in their current savings. However, financial awareness has led to a 47% increase in millennials with $15,000 or more in savings since 2015, according to a GoBankingRates survey.
Living without a budget can be compared to traveling across the planet without a roadmap – or a plan for that matter. While it is still possible to achieve, the result can end up wasteful and expensive. So, can people improve their finances as a means to boost overall happiness? Experts say yes.
Buy Experiences, Not New TVs
Retail therapy might seem like a great option if you’re spending to boost your mood. However, spending on experiences is more likely to boost mental happiness overall. Even if you want that new smartphone that everybody seems to have, experts suggest the thrill of making the purchase will pass sooner than you expect.
Staying In Control Of Your Debt
For many people, having some sort of debt is normal and allows them to enjoy a fantastic quality of life. But the key is to be in control of your outgoing payments, to avoid any stress. From time to time, it makes sense to re-evaluate your financial commitments and look at refinancing or consolidating your payments. By finding a more favourable APR or changing the length of your repayment plan, you can stay on top of your finances. Taking control in such a way allows you to relax, safe in the knowledge that you can afford your current lifestyle.
Making Smarter Decisions
The key to financial happiness is to give yourself permission in what you choose to spend along with where to put your savings. These conditions can help you decide on the necessities before the essentials, including:
- Basic financial needs are covered
- Savings of at least six months’ worth of expenses for an emergency fund
- Savings for retirement
- Funds for experiences, not materials
Instead of buying “things” that will provide temporary happiness, buy memories that will last a lifetime. After all, studies have shown that paying for experiences like travel and hobbies tend to make people happier than buying material things.
Focus on spending your valuable time with friends and family and deepen those relationships. Money can’t buy happiness, but it can sure help you spend more time with loved ones who make you happy.