Historically, financial planners have tended to focus more on strategies about how to earn or accumulate more money, grow and protect those assets, and perhaps figure out how much can be spent… but not necessarily to look at and give suggestions to clients about how that money should be spent.
Yet contrary to the conventional wisdom that “money can’t buy happiness”, a recent new book entitled “Happy Money” by researchers Elizabeth Dunn and Michael Norton suggests that there may be far more opportunity than we realize to derive greater happiness by changing the ways we spend our money. How we spend – on ourselves, and others – really does impact the enjoyment and emotional well-being we derive.
In fact, the research of “Happy Money” suggests that sometimes, the best things we can do to improve our happiness may lie in not trying to maximize our wealth, but instead focusing on experiential purchases (rather than “stuff” that appreciates in value), spending money to buy time, and even spending money to support family and relatives instead of ourselves (which may not be cost-effective, but can be remarkably happiness-effective!).
So hopefully, this review of some of the “Happy Money” research will give you ideas about how you can have these spending-happiness conversations with your own clients… and perhaps even reconsider some of the ways you do and don’t spend money for yourself in the coming year!
