Money affects all areas of our lives - health, job, enjoyment, relationships. If we have a positive relationship with money, all of these things are best placed to thrive. While budgets and spreadsheets can help, only when we understand how our emotions affect our spending, saving and financial outlook, can we truly make the most from our money. This means truly understanding the things that makes us happy, so we can spend more on them, and less on what is having a neutral or negative effect on our lives.

In the World Happiness Report 2019 the top countries tend to have high values for most of the key variables that have been found to support well-being: income, healthy life expectancy, social support, freedom, trust and generosity. The UK currently ranks 15th - we need to try harder!

Getting going

The traditional view of saving requires giving up things you love, but the place to start is the money that just evaporates from your account every month. You can ignore your rent and utility bills and can come back to those later. First have a look at the casual contactless taps, things you buy out of daily habit, the comfort buys after a long day, alcohol-influenced late night purchases,. Some of the things you identify will feel important parts of your life, but add them all up and if you’re feeling brave, calculate how much of your money that is going missing over a year.

Have you ever considered the difference between happiness and pleasure?

Here’s a little bit of science. The pleasure we get from casual spending on things we want, rather than truly value, is short-lived. They give us a chemical rush that rapidly fades. If we’re honest with ourselves, many are things we could live without. Whether we view them at the time (or with hindsight) as happy spends, or spends we are likely to regret, the challenge is to turn them into happy saves - which feels as good, if not better, than spending it!

Turning sad spends into happy saves

This means, cutting down or cutting out the spends that don’t provide happiness and banking the money you save into a savings pot - and feeling great about it.

Every time you think about spending some money, ask yourself, will the pleasure it temporarily provides outweigh the positive kick you get from saving and banking the money? Over a short-period of time, you will begin to identify the things that you feel are important to you, and those you can do without.

In addition to pleasurable spends that turn out to not make you happy, there are avoidable spends that arise from poor planning or lack of foresight - not checking the time of the last train home and getting a taxi, forgetting to prepare your lunch the night before and bringing it into work. As you develop your ability to think about money these situations will arise less and less.

OK, but it will takes ages to amount to a decent amount of cash

Some things will be easier than others to cut from your spending. But once you catch the saving bug and enjoy the same chemical rush you got from spending, you will want to increase your saving. There is always more to be found if you look a little deeper. Think about the things you buy in relation to where you are in life now and how you would like it to be. That might be a greater sense of control and financial freedom or things you aspire to in the medium to long term. Perhaps owning a house, starting a family or a bucket list experience. Look at what you spend in relation to these things. It’s easy to think it’s just a few quid, so why bother? Think of every pound as a small part of the things you truly value. Every happy save will immediately contribute to your peace of mind and one day translate to quality time spent on holiday, a brick in your new house, a treat for your baby.

Remember, there are no right or wrong answers. It’s about knowing what makes you happy - the good spends. The challenge is, differentiating between what makes you happy and what only gives you short-term pleasure. It’s easy to get sucked back into mindless spending, so check in with yourself from time to time, look at where your money is going and ask yourself, why, why, why?

Spend Happy. Save Happy. Live Happy.