Money as a Tool for Happiness Mindset
Stop budgeting for stuff. Start spending in ways that make life better.
Posted May 18, 2026 | Reviewed by Devon Frye
Imagine you’ve just received your cherished tax refund. You want to spend this money, yet the possibilities for deploying your newfound funds seem unlimited.
You could go the practical route and get new tires for your car, which you’ve been putting off. You could choose the fun option and take your romantic partner on a weekend getaway. There is also a strong case to be made for using the funds to chop down a pesky outstanding debt.
Which choice would you make? And which choice would still feel good a week after having made it?
Social science research provides an empirically backed framework for understanding the best return on investment spending when it comes to well-being. Here are five spending strategies that have been shown to help people improve their mood and their lives:
1: Spending on Experiences
Spending a little more money on experiences and a little less on material items is a strong spending principle backed by data. 1 Experiential purchases are things like trips, concerts, comedy shows, or amusement parks. Experiences cultivate pleasant memories for us to look back on, in addition to providing happiness in the moment. Three reasons that experiences provide happiness is because:
If you are someone who dislikes cleaning (guilty as charged), using money as a tool to avoid unpleasant chores and buy back time may be a good option for you. Although admittedly one of the more extravagant recommendations in this article, paying someone to complete undesirable tasks and buy back time can directly provide positive emotional benefits. 2
To maximize this tactic, do something fun that you’ve been meaning to do but simply haven’t carved out the time for. For example, if your lawn needs mowing, you could hire someone to complete this task for the afternoon and go to the cinema for the movie you’ve been meaning to see for the past month.
3: Spending on Others
Using money as a tool to treat your loved ones is the third tactic in your spending arsenal. Researchers found that spending money on other people (versus themselves) significantly increased well-being, although participants did not predict this beforehand. 3
While the benefits of this option are less tangible, relationships with our loved ones are invaluable. Using money as a tool to gift a loved one and make their day is an expenditure you’ll almost certainly never regret!
This tactic is an ode to the simple pleasure that peace of mind can buy you. With inflation and living expenses skyrocketing in the present economy, using money to tackle pesky debts or credit card balances cannot be left off this list. Using money as a tool to relieve stress and shift attention away from a scarcity mindset 4 is a fantastic option, especially if your finances are not where you want them to be.
This tactic also applies more broadly to fixes and upkeep. To bring back the example from the opening of the article, if the tires on your car were in such critical shape that you feel anxious every time you drive, spending money to replace the tires will buy you stress relief and perhaps even physical safety. While less fun than other tactics, do not overlook the power of money to buy emotional relief.
5: Identity Based Spending
Here comes a fun one: Spend money on things you personally love and identify with. This tactic is a Swiss Army knife in the sense that it will vary from person to person based on your own unique personality , interests, and hobbies. 5
If you love soccer, buy a jersey representing your favorite team. If you love cooking, book a cooking class with a top-tier chef in your area to learn from a professional. Really focus on the #1 hobby/interest that speaks to you, then find a way to spend money to feed this passion in a personally exciting way.
I hope this article has provided a new perspective for you when it comes to spending. The world is your oyster when it comes to spending money, and nobody is going to give you a playbook for how to spend.
Using money as a tool to design better days and cultivate relationships can provide a substantial boost to your happiness by taking a step back and asking, “What is this purchase really buying me?”
Gilovich, T., Kumar, A., & Jampol, L. (2015). A wonderful life: Experiential consumption and the pursuit of happiness. Journal of consumer psychology , 25 (1), 152-165.
Whillans, A. V., Dunn, E. W., Smeets, P., Bekkers, R., & Norton, M. I. (2017). Buying time promotes happiness. Proceedings of the National Academy of Sciences , 114 (32), 8523-8527.
Dunn, E. W., Aknin, L. B., & Norton, M. I. (2008). Spending money on others promotes happiness. Science , 319 (5870), 1687-1688.
Mullainathan, S., & Shafir, E. (2013). Scarcity: Why having too little means so much . Macmillan.
Matz, S. C., Gladstone, J. J., & Stillwell, D. (2016). Money buys happiness when spending fits our personality. Psychological science , 27 (5), 715-725.
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Max Alberhasky, Ph.D. , is an Assistant Professor of Marketing at California State University Long Beach. His research examines consumer psychology and the interplay between money, social relationships, and happiness.
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This article is part of the Bringwise Psychology Journal — daily insights on human behavior, mental health, and personal growth.