In a world obsessed with saving money (which is important), I propose we also focus on how we spend it. Rather than treating saving and spending as opposites, we can use our spending to cultivate real joy and lasting satisfaction. If the “don’t spend” message of frugality frustrates you, consider a different approach: purchases can increase happiness and, in some cases, even help you save in the long run.
How are saving and spending connected to happiness?
Aristotle argued that happiness is the purpose of life. That idea challenges the common notion that fulfillment comes only from hard work and stashing away money. While saving is essential for security and future goals, centering happiness alongside financial planning gives your money a clearer purpose. When you define what brings meaning to your work and life, you can align both saving and spending around goals that matter. Integrating joy into financial planning helps you stay motivated to save while enjoying the present.
What is intentional spending?
Intentional spending means making purchases that reflect your values and priorities, and that support activities that genuinely make you happy. Instead of buying on autopilot—downloading apps you never use, grabbing takeout every day, or accumulating subscriptions and trendy items that add clutter—evaluate whether an expense contributes to your well-being. This mindful approach reduces wasteful consumption, frees up space and money, and lets your financial decisions support a more meaningful life. Intentional spending isn’t about denying yourself; it’s about choosing what adds value.
What is the PERMA model?
PERMA is a framework developed by psychologist Dr. Martin Seligman. It stands for Positive emotions, Engagement, Relationships, Meaning and Accomplishment. These five domains, rooted in positive psychology, help explain how our choices—including financial choices—affect well-being. Applying PERMA to spending lets you evaluate purchases not only by price but by how they contribute to a fuller life. Here’s how each element can guide your money decisions:
- Positive emotions: Prioritize experiences or items that reliably produce joy, gratitude or satisfaction. Examples include tickets to a concert, a special meal shared with loved ones, or a hobby that lifts your mood.
- Engagement: Spend on activities that absorb and challenge you—classes, tools for a creative hobby, or courses that deepen skills. These investments often deliver long-term satisfaction beyond momentary pleasure.
- Relationships: Allocate money toward building and maintaining meaningful connections—hosting friends, planning affordable trips with family, or thoughtful gifts that strengthen bonds.
- Meaning: Choose purchases that align with your values or support causes larger than yourself. Spending to support a local business, volunteer activities, or purchases that reflect your beliefs can deepen a sense of purpose.
- Accomplishment: Invest in goals that foster achievement—contribute regularly to savings or retirement accounts, fund education or personal projects, and celebrate milestones that mark progress toward long-term objectives.
Using PERMA is not an excuse for impulsive spending. It’s a tool for deliberate choices that balance enjoyment today with financial stability tomorrow. Intentional spending guided by PERMA helps you spend less on things that don’t matter and more on the things that truly improve your life.
PERMA in action
To illustrate how PERMA can reshape financial habits, consider the example of Peter and Chelsea. By applying the model thoughtfully, they aligned their money with what mattered and increased their overall happiness.
- Positive emotions: The couple started investing in small daily pleasures—walking their kids to school and enjoying a favorite local coffee. These modest expenses improved their mornings and strengthened family bonds.
- Relationships: They began organizing monthly potlucks and making time for park outings with neighbors. These low-cost activities nurtured friendships and family connections while keeping costs down.
- Engagement: When Chelsea felt disengaged at work, she discussed new projects with her manager that matched her interests. The renewed engagement led to a raise and also inspired her to take up roller skating—a low-cost hobby that brought joy and social interaction.
- Meaning: Peter and Chelsea explored what parenthood truly meant to them and created “Family Adventure Thursdays,” a weekly ritual with inexpensive activities capped at $20 that created memorable experiences without breaking the bank.
- Accomplishment: They reassessed external pressures that had driven past spending decisions—upgrades and lifestyle comparisons—and reset their financial goals. They committed 15% of income to retirement savings and 5% to a travel fund. Peter launched a small swimming camp to combine his skills and earn extra income, while Chelsea pursued workplace training to advance her career.
Applying PERMA helped them reallocate money toward what brought lasting satisfaction. The result was a budget that reflected both well-being and financial priorities.
Should you use PERMA?
The PERMA model can serve as a practical framework to guide spending and saving decisions. Before building a budget or drafting a financial plan, consider how the five PERMA elements could boost your happiness and support your long-term goals. Integrating positive emotions, engagement, relationships, meaning and accomplishment into financial choices helps you allocate resources in ways that improve overall well-being without undermining financial security.
In short, intentional spending informed by PERMA doesn’t replace the need to save. Instead, it encourages a balanced approach: save for the future while directing some resources toward experiences and investments that enhance your life now. By shifting from a mindset of “just don’t spend” to one of purposeful spending, you can create a richer, more fulfilling life built on both financial health and genuine happiness.
Read more A Rich Life:
- Does money buy happiness?
- How to live a rich life
- What are money scripts? What’s yours?
- Investing Beyond the Numbers: Understanding financial flashpoints