6 Tips for How to Manage Money for Happiness

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Editor's Note: This story originally appeared on NewRetirement.

Contrary to popular belief, managing your financial life is not usually all about mathematical formulas and achieving a certain dollar value at some future period of time.

The goal of money is to enable you to live the life you want to live – today and into the future. You want to manage your money for happiness.

It is easy to get caught up in the nitty-gritty details of investment strategies, interest rates, budgets, arbitration strategies, and getting to $X million by the time you are a certain age.

However, it may be useful to always remember WHY you manage your money for financial goals: a satisfying, fulfilling life and happiness.

Here are tips for how to manage your money for happiness.

1. Budget, but Focus on Prioritizing What You Love

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Budgeting is a word that often elicits a grimace. Very few people love budgeting. Why? People too often think of it as an exercise that imposes limits on spending.

However, budgeting – knowing how your money is spent – is a foundational of financial wellness. And, if you reframe your perspective, budgeting can actually enable you spend on what truly makes you happy.

The best budgets are the ones that prioritize spending on what you love. When budgeting, try starting with your number one priority for spending and then compromises you need to make might not feel quite so onerous.

Use the NewRetirement Planner to document your budget today and how it will evolve into your future.

2. Stop the Negative Self Talk

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There is a lot of guilt, shame, worry, and regret around money. These negative emotions are too often present in our internal dialogue.

Stopping negative self-talk about money is essential for promoting a healthy and positive mindset toward your financial situation.

The following are strategies to help you address and overcome negative self-talk.

Awareness and Recognition

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Start by becoming aware of your negative self-talk patterns related to money. Recognize when negative self-talk arises and the impact it has on your emotions and actions.

Challenge Negative Beliefs

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Question the validity of negative beliefs or statements you make about money. Ask yourself if there is evidence to support these beliefs or if they are based on assumptions or fears.

Practice Positive Affirmations

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Replace negative self-talk with positive affirmations about money. Create and repeat affirmations that focus on abundance, financial empowerment, and positive beliefs about your ability to manage money effectively.

For example, repeat statements like “I am capable of managing my finances wisely” or “I attract financial opportunities and abundance into my life.”

Surround Yourself With Positive Influences

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Seek out positive influences and resources related to money management. Read books, listen to podcasts, or follow individuals or organizations that promote positive and empowering messages about personal finance.

Surrounding yourself with positive information and supportive communities can help counteract negative self-talk.

Celebrate Financial Wins

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Acknowledge and celebrate your financial achievements, no matter how small they may seem.

Celebrating milestones and progress reinforces positive self-talk and boosts confidence in your financial capabilities.

Take Action and Gain Financial Literacy

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Empower yourself by taking action and gaining financial literacy. Educate yourself about personal finance, budgeting, investing, and money management.

The more knowledge and control you have over your financial situation, the more confident and positive you’ll feel.

3. Focus on Your Financial Strengths

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“You cannot be anything you want to be, but you can be a whole lot more of who you already are.” – Curt Liesveld

There are two approaches to self-improvement, you can try to improve on your weaknesses or you can focus and expand on your strengths. Martin Seligman, the father of the field of Positive Psychology says that for a person to be truly happy and live a meaningful life, that person must recognize their personal strengths and use these strengths for the greater good.

Conventional wisdom has always been that your weaknesses represent the biggest opportunity for improvement. The problem is that this focus can create a negative feedback loop where fear, inadequacy, and anxiety are the focus.

Whereas concentrating on your natural strengths may be a more motivating, impactful, and happier approach to self-improvement.

Scientific American cites data illustrating this point: “Some researchers have tested programs called ‘positive interventions‘ that give people the chance to uncover, explore, and practice their strengths.”

“In one such program, people take a test to identify their top five character strengths, and then are tasked with using these strengths in a new and different way every day for a week. Researchers found that people who practiced their strengths in this way were happier and less depressed six months later.”

Try a SWOT Analysis To Identify Your Financial Strengths and Weaknesses

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Instead of spending time criticizing yourself, try to take an objective approach to understanding your personal journey. Performing a SWOT Analysis is a great way to retrain the way you think about yourself.

  • S – Strengths: List areas in which you excel financially. Do you work hard? Maintain positive cash flow? Actively learn? What areas of personal finance do you find rewarding? If you are not sure, think about what you are proud of when it comes to money. Leverage your strengths to your advantage. For example, if you have a stable income, consider how you can maximize savings or invest for long-term growth.
  • W – Weaknesses: What gives you anxiety? Which financial tasks do you consistently avoid or put off until the last minute? Address weaknesses systematically. Create a plan to reduce debt, develop a savings strategy, educate yourself on personal finance, or seek professional guidance where necessary.
  • O – Opportunities: Identify potential opportunities for growth or improvement in your financial situation. These may include new income sources, investment opportunities, promotions, or cost-saving measures. Assess and prioritize these opportunities based on feasibility and potential impact. Consider how you can leverage these opportunities to enhance your financial well-being.
  • T – Threats: Identify potential threats or challenges that may hinder your financial progress. These could include job instability, economic downturns, unexpected expenses, or inadequate insurance coverage. Develop strategies to mitigate or prepare for these threats. For instance, consider building an emergency fund, obtaining appropriate insurance coverage, or exploring alternative income sources.

4. Make Sure You Develop a Practice Around the Habits That Breed Happiness

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The following are practices that are scientifically proven to breed happiness.


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Practicing gratitude cultivates happiness by shifting focus towards appreciating and acknowledging the positive aspects of life, fostering contentment and satisfaction.

And, a grateful mindset with regard to your financial situation can shift your mindset from scarcity to abundance.


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Experiencing awe, whether through nature, art, or extraordinary moments, brings a sense of wonder and expands our perspective, leading to increased happiness and a greater appreciation for life’s beauty and possibilities.

Awe can help inform your financial priorities.


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Engaging in enjoyable and lighthearted activities promotes happiness by providing moments of pleasure, relaxation, and rejuvenation, allowing us to experience joy and a sense of playfulness.

Fun is another way to inform what is important to you and how you want to be spending your time and money.


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Cultivating mindfulness allows us to fully engage with the present moment, heightening our awareness and deepening our connection to our surroundings and ourselves, leading to greater contentment and happiness.

Mindful financial decision-making helps us make conscious choices aligned with our values, avoid impulsive spending, and reduce financial stress by focusing on the present moment rather than worrying about the future.


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Nurturing meaningful connections with others promotes happiness by fostering a sense of belonging, support, and shared experiences, providing opportunities for love, compassion, and personal growth.

Connection fosters a sense of belonging and shared experiences, enhancing financial well-being.


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Having a sense of purpose, whether through meaningful work, personal goals, or contribution to others, brings a deep sense of fulfillment and happiness, as it gives our lives direction and meaning beyond ourselves.

Understanding the purpose behind our money, whether it’s providing security for our family, supporting causes we care about, or pursuing personal aspirations, brings greater fulfillment and motivation to manage our finances responsibly.


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When we believe that our actions and choices can influence our circumstances, we feel more in charge of our own destiny, leading to a greater sense of satisfaction and happiness.

5. Stop Comparing Your Situation to Others

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Comparing your financial situation to others can sometimes be motivating and informative. There are useful benchmarks that can orient your goals. However, comparisons can also negatively impact your happiness. It is important to remember that comparisons are:

  1. Subjective: Financial comparisons often involve comparing different life circumstances, backgrounds, and opportunities. Each person’s financial journey is unique, influenced by various factors such as education, career path, family support, or economic conditions. Comparing yourself to others may lead to unfair or inaccurate judgments, creating feelings of inadequacy or dissatisfaction.
  2. Illusory: Comparisons tend to focus on external markers of success, such as material possessions or income levels. However, true happiness and fulfillment come from within and are influenced by personal values, relationships, experiences, and overall well-being. By solely comparing financial aspects, you may overlook or undervalue other crucial aspects of your life that contribute to genuine happiness.
  3. Unhealthy: Constantly comparing your financial situation to others can fuel a sense of competition or envy. This mindset can lead to a never-ending cycle of striving for more or feeling dissatisfied with what you have, eroding contentment and genuine happiness.
  4. Limiting: Comparisons often provide a limited and incomplete view of someone else’s financial reality. People may present a facade of success while silently dealing with their own financial challenges or insecurities. Relying on external appearances can be misleading and create unrealistic expectations.
  5. Focused on Scarcity: Comparison often fosters a mindset of scarcity, where you believe there is a finite amount of resources or success available. This mindset can lead to anxiety, fear, and an unhealthy attachment to accumulating more wealth, rather than focusing on gratitude, contentment, and making choices aligned with your own values and priorities.

What Makes You Happy?

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Remember, happiness is subjective and deeply personal. It comes from within and is influenced by a range of factors beyond just financial comparisons.

Embrace your own financial journey, celebrate your achievements, and focus on creating a fulfilling and balanced life that aligns with your values and goals.

6. Learn How Money Actually Can Buy Happiness

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They were wrong. The answer to the question can money buy happens is … yes! In fact, the research is overwhelming.

And, there are actually multiple ways to spend to increase happiness. Explore 11 ways to spend money to buy happiness.

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