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Hearing you should cut out your ’wants’ all the time gets old pretty quick. Truth is, you don’t have to stick to buying just your ‘needs’ to get ahead.

All of us need – and want! – to buy stuff. But there’s got to be an easier, more useful way to make spending choices than simply isolating needs from wants, spending on only needs and living frugally ever after.

That’s unsustainable. It leaves us feeling yuck, deprived. And most of us can keep it up for only so long before we fall off the budgeting bandwagon.

It’s time for a happy alternative – to focus on spending that gives us the top emotional payoff – what really does it for us.

Your emotional return from spending

Shannon Lee Simmons, author of Worry-Free Money, is all about happy spending. She points out that just as we get a ‘return’ (something back) from our investing, we get an ‘emotional return’ from our spending.

‘Happy spending is simply intended to make you mindful about where you’re spending your money, and which types of expenses make you happy and which leave you feeling unfulfilled,’ she says. ‘The goal is to allow you more freedom to enjoy your money.’

The emotional return we get varies from purchase to purchase. Some things we spend on leave us on a high, but some just leave us drained. (Hint: don’t cut out the joy.)

How to rate your spend

When you’re looking to make changes to your spending plan (aka budget), take stock of what you spend money on. Not the ‘must-haves’ like power or broadband, but the more optional things you choose, like takeaways, entertainment or subscriptions.

I find it’s helpful to look at bank statements for three months (takes two seconds to download) to see where I’ve been dropping my cash lately. The same places crop up over and over.

Next, rate your purchases on a scale of 1 to 5, based on how satisfied or fulfilled it made you feel. Simmons’ scale goes something like this:  

1 – terrible
2 ­– bad
3 – indifferent
4 – pretty happy, actually
5 – utmost happiness!

So for me, for example, while Disney Plus was a 3, Spotify was a 5. Everyone’s different! You may find that takeaways on a beach or Friday drinks with friends rate highly at a 4, or spending on your dog or cat is an absolute 5.

But if we’re honest with ourselves, not everything rates as highly – like that online impulse buy or that last-minute extra item in a shopping cart.

When you’ve rated your purchases, the key is to reduce those expenses that give you a low emotional return, starting with anything that you rated as 1, 2 or 3. Make sure not to cut anything that makes you feel like a 4 or a 5. (Yay, I’m keeping Spotify.)

The thing is, when you keep your spending to what makes you happy, cutting out the unhappy spending feels really good and doable!

‘Happy spending gives you permission to keep spending money on things that make you feel proud, excited or fulfilled, because you’re reducing the expenses that don’t make you happy,’ Simmons points out.

How about in a relationship?

Time for some happy spending together, too. The happiness rating scale can be so useful when you’re coupled up and making shared money choices.

It helps to spotlight the spend that leaves you both feeling good, that you both benefit from and rate highly. That’s definitely worth keeping.

Expenses that leave you both at a 1, 2 or 3 can be cut without it feeling like either of you is losing much.

But what about purchases or goals that only one of you rates highly?

What can help is to not cut it out entirely. It may be worth keeping something that’s a 2 for you but a 5 for your partner, like their surf gear when riding the waves isn’t your passion.  

Try instead to compromise on the amount spent (can you get the same emotional hit but spend less on it?) or the timeframe (can you agree to push the spending out a bit further?). Adjusting either can keep the emotional return in sight, but make your shared spending plan work for the better.

Staying mindful with money

The trick with any spending habit is to recognise it first. Where is it coming from? Many unhappy choices get made because we’re feeling a bit down and need an emotional lift, or because we’re in the moment and lose the willpower to stay on track.

Mindfulness with money is about learning to recognise unhappy spending before it happens, and identifying how we’ll feel about the purchase before we buy.

‘By actively choosing to spend money on things that make you happy, you are more likely to stick to a financial plan… and get control over your money,’ Simmons says.

Enjoy your happy spending!

Comments (2)

Gravatar for Jacquie


10:46pm | 30 Jul 2023

It's something I need to learn. Paying yourself first. I am wanting to go the stage show "The Rocky Horror Show". I will also be putting money aside because I need new oven. I have just a boarder and he is paying $180 for his room + Broadband/power. So will be using his money fix the things I need to fix at home. Otherwise when he goes and I have been reckless with the money... and I haven't got anything replaced...

Gravatar for Caitlin


11:56pm | 10 Feb 2022

Good article Tom, but for those of us on low incomes (think minimum wage), a lot of sacrifices have to be made to reach financial goals.