How To Spend Your Money To Enhance Wellbeing

When you are deciding how to spend your money in order to generate wellbeing, it is worth looking at the longer-term impact of your spending.

A study in Canada* found that certain spending can bring about happiness that disappears relatively quickly, whereas other spending – generally what they call ‘prosocial’ i.e. spending on others – brings about longer-term wellbeing.

Typical expenditure that is likely to increase wellbeing include:

  • Gifts to charity
  • Gifts to friends
  • Experiences and memories
  • Something that gets long-term use
  • A dream item.

Savings and Investments

Getting closer to your dreams can result in greater wellbeing. If you save a modest monthly amount can build up and after a few years you can find yourself closer to your objectives. This could result in you maybe being able to retire a year or two earlier which is likely to give far greater and longer-lasting wellbeing than purchasing a luxury item.

Repaying Debt

Debt is an emotional issue. In general, we humans don’t like having debt. The wellbeing from living in an unencumbered property will often be greater than the wellbeing from getting a slightly better return by investment elsewhere. It is often the case that we pay off the small debts first, even when the larger debt carries a higher interest rate. However, you should aim to reduce your debt as quickly as possible, starting with the more expensive debt.


Helping others can be a significant source of wellbeing. Whether this comes from helping a friend in need, offering some of your time to a sports club or charity, or making financial donations, we all have our own attitude to charity. Philanthropy can range from buying a sandwich for a homeless person to making a bequest in your will to setting up your own charitable trust.

Greater wellbeing comes from planned, rather than reactive giving. This is because planned giving can be a joyous feeling of helping others, whereas reactive giving is often fuelled by feelings of guilt.

Philanthropy can be food for the soul, whether it’s giving of money or the giving of time. For some individuals, this act can create a sense of having found the thing they are destined to do.

If you would like to speak to one of our financial advisers to find out how you can achieve greater financial wellbeing, please get in touch or call 01932 943028.

*Happiness Runs in a circular motion: Evidence for a positive feedback loop between Prosocial Spending and Happiness. Published online (April 24, 2011).

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