Two Ways to Align Your Money with Your Values

December 4, 2020 – Kurt Wunderlich

As the great Biggie Smalls once said, “Mo money mo problems.” But is that true? Or do people just not use the money they earn and save correctly? How can we use money as a tool to increase the level of overall joy and contentment in our lives?

What behavioral economists and social psychologists have found in trying to answer this question may not come as much of a surprise. Income has a positive relationship with happiness, up to a point. Spending money on others can make us happier than when we spend it on ourselves. People who purchase experiences – vacations and event tickets and the like – report greater satisfaction with their lives than those who acquire stuff.

And what’s more, as researchers Elizabeth Dunn and Michael Norton discuss in their book Happy Money: The Science of Smarter Spending, this satisfaction can last a long time. From the moment you finalize the purchase of an experience, the anticipation of doing the thing or going to the event begins to build. Actually doing the thing or attending the event comes with an excitement all of its own. And then there’s the joy you get from reliving it as you share the experience with friends and family. Scroll through the photos on your phone and see which spark the most joy for you. Experiences feel memorable, unique and social, which makes them great stories. Stories allow you to enjoy something again and again.

So, instead of focusing on money simply as a thing to accumulate, think about your money in terms of what it can do for you. Truly align your finances with your values by spending money on what you care about.

Think back on your recent purchases. Are there items you started to buy because of the joy you felt, and which has now become muted or nonexistent? For me it was sport coats. I used to surf the web looking at fashion blogs trying to find my next jacket. After buying a few or seven, I realized I was not getting as much satisfaction from each purchase. I now hold myself to one or two new wardrobe pieces a year to bring back the great feeling of wearing a new jacket for the first time.

But because sports coats aren’t everybody’s thing, let’s look at two other principles from Dunn and Norton’s research that can help you put your wealth to work bringing greater happiness into your life.

Buy time

Do you have a chore you just dread doing and will put off for as long as possible? Maybe pushing a lawnmower around your yard in 98-degree heat gives you a queasy stomach. Outsourcing tasks that make you feel like this can have a major impact on your overall happiness and allow you to enjoy more of your free time. This is a double-edged sword, though, as outsourcing too much can reduce the satisfaction and sense of accomplishment you get from completing a task. Take time to think through the tasks required to achieve your financial life goals and determine which ones you are willing to take on versus outsource.

My wife and I celebrate our anniversary with a long weekend trip each year. No kids, no work, just us. We plan the trip months in advance, schedule the babysitters (thanks mom and dad!), and pay for flights and lodging. By the time we’re ready to go, whether that’s to a beach where we can relax under the sun or to strap on skis and tear up some fresh powder, everything is already paid for and we are focused on having fun, not the cost. If we wonder whether the cost of a trip is worth it, we move money equal to the price of our getaway out of our bank account and into our emergency fund. This allows us to feel what it would be like if the money were actually gone. If the pain of parting with the money is less than the anticipated joy from the experience, then it’s worth it.

Invest in others

You never regret the money you give away to help others. When looking to make a charitable gift, review three criteria: connection, impact and choice. Connection is having a reason to give to a cause. Impact is how your dollars will be put to use. While writing a check is pretty much universally appreciated, being a part of the process or seeing the change you are helping to create can improve your connection and increase the happiness you feel. Choice is the decision to make the gift. If you have children, including them in charitable giving discussions allows you to spend more time as a family and instill the value of giving.

Do your finances reflect your goals and values? Review your last few months of spending – begin with your bank account and credit card statements – and see if you think an outsider could accurately discern your values by looking at your purchase history.

This article originally appeared Nov. 9 on

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