Four Ways to Smile More When You Think of Your Spending
The goal is to increase the personal return on investment of your spending by focusing more on your values, experiences, relationships and giving.


When you think about how much you spend every month, you probably don’t feel much happiness about it. What if you could?
The word “budget” is enough to make us get up from the computer and go do anything else. If you want an easier way to figure out how much you spend, divide two years of total expenses by 24 (most banks make the total debit number easy to find online). And, voilà, you now have a pretty good idea of what your monthly expenses are. That number is probably going to be higher than you thought — and unpleasant.
You might feel something different, though, when you go a few levels deeper to the line items. You might cry as you think about the $2,500 you spent to fix a leaking pipe. You probably can’t remember what you bought for $850 at Costco. But you smile as you remember the family trip for Thanksgiving, despite the outrageous flight prices. The purpose of this article is to help redirect your spending to create more smiles.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
I have distilled down several studies at the intersection of spending and happiness to come up with four strategies to get more return on investment (ROI) on your spending:
1. Spend in alignment with your values.
This one may sound obvious, but ask yourself: Do you know your values? There are several exercises we use with clients to help them define their core values. I think of values as life-long goals. These are mine (which are the same as our firm’s):
- Freedom (time and financial)
- Relationships
- Helping others
- Growth
You can see from that list that buying a new flat-screen is unlikely to provide much long-term happiness (for me!). However, I do get excited when I see Travelzoo’s email with its top 20 deals come through every Wednesday. I also know that if I splurge there, I’m going to get a higher happiness ROI.
2. Remember that experiences deliver more happiness than things.
Pretty much every study, including the often-cited Harvard Study of Adult Development (aka, the world's longest study of happiness), agrees on this principle. But why? Most of it boils down to the reality that the joy derived from buying things is short-lived.
The concept of adaptation and the hedonic treadmill help to explain why things bring only short-term joy. Humans tend to revert back to a relative level of happiness once the sugar high delivered by a new possession has subsided. In contrast, the joy associated with experiences lives on through three phases: anticipation, event and memories. Memories become stories.
I recently traveled to Italy with my young children. The 5-year-old got very sick on the plane, and we ended up having to throw away the dress she was wearing. With the rest of her clothes below deck, my wife’s shirt became her new dress. While this was not at all funny in the moment, I am giggling as I write this, illustrating the recurring ROI from experiences.
3. Invest in relationships.
I had two clients move from the Washington, D.C., metro area to Florida during the COVID pandemic, seeking sunshine and a lower tax bill. In doing so, they left their social circles behind. This is one of the biggest mistakes I see retirees make. Both clients moved back.
The Harvard study referenced above goes deep into the benefits of close relationships. Of course, you cannot spend to create these relationships, but you can use money as a tool to deepen them. Here are a few strategies:
- Use proximity of relationships as the driver for where you live in retirement. Moving to Florida to avoid income taxes, to Delaware to reduce property taxes or to New Hampshire to skip out on sales tax and income tax is not a good strategy in and of itself. You’re better off spending a bit more (assuming you can) to live closer to friends.
- Take that trip … with friends. Spending at the intersection of things you love to do and people you love comes with a large ROI. Often, this comes in the form of group travel.
- Give thoughtfully. We can all remember a gift that we went above and beyond for. I remember, as a kid, saving money and then taking a bus to the mall to buy my mom earrings that I had seen in a holiday catalog. I believe they cost $30. In retrospect, I’m pretty sure I got more out of giving that gift than my mom did from receiving it.
4. Replace working with giving.
I am not saying right when you stop earning a paycheck, you should start writing charitable checks, though you could do that. Giving, of both time and financial resources, usually increases happiness and overall well-being.
In a previous column, Will You Have a Happy Retirement (Even With Enough Money)?, I noted the challenges of walking away from work and losing identity, relationships and structure. Giving helps address all three of those. When we get involved in a cause in retirement, it gives us a new identity. We are now philanthropists. Others who donate their time and money to the same cause often become a new pool of people with whom we build relationships. Our ongoing commitments to said cause now give our lives some structure.
I'm not trying to persuade you to delete your Amazon account, but to think of money differently. Money, in its purest form, is just a tool — a tool that can help provide security, flexibility and, ideally, happiness.
Related Content
- Is Your Spending Out of Control? Three Ways to Fix It
- Four Reasons to Rent When You Downsize for Retirement
- Three Keys to Keeping More of Your Money in Retirement
- Five Tax Moves Retirees Should Consider Before Dec. 31
- Should I Pay Off My Mortgage When I Retire?
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification. I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.
-
How Fast Does Your Internet Really Need to Be?
From solo streamers to bustling smart homes, here’s how to match your internet speed to your lifestyle and know when it’s time to upgrade.
-
RMD, Roth, and SS: Test Your Knowledge of Retirement Tax Rules
Quiz Don't let the IRS catch you off guard. Take our quiz to reveal common retirement tax rules that could save (or cost) you thousands.
-
Treat Home Equity Like Other Investments in Your Retirement Plan: Look at Its Track Record
Homeowners who are considering using home equity in their retirement plan can analyze it like they do their other investments. Here's how.
-
Why Does It Take Insurers So Darn Long to Pay Claims? An Insurance Expert Explains
The process of verification, investigation and cost assessment after a loss is complex and goes beyond simply cutting a check.
-
Two Reasons to Consider Deferred Compensation in the Wake of the OBBB, From a Financial Planner
Deferred compensation plans let you potentially lower your current taxes and help to keep you out of a higher tax bracket. It's important to consider the risks.
-
Financial Fact vs Fiction: The Truth About Social Security Entitlement (and Reverse Mortgages' Bad Rap)
Despite the 'entitlement' moniker, Social Security and Medicare are both benefits that workers earn. And reverse mortgages can be a strategic tool for certain people. Plus, we're setting the record straight on three other myths.
-
The End of 2%? An Investment Adviser's Case for Why the Fed Should Raise Its Inflation Target
Yes, inflation can be tough on those living on fixed incomes, but protecting us from it too strictly could do our overall economy more harm than good.
-
Medicare Open Enrollment: Why You Need to Pay Extra Attention to Part D, From a Financial Adviser
The lowest premium for prescription drug coverage might not actually save you the most money. Make sure you take copays into consideration and do the math.
-
How the One Big Beautiful Bill Will Change Charitable Giving
Taxpayers who don't itemize will be able to take a bigger deduction for donations, which could boost giving. However, high-income donors could see their tax benefits reduced.
-
A 'Fast, Fair and Friendly' Fail: Farmers Irks Customers With Its Handling of a Data Breach
Farmers Insurance is facing negative attention and lawsuits because of a three-month delay in notifying 1.1 million policyholders about a data breach. Here's what you can do if you're affected.