Using Your Money To Be Happier

Summary

Ben Felix argues that personal finance should focus on funding a good life—not maximizing income or wealth for its own sake. A good life is personal, but research points to common contributors to well-being. Money can help, especially when it addresses basic needs or improves life satisfaction, but its relationship with day-to-day happiness is limited and varies between people. Pursuing more money can also cost time, leisure, and connection.

He describes well-being using the PERMA-V model:

• Positive emotion: Enjoying pleasant experiences.
• Engagement: Becoming absorbed in a suitably challenging activity.
• Relationships: Maintaining strong, reliable connections.
• Meaning: Contributing to something larger than yourself.
• Accomplishment: Pursuing and achieving difficult goals.
• Vitality: Eating well, sleeping well, and exercising.

Practical Strategies for Financial and Life Decisions

• Choose time over money when it supports the life you want. Working fewer hours or paying to outsource tasks may be worthwhile if it gives you time for meaningful activities and relationships.
• Evaluate purchases by how they affect your time. Ask whether an expense helps you spend time in ways that fit your definition of a good life.
• Be cautious about assuming a major purchase will make you happier. People often adapt quickly to a larger home or other material upgrade. Homeownership may offer stability and control, but it can also require substantial time and maintenance. Cottages likewise come with practical demands that can affect enjoyment.
• Consider experiences as well as things. Positive experiences may support engagement, relationships, and lasting memories. Small, frequent experiences—such as a hobby, dinner with a friend, community activity, or course—may be more rewarding than assuming a large purchase will transform your life.
• Balance future security with life today. Saving for financial independence matters, but so does considering whether your work is enjoyable and contributes to engagement, meaning, or accomplishment.
• Account for hard-to-adapt-to conditions. A longer commute, especially in traffic, can create ongoing stress. A bigger home may be easier to adapt to than the commute required to reach it.
• Watch for social comparison. Trying to keep up with others can lead to spending beyond your means and weaken financial security.
• Make room for the possibility that your preferences will change. Rather than sacrificing heavily for a distant goal that may no longer suit your future self, consider how the path to that goal affects your life along the way.
• Take small decisions seriously. Daily choices around saving and health can compound, even when their immediate effects seem minor. Regrets about opportunities not taken can also linger longer than regrets about actions.
• Set goals more deliberately. Use prompts or categories such as PERMA-V, and expand an initial list of goals. This can help uncover values and priorities that a simple “What are your goals?” question may miss.

Presenter and Sources Referenced

Ben Felix; PERMA-V, a positive-psychology well-being model; studies from 2010, 2018, and 2021; a 2023 adversarial collaboration on income and happiness; research on homeownership and well-being; Dan Pink’s work on regret; a 2022 goal-setting study conducted by Ben Felix; Morningstar’s behavioral research team; and a PWL Capital master list of goals.