This guest blog was written by Chris Budd, who wrote the original Financial Wellbeing Book as well as The Four Cornerstones of Financial Wellbeing. He founded the Institute for Financial Wellbeing and has written more than 130 episodes of the Financial Wellbeing Podcast.
Being happy over a period of time takes work.
Doing something that makes one feel happy is easy, we all know what we enjoy. Some of those things cost money, many do not.
Finding happiness over a longer period of time – we might call this wellbeing – is more than a combination of happy moments. It requires a different approach. Money has a much more significant part to play in achieving this.
A financial plan should help the owner(s) to improve their wellbeing, not just their wealth. Understanding these different types of happiness can make a big difference to that financial plan.#
Let’s look at some of these types of happiness, and consider how they might be impacted by a financial plan.
Hedonistic pleasure means living a life moving from one joyful moment to another. Eating a delicious meal. Playing or listening to music. Laughing at a joke. Being with a loved one.
These are things that make us happy in the moment. Once that feeling has gone, however, we tend to revert back to our long-term level of wellbeing1 until the next thing happens which gives us that joy in the moment.
Achieving something purposeful creates pride and memories, both of which are much longer lasting. This could be something personal, such as being creative. It could be something that gives a feeling of being part of a community, such as helping at a charity or coaching youth sports teams.
Having something in our lives which is purposeful gives meaning. Eating a delicious meal may make us happy at the moment, but having the skills to be able to create a delicious meal also gives longer-term wellbeing.
A fulfilled life is surely one which includes both happiness and wellbeing. Money has an important part to play in helping achieve both of these. It can also, however, get in the way.
Sometimes, when we feel a bit down, we might buy something to give us a short hit of happiness. There is even a name for this: retail therapy.
This type of happiness is usually short-lived. Indeed, if the money used to buy the thing creates debt or makes the achievement of a longer-term goal less likely it can actually reduce our wellbeing.
Having control of our daily finances is one of the five pillars of financial wellbeing2. This means spending in a way to maximise short-term happiness, without compromising long-term wellbeing.
Money can have a positive effect on wellbeing if it enables one to achieve life objectives which make us happy.
An example of this could be achieving some financial security. This might allow someone to change jobs to one which pays less, but which might provide a greater sense of purpose.
A financial plan with such an objective for the future will provide real meaning to how one saves and spends now.
A financial plan which helps somebody to buy an expensive car or jewellery, the purpose of which is simply to show that one can afford them, is unlikely to create long-term wellbeing. This is especially true if achieving this plan requires sacrifices and long hours at work.
The best financial plans, therefore, help the owner(s) to be both happier and to achieve wellbeing. They will:
A financial plan (or the lack of a financial plan) may result in high spending now but a failure to achieve long-term objectives. This might bring happiness now, but not achieve wellbeing in the future.
A plan that results in achieving financial security but involves little spending on ourselves now means living a life with the promise of wellbeing in the future but much lower happiness now.
As with most things in life, spending time on your financial plan considering the balance of happiness and wellbeing could help you to get the best out of your money.
Please note: This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Approved by Best Practice IFA Group Limited on 08/09/2026.
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