How to change your relationship with money for good

A key problem when it comes to personal finance and saving for retirement is that people don’t necessarily associate money with happiness. Sure, they might think that when they have more money, they’ll be happier, or when they’re basking in their retirement dream scenario, they’ll be happy. But when it comes to managing money, saving and investing, happy isn’t the first word that comes to mind. It’s more of a chore.

But creating a happy, healthy relationship with money is essential. Not only are happy people healthier (that’s a money-saver right there), but having a positive mindset can make it easier to stick to good habits like saving and investing for future retirement goals. A positive mindset and distinct focus on those goals can also give people the determination willpower to break bad habits, like overspending or relying on credit cards. Researcher Shawn Achor calls this the “happiness advantage,” and says:

“Happiness is perhaps the most misunderstood driver of performance. For one, most people believe that success precedes happiness. But because success is a moving target – as soon as you hit your target, you raise it again – the happiness that results from success is fleeting. In fact, it works the other way around: People who cultivate a positive mind-set perform better in the face of challenge.”

This chain of thought is so common, especially when it comes to money: “When I stick to my budget and save $250 a month, then I’ll be happy.” Or, “When I finally pay off that last student loan, then I can start savings and investing.” Flip this thinking on its head, and focus instead on creating spending habits that maximize your happiness and bring you closer to achieving your long-term goals.

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