It’s OK to buy coffee

In the world of money management, spending on the things you need and building your savings can be the path to a financially confident life. But finding ways to treat yourself can also be a boost to your financial confidence and happiness.

We’ll break down the research that explains why spending money to save time or on meaningful experiences may be an important part of creating a budget that prioritizes the things you care most about.

The highlights:

• Several studies show that people who spend money to buy time and experiences instead of things often report greater feelings of overall well-being.^{Disclosure 1, Disclosure 2, Disclosure 4, Disclosure 5}
• Creating a values-based budget means balancing your savings for long-term goals with spending on the experiences that bring you joy.
• “Buying time” and budgeting for experiences may help you spend with intention and avoid impulse purchases.

Spending money to save you time

Wouldn’t you love to have more time for enjoyable activities, like seeing friends or focusing on your hobbies, rather than doing chores?

Participants in one study were given $40 one weekend to spend on a time-saving service, such as lawn care, grocery delivery, or house cleaning. The next weekend, they were given the same amount to spend on a physical item, such as a shirt or a pair of shoes. Participants across income levels reported more positive emotion—that is, being in a better mood and feeling less stressed—when they spent money on things that saved them time rather than on material items.^{Disclosure 1}

Further research supports the connection between happiness and valuing your time, and it suggests that “buying time” can have an impact on your well-being by allowing you to focus more on things you care about.^{Disclosure 2} If it fits within your budget and won’t keep you from achieving your long-term financial goals, occasionally spending on time-saving conveniences could be seen as an investment in yourself.

Some examples of time-saving purchases include:

• Paying for grocery delivery so you can skip the trip to the store and have time to cook with your family.
• Hiring a tax professional so you can stress less during tax season.
• Using a taxi or ride-hailing service to spend more time having fun at a special event—and less time looking for parking.

Spending on experiences over things

There’s a common trope that some millennials and Gen Zers are broke because they spend all their money on expensive lattes or avocado toast ^{Disclosure 3} Sometimes, financial advice can feel very black and white. Investing and saving? Good. Making a purchase without any obvious long-term benefits? Bad.

The reality is more complicated. Some studies have found that material purchases don’t necessarily improve your well-being.^{Disclosure 4} However, research shows that spending money on experiences—even a simple trip to your favorite coffee shop—can be closely tied to people reporting greater feelings of happiness, and that counts for a lot.^{Disclosure 5}

But spending on experiences doesn’t mean emptying your savings or leaning on credit cards to cover a luxury trip to Bali. Consider the latte. Maybe you bought it to catch up with an old friend, to savor the flavor and warmth it gives you on a cold day, or as a way to connect with neighbors at your local coffee shop. The experience of getting that latte is simple, and yet it can have a significant impact on your happiness.

What experiences do you enjoy the most? As you develop a spending strategy that supports your financial goals, you can also budget for experiences you’ll value—while avoiding impulse purchases that you may later regret. For example:

• If you want to spend more time outdoors, set aside enough money to gas up your car for weekend day trips to state parks or great hiking spots.
• Love live music? Take a look at your favorite bands’ tour dates and some local venues’ calendars so you can start building a concert budget for the months ahead.
• Foodies may want to schedule their restaurant visits a few weeks in advance. That way, you can account for dining expenses in your budget—and you can have more time to invite a loved one to join you!

In an episode of the “Money and Mindset With Bright and Brian” podcast, Brian Ford, head of financial wellness for Truist, says values-based budgeting can help you save for retirement and other long-term goals—and help you responsibly spend on experiences that bring you joy.

“The basics of values-based budgeting are that, first, we need to figure out what’s most important in our lives—what really matters to you,” he says. “And then we need to save and spend according to those values.”

Budget for your happiness

Create a budget based on your values. Track your spending and allow room in your budget for purchases that matter to you, even if they may seem frivolous to some.

When you manage your money with intention—working to build your credit and paying off debts, investing for retirement, and saving for emergencies—you can treat yourself to purchases that make you happy. An occasional small purchase that brings you joy shouldn’t derail your financial goals.

Next step suggestions:

• Check your monthly bank statement and consider how you feel about each non-essential purchase you made. As you budget for the next month, set aside some money to spend on the experiences you know make you happy—and avoid repeating those purchases that didn’t bring you joy.
• Listen to this episode of the “Money and Mindset With Bright and Brian” podcast that discusses the question “Can money actually buy you happiness?” (The answer may surprise you!)
• Download our super budget worksheet to help structure your spending.