Can a Budget Make You Happier?

Clever websites and smartphone apps have made creating a household budget easier, though it's still an unappealing chore for some. But what if using a tool that makes you smarter about money could also make you happier? That would make budgeting a lot more attractive.

What's the connection? Budgeting causes you to rethink spending decisions, and by cutting back on some expenses that are less meaningful to you, you'll have money to put toward things that give you pleasure.

Most budgets start with a list of monthly expenses. Some are necessities, like rent or a mortgage, food, utility bills and insurance. At first glance you might think other expenses, like entertainment and clothing, are more easily chopped. But put every item on the list through a happiness prism.

Would you be happier if living in a smaller home meant you had extra money for travel or other experiences? On the other hand, even if public transportation makes owning a car a luxury where you live, if the car brings you happiness, it's worth having it as a line item in your budget.

Look for painless ways to save cash, and put that money into a happiness fund. You might switch to a cash-back credit card or join a friends-and-family account for cable or streaming services. Also investigate savings opportunities at work, like a health savings account for medical expenses and retirement account matching funds that could double your contributions.

Budget creatively. Buying a fancy coffee maker might seem to have a high upfront financial outlay, but it could pay for itself in a month if it cuts down on the amount you spend on daily trips to your favorite coffee shop. That's money you might rather give to charity if your happiness comes from helping others.

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