Could Financial Wellbeing combat the cost of living crisis?

Sep 6, 2022 | Mental Health

For this month’s update – I wanted to hand my platform over to a good friend & Financial Wellbeing specialist – Chris Budd – as I feel that he could bring you the most value this month.

Chris Budd wrote The Financial Wellbeing Book back in 2015, since when he has also been producing the Financial Wellbeing Podcast. He is founder and remains Chair of financial planning company Ovation Finance Ltd. For many, life is tough, and getting tougher. The well documented cost of living crisis has caused many people to face some very difficult decisions about how they spend their money.

If you don’t already, you might spend some time trying to understand where your money goes. I know it’s a job we all hate, but bear with me, because this might lead you to some interesting conclusions.

Take a look at where you have been spending over the last, say, six months. Break down your spending into these categories: essential (including food and interest on debt); nice to have; luxury; the future (savings and pensions plus repayment of debt).

Once you have this breakdown completed and in front of you, you will want to come back to this article.

There are some principles about financial wellbeing – the relationship between money and happiness – that you might like to apply to the results of that review.

Financial Wellbeing Junkies

This is an expression which relates to buying stuff to alleviate your mood. You are feeling a bit low, so let’s go online or pop into town and get ourselves some retail therapy.

We arrive in adulthood with a set point of wellbeing (interestingly, at least half of this set point we are born with!). We then oscillate around that set point as we go through life. A good thing happens, and we are at, or maybe even above, our set point. In time (and usually a fairly short amounts of time), we settle back to that set point.

Sometimes, however, stuff gets us down, and the reaction can be to buy something that will make us feel better.

Retail therapy.

The trouble is, such purchases only bring very shortly bursts of financial wellbeing. When that hit of wellbeing dies away we are left with more debt, that can make us more unhappy – which leads to us to spend more money get more hits of wellbeing.

Constantly chasing hits of wellbeing through retail therapy can turn us into financial wellbeing junkies.

Wellbeing From Experiences

Far better to seek wellbeing from experiences. These produce memories, which is a much longer lasting source of wellbeing.

Experiences are a better way of spending your money, but even better would be to get memories without spending money at all. Exercise, maybe a nice walk or a run, is free, and is proven to release endorphins and other chemicals which make you happy.

Social Wellbeing

A long lasting study by Harvard University asked young people what they thought would bring them happiness during their lives. The response was consistent: money and fame.

The study returned to these people as they went through their lives to check what was actually bringing them wellbeing. They’ve been talking to them for around eighty years!

The overwhelming response to what brought wellbeing throughout their lives was not money, nor fame: it was the quality of their social relationships. Check out the Harvard Study On Happiness on YouTube (22m people already have!).

The Source Of Joy

If we seek our wellbeing from buying stuff, or from approval of others (fame), or similar external sources, then we are forever chasing happiness.

If only there was a source of happiness that was endless; that didn’t rely on other people, and didn’t require money! If only we could break the link between our self-worth and our net worth.

If you gain self-worth from internal sources, then you are in control. If you are feeling low, you can simply turn on the self worth tap, feel better.

What is this magic source of joy, of internal self worth?


The joy of giving, of helping others, is a major source of self worth and therefore of wellbeing.

Start Again

Happiness, wellbeing, joy; all these come from spending time with others, creating experiences and memories; helping others; and free stuff such as sunshine on the skin, healthy eating and exercise.

Now go and undertake that review of your spending. Are you spending your money on stuff that brings you wellbeing? It might be possible for you to change your spending habits and achieve a greater wellbeing even within a new, limited budget.