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Applying the PERMA Framework for Conscious Spending

Kandice Martinez
August 11, 2023

Do you find yourself stuck in a cycle of constant saving, with the inability to truly relish the rewards of your labor? Perhaps it’s time to add a fresh element to your financial strategy – the PERMA approach.

Our society predominantly stresses on the virtues of economy and frugality, both of which are undeniably important. However, a more enriching narrative would be to use our money in ways that deepen our life experiences and stimulate authentic happiness. Indeed, the secret to financial contentment isn’t merely about curtailing expenditure but understanding how our purchases can augment our happiness, and in a roundabout way, encourage savings.

A Pivot Towards Cheerful Spending

Aristotle once professed, “Happiness is the final and perfect end of human life.” This implies that real satisfaction isn’t purely derived from toiling hard and amassing wealth. Instead, it revolves around finding joy and purpose in our tasks. By incorporating this sense of joy into our financial plans, we can develop a blueprint for saving towards things that hold true significance, all while fostering a sense of gratification.

The Doctrine of Deliberate Spending

Central to cheerful spending is a principle known as deliberate spending. It promotes the synchronization of our expenditure with our fundamental values, priorities, and activities that bring genuine joy. Rather than succumbing to impulse purchases driven by societal pressure or convenience, we need to ask ourselves, does this purchase add to my happiness and fulfillment? This mindful approach can foster a more balanced life where financial choices nourish our quest for happiness and holistic well-being.

Understanding the PERMA Principle

The PERMA principle, introduced by psychologist and academic Dr. Martin Seligman, is an acronym for Positive Emotions, Engagement, Relationships, Meaning, and Accomplishment. These components, rooted in positive psychology, can guide our spending decisions towards happier results. Here’s how PERMA can serve as a tool for financial psychology:

  • Positive Emotions: Foster joy, happiness, and gratitude in your everyday life by allocating funds for experiences or items that nurture these feelings, such as a live music event or cherished time with loved ones.
  • Engagement: Invest in activities or resources that stimulate engagement and instill a sense of purpose, like undertaking a new course or hobby.
  • Relationships: Set aside money for experiences or gifts that reinforce your bonds, such as outings with friends or family holidays.
  • Meaning: Ensure purchases align with your values and contribute to a broader cause, such as backing a local enterprise.
  • Accomplishment: Regularly earmark funds towards achieving your financial aspirations to experience a sense of achievement, whether it’s saving for a substantial purchase or investing in personal growth.

Applying the PERMA principle isn’t about unrestrained spending or jeopardizing long-term financial stability. It advocates for mindful spending that enhances holistic well-being and aligns with our core principles.

PERMA Principle at Work

To illustrate how the PERMA principle can optimize our financial choices, let’s consider the case of Peter and Chelsea. Their story demonstrates how adopting this principle can revolutionize their spending approach and, in the long run, amplify their happiness.

  • Positive Emotions: The couple decided to dedicate funds to small yet joy-bringing moments, such as walking their children to school or relishing their favorite local coffee. This shift cultivated their connection with each other and their environment.
  • Relationships: By organizing regular communal dinners and spending more time outdoors with friends, they could foster meaningful relationships without straining their finances.
  • Engagement: Chelsea began seeking out work assignments that sparked her interest, which eventually led to a raise. She also started roller skating, an inexpensive activity that reignited her passion.
  • Meaning: They took time to contemplate their roles as parents and introduced affordable family-centric activities to create cherished memories and strengthen their bonds.
  • Accomplishment: By aligning their financial goals with their intrinsic values instead of societal norms, they began feeling more accomplished. They established a retirement fund and a travel fund while simultaneously pursuing interests they were passionate about.

Embrace PERMA for Better Financial Health

You can utilize the PERMA framework as a guiding philosophy to reshape your financial habits. By weaving positive emotions, engagement, relationships, meaning, and accomplishments into our financial decisions, we can utilize our resources in ways that amplify our overall happiness, well-being, and goal attainment.

Ultimately, the PERMA approach doesn’t undermine the importance of savings. Instead, it prompts us to transition from merely saving money to deliberate spending, fostering a fulfilling life deeply rooted in joy and contentment.